child care business plan australia

How to Build a Childcare Business Plan

A step-by-step guide for childcare with tips and a detailed outline to help entrepreneurs start their childcare business.

Table of contents

• What Is Childcare and Why Should I Start One
• Types of Childcare Providers
• Essential Steps Before Starting Your Childcare Business
• Develop Your Buyer Personas
• Decision Journey Map Definitions
• Determine Your Competitors  
• How to Start Your Childcare Business
• Conduct an Opportunity Analysis

Problem and Solution

• Execution Plan

Strategic Alliances

• Financial Forecasts
• Consider Various Funding Sources

Form Your Childcare Business

• How to Gain Enrolment at Your Childcare
• Find the Right Childcare CRM Software to Manage Enrolment with Less Work

Check Out the Tips and Tricks

Changing parent expectations have created an environment where the old way of managing the parent experience from initial enquiry through family retention doesn’t work anymore. It’s inconvenient, time-consuming, and full of obstacles that cause families to choose another childcare centre altogether.

Childcare organisations that make the parent experience digital and convenient will grow enrolment, increase retention, and remain competitive in the childcare market. In this guide, you'll view the key takeaways from our research and provided recommendations to help you grow your business by optimising the parent experience .

What is childcare and why should I start one?

According to Forbes , childcare businesses were projected to have some of the fastest employment growth of all industries through 2020. Starting a childcare is a great opportunity for aspiring business owners who have a passion for early childhood education and child development.  

‘Childcare’ is an umbrella term for various options (such as Montessori, preschool, and many more) where parents and guardians drop their children off and leave them in your care to...  

• Socialise with other children in their age group  
• Learn basic fundamentals for future academic success  
• Reach important developmental milestones

Is starting a childcare business worth it?

Starting a childcare business or franchise is profitable, emotionally rewarding, and sustainable – the need for committed childcare entrepreneurs has never been greater.  

As of 2021, there were 13,370 childcare centres in Australia. The growing popularity of childcare centres comes from the demand. Parents will always need a form of care for their kids. Plus, there’s a necessity, especially beyond COVID-19, to socialise children in an environment that fosters development.  

Types of Childcare Providers 

• Family Daycare  
• Relative care  
• Preschool (only)
• Independently-owned daycare
• Childcare Groups  
• Before & After School/Vacation Care

The difference between individual centres and childcare groups.

An independently-owned daycare often has an individual owner, a centre director, and possibly a few other administrative staff members – along with teachers, cooks, bus drivers, etc. The owner is typically an individual who puts their own money and savings into opening the centre, so all business rights (name, branding, etc.) belong to them.  

Alternatively, a childcare group falls under a corporate brand who has acquired centres in multiple locations and either re-branding or keeping the current brand (to grow their portfolio). This type of business is usually controlled by a group of employees in a head office or headquarters facility. 

The centre directors, cooks, educators and teachers are then recruited by the childcare group itself and distributed to different locations to maintain similar or exactly the same policies, values and learning program. Ultimately each location is owned and operated by the larger corporate group.

Essential steps before starting your childcare business

1) conduct market research.

When it comes to starting your childcare centre, relying on assumptions about your customers and competitors leads to wasted time, money, and effort. In contrast, businesses that conduct regular market research improve customer retention and are 76% more likely to see an increase in revenue.  

Market research is a data collection process that evaluates both consumer behaviour, competitor habits, and industry trends to determine the viability of your centre and build a foundation for future business operations.  

Prepare for success upfront by conducting thorough market research to understand your competition, improve communication with your target audience, and identify new market opportunities. This research should result in actual data that you can use to drive your business and marketing strategies as you launch your centre.  

There are a variety of tools available to help you conduct market research - all from the comfort of your own office. Gone are the days of hiring team members with clipboards to approach consumers face-to-face. Survey Monkey, Typeform, Google Forms all offer digital market research tools to help guide you through the process of understanding your audience, your competitors, and your industry.  

 2) Determine Your Target Market

A market segment is a group of consumers that could potentially enrol at your childcare centre. First, identify your market segments and determine how big each segment is.  

Be careful not to fall into the trap of defining your market as “everyone in your community.” This often leads to a ‘spray and pray’ approach to your marketing and as we know, a message for everyone really speaks to no one. When you generalise your advertising in favour of not isolating a potential consumer, you aren’t able to effectively communicate with your ideal customers – forgetting to recognise how your family entertainment centre can appeal to them and their needs.  

A classic example is a shoe manufacturer. While it would be tempting for a shoe company to say that their target market is anyone who has feet, realistically they need to target a specific segment of the market in order to be successful. If they sell adult athletic shoes, they should be building their message to target athletes or individuals who enjoy staying active and exercising. Likewise, if you offer programs for children aged 6 months to 4 years old, you should prioritise advertising towards young adults in their 20’s and 30’s.  

A common strategy when identifying target markets is to use the TAM, SAM, and SOM approach to look at market sizes from a top-down approach as well as a bottom-up approach.  

Target Market Terms

• TAM: Your Total Available or Addressable Market  

This should include everyone you wish to reach.  

Example: Your entire local community.  

• SAM: Your Segmented Addressable Market or Served Available Market  

This is a portion of the TAM you will specifically target because they align with your offerings.  

Example: Families with young children.  

• SOM: Your Share of the Market  

This is the group of your SAM that you will realistically reach—particularly in the first few years of your centre’s opening, as you may expand and grow your service over time.  

Example: Families with young children who make at least $65,000 each year in household income.  

For childcare organisations with multiple brands, schools, or programs - increasing revenue and keeping families happy is vital for growth. Your Millennial parents need a uniform, high-quality experience, regardless of location.

Standardising business processes has a significant impact on time savings, costs, and most notably on quality. In fact, standardisation improves quality by   61.9%,  on average. Create consistent  enrolment processes across all your locations to ensure every family has a great experience and a positive association with your brand – leading to higher conversion success and profitability.  

To achieve consistency, your marketing approach and advertising material must follow all your corporate brand guidelines. Your organisation should have a lead management system that supports your childcare staff as they  guide families through   the decision-making journey  while also ensuring each location is delivering a consistent parent experience.  

3) Develop Your Buyer Personas

Before you begin writing your marketing plan, make sure you’ve defined your market and buyer personas. Without a deep understanding of who you’re speaking to, a marketing plan will have little value.    

Audience personas allow you to dive even deeper into your target market and help you understand more than just who your customer is. These identities inform you how to communicate with your customers in a way that relates to their pain points and needs.  

When you understand your customer’s motivations, you can uniquely address their concerns and questions in your marketing materials - leading to increased tours, enrolments, and revenue.  

Start by listing out the various kinds of programs and classes you’d like to offer at your centre.  

Then, determine who the primary decision-maker and who the primary influencers might be in each scenario.   

Primary decision-maker : typically the individual(s) taking financial responsibility and remitting payment at your centre.  

Primary influencer : also crucial in the purchasing process as they often have the ability to sway decision-makers.  

For example, imagine you’re promoting availability for Holiday program at your centre. In this instance, the primary decision-maker might be the parent(s) or guardian(s) whereas the primary influencer would likely be the child who’s deciding what kind of activities they want to do this Summer.  

Audience Overview

List the audiences, personas, or segments that you want your centre’s marketing and messaging efforts to reach.  

Select one audience from above and describe it to the best of your knowledge. Go beyond the traditional persona to consider motivations & behaviour.  

Identify the key stages in your audience’s enrolment journey from beginning to end, knowing there may be multi-dimensional steps within a stage. Complete the table for each journey at the individual stages from the specific audience’s point of view.  

Decision Journey Map Definitions 

Stage : This refers to each stage of the enrolment journey - awareness, consideration, action, and advocacy.  

Awareness : This is when a family is first learning of your centre and your brand. They are researching multiple childcare centres and eventually send an inquiry to tour your facility or learn more.  

Consideration : During this stage, a family is touring your centre and may be deciding between you and 1-2 other providers. Tip: Proactively equip your staff with key talking points so they can highlight your unique centre features.  

Action : This is when a parent decides to enrol their child for care, pay fees, and is either placed on your waitlist or already enrolled.  

Advocacy : After a successful, happy experience, this parent or guardian has become an advocate for your business. They’re telling friends and family about your centre. This is vital for your word-of-mouth marketing strategy.  

Emotion : Identify what the persona is feeling at each stage of the customer’s journey. They may be anxious, curious, excited, or satisfied at various points. Put yourself in their shoes.  

Key Actions : What actions would a consumer take at each stage? For example, during the awareness stage, they may see your ad on Facebook, look you up on Google, or visit your website. In a consideration stage, they may call your centre to get more information, look at your services online, or read reviews.  

Questions : What questions is the consumer asking in each stage? These are the questions you need to be answering for them in your advertising and marketing efforts.  

Determine your competitors.

Competitive research helps you understand why customers choose your centre over other alternative care options. This information provides you with insight about how your competition is marketing their services and over time, this can help you improve your own marketing campaigns and business offerings.  

Look up similar childcare centres in your area, see what programs they offer, the type of facilities, their capacity, and curriculum. Then, highlight the features that make your centre stand out. Showcase your selling points in all marketing and advertising efforts.  Get started with these key questions...

Who are my direct competitors and what services do they offer?

For example, other childcare centres, family daycare or school pre-schools.

Who are my indirect competitors?

For example, other childcare offerings that may lure potential families away such as relative care and babysitters, at home programs, etc.

What does my competitions pricing look like?

Do they offer promotional pricing or cheaper daily rates, what do they do best, what areas do they lack in, how to start your childcare business., construct a business plan.

A good business plan will guide you through each stage of starting and managing your childcare organisation- including how to structure, run, and grow your new business.  

There’s no correct or incorrect way to write your business plan. What’s most important is that you identify your business objectives and use this document as a roadmap for how to achieve these goals.  

A strong business plan can help you recruit business investors, gain funding, or find new partners. Prospective investors want to feel confident they’ll see a return on their investment and your centre’s business plan is the perfect tool to assure potentials that working with you — or investing in your business— is a smart and profitable decision.  

Write an Executive Summary

Although this section is the first thing people will read, it’s advised that you write it last, once you know the details of your business inside and out. At this stage, you will be able to articulate your business more clearly and summarise all the information in a succinct, concise manner.  

Ideally, your executive summary will be able to act as a stand-alone document that covers the key highlights of your detailed business plan. In fact, it’s common for investors or loan providers to ask for just the executive summary when they start evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation, and more in-depth financials.  

As your executive summary is such a critical component of your business plan, you’ll want to make sure that it’s as clear and concise as possible. Cover only the essential components of your daycare, ensuring your executive summary is one to two pages maximum. This section is intended to be a quick read that hooks your potential investors’ interest and excites them to learn more.  

The executive summary is a tell-all first paragraph that details...  

• The city and state of your centre (you can decide on the exact location later)  
• A potential open date  
• A projected enrolment count (number of children you can enrol)  
• Programs you plan to offer  
• Ages you hope to serve  
• A quick financial summary (based on grants, funding, and potential revenue from projected enrolments)  

This may seem like a lot of information upfront, but it’s simply a high-level overview of your plan.   

Conduct an Opportunity Analysis 

The opportunity section of your business plan includes information about:  

• The problem that you’re solving within your community  
• Your programs and classrooms  
• Who you plan to market your centre(s) to  
• hHw your daycare facility fits into the existing competitive landscape  

This portion of your business plan is also important for outlining what distinguishes your childcare centre from your direct and indirect competitors as well as how you may continue to expand and grow your centre in the future.  

Use your previous competitive research to determine your daycare business’s competitive advantage and position. Analyse potential strengths, weaknesses, opportunities, and threats. 

Describe the problem that you are solving for your customers. Childcare centres are need-oriented, meaning your consumers have tangible pain points that you must resolve to be successful.  

So, what is the primary pain point for them? Maybe it’s that busy, working parents need a caring, safe place for their child during the day, or perhaps families are seeking after-school care options for their elementary-aged children, or maybe parents need 24-hour childcare options when they’re traveling or working odd hours.   

Now, assess how they are solving their problems currently and where there’s room for improvement. If there's only one childcare centre in your community and it has no open seats, you could be the solution. Or maybe there are lots of existing care providers in your city but they’re expensive or have rigid pickup and drop-off times that working parents have trouble meeting. Or perhaps there aren’t any existing childcare businesses within a reasonable driving distance of where you’d like to place yours.  

Defining the problem you are solving for your customers is by far the most critical element of your business plan and is crucial for your daycare business’ success. If you can’t pinpoint a problem that your potential customers have, then you might not have a viable business concept.  

To ensure that you are solving a real problem, try conducting your own survey with potential customers to get a better understanding of their needs and validate that they have the problem you assume they have. Then, take the next step and pitch your potential solution to their problem.

Do they agree that it’s a good fit or does it seem to fall flat?  See how to come up with a strategic plan for your business.

Write an Execution Plan

The importance of an execution plan.

The execution chapter outlines how you’re actually going to make your childcare centre work . You’l l address your marketing and enrolment plans, operations, success metrics, and any key milestones that you expect to achieve.  

Execution Plan: Marketing and Sales  

The marketing and sales plan section of your business plan details how you propose to reach your target market segments, how you plan on converting those target markets, what your pricing model looks like, and what partnerships you may need to make your centre a success.  

Your Positioning Statement

Once you understand your audience, the first part of your marketing and sales plan is your positioning statement. Refer back to your value proposition to create a simple, straightforward sentiment, explaining where your company sits within the competitive landscape and what differentiates your venue from the alternatives that a customer might consider. This statement should be written for an investor or loan provider, rather than for your customer.  

For example, a positioning statement for a 24-hour childcare centre in Sydney, New South Wales may look like this:  

“For the Sydney-based family who is seeking childcare around the clock, Jenny’s 24-Hour Childcare Centre is a safe option for young children with nutritional meals, best-in-industry sleeping arrangements, a clean outdoor play area, and highly trained care teachers and educators. Jenny’s 24-Hour Childcare Centre is the first centre of its kind within 10 km of the Sydney city centre and offers competitive pricing and competitive daily rates.”  

Use this formula to develop a positioning statement for your centre:  

Your Mission Statement

Your mission statement is a scaled-down version of your positioning statement. This should be just one-two sentences that are geared toward your target consumer and describe what your business plans to accomplish. This statement usually includes company core values that explain your childcare’s purpose and how you serve your audience.  

For example, Busy Bees is a leading early childhood education provider with the mission of “ high quality childcare and exciting learning opportunities that give every child the best start in life .”  

Pricing 

Your positioning strategy will typically determine how you price your memberships and packages. There are some basic rules that you should follow when deciding on your price point:  

Cost-plus pricing: For the most part, you should be charging your customers more than it costs you to host them at your centre to ensure your venue is profitable and is appealing to investors.  

Market-based pricing: Look at what your competitors are charging and then price based on what your audience is expecting.  

As part of your marketing plan, you may wish to collaborate with other organisations such as local camps, after-school programs, pediatricians, or even other childcare centres that don’t offer the same activities that you do.  

This partnership should benefit both of you – it may help provide access to a target market segment for your venue while allowing your partner to offer a helpful recommendation to their customers. If you’ve already established an alliance, it’s important to detail that in your business plan.  

The operations section is all about how your business works. This portion details the essential logistics such as staffing and sourcing and fulfilment. But remember, your goal is to keep your business plan as short as possible, so too much detail here could easily make your plan much too long.  

Milestones and Metrics

It’s critical that you take the time to look forward and schedule the next critical steps for your business. Investors will want to see that you understand what needs to happen to make your plans a reality and that you are working on a realistic schedule.

Then, determine how you will measure the success of each milestone by listing out the key performance indicators and metrics needed to see progress. These will be the numbers you monitor on a regular basis to evaluate the trajectory of your business. For example, you may look at how many families tour your centre each week, how many children you enrol each month, or the amount of revenue you bring in per quarter.  

Company and Management Summary

The structure of your staff and teams sets your daycare up for success. In a new childcare centre, there’s typically an owner, a centre director, staff members, an enrolment or marketing team, accounting/administration, teachers, assistants, cooks, bus drivers, and janitorial staff. For example, the average small daycare business has 8-10 fully licensed and/or certified early education teachers.  

Financial Forecasts  

A typical financial plan will have monthly sales and revenue forecasts for the first 12 months, and then annual projections for the remaining three to five years. Break your sales forecast down into several rows, focusing on just high-level buckets at this point.   

Knowing how much your childcare will cost to open ahead of time can save you money, stress, and time. Childcare start-up expenses vary by size, enrolment capacity, and miscellaneous needs.  

Keep in mind that you can save on staffing costs and cut down on overhead with technology that helps to streamline your centre’s operations. After all, 40% of Millennials prefer self-service over human contact when interacting with businesses.   

It’s essential that you find ways to enable families to book tours and enrol online without ever having to make a phone call to the centre- reducing time spent on necessary-but-manual tasks for both your staff and inquiring families.  

Finally, articulate your profits and losses based on the data from your sales forecast and your personnel plan plus a list of all your other ongoing expenses associated with running your childcare centre.  

Step 1 : Average daily rate per child x your expected enrolments x 12 (annual revenue – assuming each family is still enrolled during the holiday periods).  

Step 2 : Childcare businesses make around 16% profit from their overall revenue, after Childcare expenses. Multiply your number from step 1 by .16 to get your predicted profit.  

Example : Let’s say you plan to charge families an average of $110 per day for childcare. With that, your goal is to enrol 60 students by the time your childcare centre opens. Multiply ($110 x5) 60 x 12 (annual revenue). This should come out to $396,000. Lastly, multiply your revenue of $396,000 by .16, which equals a net profit of $63,360 per year.  

Consider various funding sources.

Depending on your situation, there’s both loan and grant funding in childcare. Between state tax credits, loans, and grants – there are financing options for a variety of situations.  

Collect childcare grants for your business.

Often, startup costs for opening a childcare are high. Certain states and councils offer grants for new childcare businesses. There are several grant options, depending on your child and family details.  

For example, companies and associations such as Australian Grants or Early Childhood Association Australia can help you with more information or support towards applying for these grants and funding.

All legitimate businesses, including childcare will need to apply for an ABN (Australian Business Number) that identifies your business to the government and the community. 

Find the Right Vendors

Choosing the right suppliers for your business is essential. If your vendors aren’t reliable or don’t deliver quality products, your new centre will struggle to attract families. As a childcare provider, you will likely need the following vendors at one point or another:  

Electrician 

Plumber 

Food and Beverage Supplier 

Educational Materials Supplier 

Substitute Staffing Provider 

Accountant 

Cleaning & Maintenance 

Childcare Management System (CMS) 

Customer Relationship Management (CRM) Software 

Digital Payments Provider 

Online Forms Software 

Research Your Vendors

Check their most current reviews and current list of clients.

Review Your Options

Don't settle for the first vendor you see, research and receive quotes from at least 3 vendors.

How to gain enrolment at your childcare.

The next step after successfully starting your daycare business is to grow your centre and gain enrolments.  

Begin by building a string company culture, actively marketing your childcare centre, and finding the right childcare technology to optimise your enrolment process and save time.  

Create a culture where staff want to work.

A childcare centre that stands out from the rest has happy staff members that want to work hard. Create a diverse employee culture that feels comfortable openly talking about situations. Provide support, patience, and room for growth.  

Market your centre.

A childcare marketing strategy starts with an achievable goal. Do you want to fill your enrolment spots? Do you want to build a waitlist? Should you focus on scheduling more tours?  

Choose an objective and measurable results – so you can track and analyse your marketing performance.  

Market, promote, and advertise your childcare centre with...  

Social media (especially Facebook – 83% of Millennials have a Facebook account).  

Landing pages and contact forms on your website  

Listing directories  

Email and text marketing campaigns  

Referrals  

Digital advertisements  

Flyers  

Word of mouth marketing  

Tip: Childcare software that automates the reports you need helps you to saves time and improve your return on investment (ROI).  

For example, with a Source of Families report, you can see where your leads are coming from. It helps you enhance your marketing efforts and refine your spending. Invest in the channels that are popular and spend less on the ones that aren’t working to generate more high-quality leads.  

Find the right childcare CRM software to manage enrolment with less work.

ChildcareCRM is revolutionary childcare software that automates lead capture, follow-up, scheduling tours, and reports. With digital enrolment forms  – you and your staff will save hours of time. Plus, craft beautiful, personalised marketing campaigns to continually grow your business.  

Further, marketing is the growth engine for every new childcare centre. But missed leads, slow response times, a complex parent experience, and lack of reporting make marketing difficult. Busy and overworked staff often don’t have time to complete every manual-but-necessary marketing activity, so opportunities are lost.   

Get more from your marketing while saving educators and centre directors 10 hours every week with ChildcareCRM. Automate everything from lead capture to reporting—all from one place.

For Current Users

Visit our website to learn more.

For Interested Users

Schedule a demo to take the next step and effortlessly increase occupancy and gain enrolments from the get-go.  

Get started With LineLeader.

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How to Start a Childcare Business

• Written by  Lorina
• January 12, 2015

How many times while working in childcare, you may have thought of opening up your own childcare centre? Being a boss, implementing your own ideas and suggestions, running things how you see fit. It’s a great opportunity to make a difference within the community and to offer your own experiences and knowledge. It may sound like a good idea but the reality of it, it’s a hard task! There are a lot of regulations, government policies and requirements that needs to be followed. However if you are willing to put the hard work in then it can be very rewarding! This article will provide you with information on what you need to do in order to start your own childcare business.

When starting a childcare business it’s best to have some experience with working in different early childhood settings and be qualified to own a childcare centre. Having a degree isn’t essential to own a childcare centre however a Diploma qualification would enable you to understand the ins and outs of responsibilities within a centre. Along with a qualification you will also require:

• a Police/Criminal check
• Current First Aid Certificate
• Current Working With Children’s Check
• Current Anaphylaxis training

Being a qualified owner is beneficial as you will be aware of what is required and meet the needs of the educators and families. It also provides trust in staff knowing you are qualified to own a centre. There is nothing worse than working for an owner who has no idea on childcare itself. So, it’s best to spend a couple of years getting qualified and gaining experience… After all this is your business and a lot depends on the choices you make.

Types of Early Childhood Services

When starting a childcare business there are many different types of childcare services you can offer within the community. Before deciding on which service you would like to start it’s best to do some research in the locality you’re planning to run your service. Find out the community needs and see what type of service would suit the needs of the community best. For example: in the locality if there are 3 long day care centres offering care for 0 – 5 year olds, it may be beneficial to start up a preschool service which focuses primarily on school readiness.

Childcare services include some of the following:

• Long Day Care – Long day care (LDC) is a centre-based form of childcare service. LDC services provide quality all-day or part-time care for children of working families and the general community.
• Family Day Care – Family day care (FDC) services support and administer networks of FDC carers who provide flexible care and developmental activities in their own homes for other people’s children.
• Preschool – Pre-schools are also referred to as kindergartens in some States. They essentially provide services to children in the year prior to attending primary school and involve structured, seasonal programs for two or three days a week.
• Occasional Care – Occasional care (OCC) is a centre-based form of child care. OCC services provide flexible care which allows parents to meet their work related and non-work related commitments
• OOSH - Outside school hours care (OSHC) services provide care before and/or after school and/or care during school vacation time.

If you want to start up a service that will be part of the competition in the locality, find a “niche” idea that you can advertise and sell your centre on in order to gain popularity and enrolments. Think of an idea that the other centres are not offering. Some ideas include: being an organic centre, offer after hour care, only target a specific age group (e.g. nursery care only), offer play groups with parents etc. Snoop out the competition and see what unique idea you can come up with!

Provider Approval & Service Approval

Provider Approval - Before operating an early childhood service you will need to obtain a “provider approval”. This is an application process conducted by the Regulatory Authority. This process will examine whether you are a fit and proper person to be involved in the provision of an early childhood service. This is national recognized. To be deemed as a fit and proper person assessed on your history of compliance with current education and care service law, criminal history check and whether you have had any bankruptcy issues. Once submitted you will receive a result in 60 days.

For more information on Provider Approvals: http://www.acecqa.gov.au/provider-approvals

Service Approvals – If you application is successful as an approved provider you may apply to the Regulatory Authority for service approval. Service approval is needed if you will be the operator of the service and will be responsible for the management of the service. This applications requires details on the type of service you will be managing, insurance, permits, policies and procedures etc.

For more information on Service Approvals: http://www.acecqa.gov.au/service-approvals

Before obtaining any approval it’s best to contact your state or territory Regulatory Authority for further information on approvals.

Franchising, Building or Pre-Existing Centres

Now you what type of service you want to provide to the community and have been approved to offer care, next step is to think about whether you will be building a centre from scratch, buy a pre-existing centre from owners or buying a franchise?

It’s really hard to determine which one is more suitable because it really depends again on the locality and how much money you are willing to spend during this process.

• Building a Centre - When building a centre from scratch it will probably cost more than buying a pre-existing centre. You need to gain council permits, building permits, landscape and interior designers for both indoors and outdoors and much more! The biggest benefit of building a centre from the beginning is you can basically design the centre of your dreams.
• Pre- Existing Centres - There are many childcare centres that are available to buy that are already running. They have staff, children and families and everything within the centre has already been settled. Once you purchase the centre you will be the owner and take over responsibility. One of the benefits of purchasing a pre-existing centre is that all the work has already been done. All you really need to do is maintain it.
• Franchising Centres - In the childcare business there is some stiff competition out there when it comes to running a childcare business. Instead of being a competitor you can purchase a franchise. A franchise is basically running a centre based on the main centre. Initially start-up costs will be involved however you will receive all that you need through support services based on the main centre. All documentation, policies, procedures etc. will be the same as the main centre itself. If you have been working at a particular centre and like the way it is run then this is a great opportunity for you to start a franchise rather than starting from scratch.

No matter which option you choose you will need to spend a bit of money and it varies depending on a number of factors. It’s probably best to start off with a budget on how much you are willing to spend on the centre. It can range anywhere from $200,000 and more. Locality is also a big factor. City areas and surroundings are going to be more costly than rural areas. Another factor to consider is the size of the centre. It will cost less to build or maintain a centre for a smaller amount of children (less than 60) than a larger centre (more than 60). However you need to consider the needs of the community before determining how big the centre will be.

When starting a childcare business and running a centre, it’s important that the centre is insured. Insurance protects against accidents, personal injury, legal action and property damage. Insurance types, how much you need and requirements depend on the type of service you are providing.

Under the Family Assistance Legislation of the Department Of Employment, Education and Workplace Relations for education and care service the following insurance must be provided:

• Public Liability – not less than $10 million for each and every claim
• Workers Compensation - required by law
• Professional Indemnity – not less than $5 million per claim

Depending on the type of childcare service you are providing you can also consider purchasing the following types of insurance:

• directors’ and officers’ liability (for community-owned services)
• personal accident insurance for volunteers
• property damage
• fire and theft
• money insurance
• car insurance (for damage resulting from work related activities)
• fidelity guarantee
• electronic equipment

It’s best to seek support from an Insurance company authorised by the Australian Prudential Regulatory Authority on the types of different insurance that your service may require.

Legislative Requirements and Responsibilities

It’s imperative that when starting up a childcare business that you are aware and are up to date with the current legislation and law that is implemented throughout Australia. Even if you are an existing educator wanting to start up a childcare business and are familiar with the legislation and law you should understand it completely.

Throughout Australia most services (LDC, OSHC, FDC), in most states, are regulated by the National Quality Framework. The NQF includes:

• the National Law
• the National Regulations – Education & Care Services National Regulations
• a National Quality Standard – for assessing the quality of the service
• The National Quality Framework provides early childhood settings support in improving the quality of education and care, improve program delivery that impact child’s learning and development and assist families to make informed choices about which services suit their child best.

Under the National Regulations services must meet specific operational requirements including:

• Educational Programs & Practice
• Building Standards & Physical Environments
• Staffing Requirements
• Policies, Procedures & Records

For more information on NQF: http://www.qld.gov.au/education/childcare/providers/pages/legislation.html

The information and details provided here is just the beginning of the long road ahead of starting your own childcare business. It should be used as a starting point to make an informed decision about whether or not it is possible for you to own a childcare service. If you are willing to spend the money, go through all that’s necessary, you can create a fantastic service for children to learn and develop. Also, a childcare business is less likely to fail as the need for childcare centres are in high demand. So, good luck and take a chance to do something wonderful for the community…

http://www.acecqa.com.au

http://www.licence.smallbusiness.wa.gov.au

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http://deta.qld.gov.au

http://www.gowrievictoria.org.au/

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Free financial templates, how to start a childcare business.

Starting a childcare business can be a rewarding and lucrative endeavour. However, to ensure its success, careful planning and preparation are essential. One crucial step in this process is creating a comprehensive business plan. A well-crafted childcare business plan serves as a roadmap, outlining your goals, strategies, and financial projections. In this article, we will provide you with a step-by-step guide on how to write a business plan specifically tailored to a childcare business.

Section 1: Executive Summary

The executive summary is the first section of your business plan and provides an overview of your childcare business. It should be concise, captivating, and compelling. Include a brief description of your business, its mission, vision, and key objectives. Highlight the unique aspects of your childcare services and explain why your business will be successful. Additionally, mention the target market, competition, and your competitive advantage.

Section 2: Business Description and Structure

In this section, delve deeper into your childcare business by providing a more detailed description. Explain the specific services you will offer, such as daycare, preschool, after-school care, or specialised programs. Discuss your childcare business’s legal structure, whether it’s a sole proprietorship, partnership, corporation, or nonprofit organisation. Include information about the location, facilities, and any licensing requirements or regulations you need to comply with.

Section 3: Market Analysis

Conducting a thorough market analysis is crucial to understanding the childcare industry and identifying your target market. Research and analyse local demographics, such as population, income levels, and the number of children in your target area. Identify your target customers, including parents, guardians, and potential partnerships with schools or community organisations. Study your competitors, their strengths, weaknesses, pricing, and services. Use this information to define your unique selling proposition (USP) and develop strategies to differentiate your business from others.

Section 4: Organisation and Management

In this section, outline the organisational structure of your childcare business. Define the roles and responsibilities of key personnel, including yourself, management staff, and childcare providers. Provide brief biographies of key team members, highlighting their qualifications and experience in the childcare industry. Explain how you will recruit, train, and retain qualified staff. If applicable, include a staffing plan and any professional affiliations or certifications your staff holds.

Section 5: Services and Programs

Detail the range of services and programs your childcare business will offer. Describe the age groups you will cater to, the curriculum or educational approach you will follow, and any additional services (like transportation, meals, or enrichment activities). Emphasise the unique features of your programs and how they align with the needs and preferences of parents in your target market. Outline your schedule, including hours of operation, holidays, and vacation periods.

Section 6: Marketing and Sales Strategies

In this section, outline your marketing and sales strategies to attract clients and fill enrolment spots. Identify your target audience and define your marketing channels, such as social media, local advertising, community partnerships, or online platforms. Develop a pricing strategy that considers your expenses, competitors’ rates, and the value you provide. Describe how you will generate leads, conduct tours, and convert inquiries into enrolments. Include a marketing budget and a timeline for implementation.

Section 7: Financial Projections

Financial projections are crucial to understanding the financial viability of your childcare business. Begin with a startup budget that includes costs for licensing, permits, equipment, supplies, marketing, and initial staff salaries. Develop a cash flow projection, outlining your expected income and expenses on a monthly or quarterly basis for the first year. Include projected revenue, enrolment numbers, tuition rates, and any additional revenue streams. Create a profit and loss statement and a balance sheet to assess the profitability and financial stability of your business.

Section 8: Risk Analysis and Contingency Plan

Identify potential risks and challenges that your childcare business may face, such as changes in regulations, staffing issues, or unexpected expenses. Develop a contingency plan outlining how you will mitigate these risks and adapt to unforeseen circumstances. Consider having insurance coverage to protect your business and address liabilities. Demonstrate your ability to adapt and innovate by highlighting your problem-solving skills and the measures you will take to ensure the continuity and success of your business.

Writing a business plan for a childcare business requires careful consideration and research. By following the step-by-step guide outlined in this article, you can create a comprehensive and effective business plan. Remember, a well-crafted childcare business plan not only serves as a roadmap for your business but also provides credibility and demonstrates your commitment to success. Invest the time and effort required to develop a strong business plan, and it will serve as a foundation for the growth and prosperity of your childcare business.

A final note on something childcare business owners should look out for…

Maximising your assets:.

Operating a childcare centre entails various fixed expenses such as rent, mortgage payments, rates, and body corporate fees (if located in a building or managed estate). While expanding operating hours and offering extended care, including before and after-school programs, may seem like a straightforward solution, it may not always be cost-effective. Factors such as the local market size and competition should be carefully considered. Additionally, providing transportation services between the school and the centre might necessitate purchasing a vehicle. It is crucial to conduct a thorough cost analysis, taking into account the minimum and maximum number of children, to determine whether these additional services are truly advantageous considering the extra equipment, staff, time, and potential vehicle expenses associated with school transfers.

If you want to start a childcare business and need some help getting your business plan sorted, get in touch with us on 1300 644853 or at [email protected] (24/7 website chat and enquiry available).

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How to start a childcare business

According to IBISWorld, the household services sector represents a new frontier with regard to business opportunities, as time-poor, cashed-up consumers increasingly outsource household duties.

“Everything we traditionally did for ourselves – including cleaning, childcare and even beauty – will be increasingly outsourced [in the future],” IBISWorld says.

Parents in particular will find it difficult to juggle their many responsibilities, leading to an increased demand for quality childcare.

What is it and who is it suited to?

Childcare, or daycare, refers to the care of a child during the day by a person other than the child’s legal guardians. It is typically an ongoing service, particularly for working parents.

The service is provided in a specialised childcare facility or in the carer’s home, and can take on a more formal structure with education, child development, discipline and even preschool education.

You need to be extremely patient, energetic and enthusiastic to work in this industry. If you think you can cope with the tears and tantrums, you’re in the right place.

Rules and regulations

In order to work with children, some states require a Police Check while others require a Working with Children Check. You may also face criminal history screening or safety screening.

With regard to your business premises, ensure everything is safe and secure; any furniture and equipment must be well maintained and conform to safety standards.

You should also seek advice from your local council to ensure you comply with legal obligations relating to health and safety.

Research and competition

It’s important to note that by 2014, every childcare worker in Australia must have, at a minimum, a Certificate III in Children’s Services.

Also, half the staff must have at least a TAFE childcare diploma, and every single childcare centre must have a degree-qualified teacher onsite all day. So if you don’t have the right experience, make sure you appoint someone who does.

You then need to check out the competition, including other childcare centres, playgroups, mother’s groups and nannies.

You need to determine whether there is enough demand for another childcare service. Use your local library, council and the internet to research your area in order to gain a better understanding of the demographic.

You should also think about how many children you want to look after in your centre as this will affect the venue, staff numbers and pricing.

If this is your first venture, don’t try and compete with the chains that offer places for over 100 children. But to be viable, you will probably need to have at least 25 to 30 places.

Once you have looked at the competition and defined your ideal customer, you should start to get a feel for what to charge. Prices will vary depending on the demographic you’re catering to but also how old the children are. For example, it costs more to look after babies than toddlers.

Costs and earnings

You will obviously need to source suitable business premises. If you decide to rent, make sure you have a reasonable lease on the property. It will be very hard – and expensive – to move after only two or three years in a property.

If you are making structural alterations to a building that already exists, you will need to factor in the cost.

The building might also require some work to bring it up to fire safety standards. For example, ensuring you could evacuate all the children in an emergency.

You should also ensure that there is adequate security such as extra locks on doors and windows to keep strangers out and children in.

You should also budget for toys and equipment. And don’t forget that with 25 children playing all day long, the equipment will wear out more quickly than normal.

Setting aside a regular amount for replacement should help when the bills start rolling in. You can also save by buying secondhand, particularly in the beginning, providing everything is thoroughly disinfected before use.

Once you have established the venue and a reputation in the area, you should find that the places fill up fairly quickly.

With more parents either returning to work or ramping up their work commitments, good quality childcare is in short supply in many areas, which means parents are prepared to pay high prices.

To put a child in care for an entire day can cost between $55 and $125.

But even when your centre is full, you are likely to find that much of your fees from the children go on fixed costs. Staff and premises are likely to be the biggest costs but food, nappies and equipment all add up.

Your costs will inevitably rise and, when you try to put your prices up, you are likely to hear about it from parents. You should also remember that many of the costs are fixed, so expansion is the only way to grow the business.

Based on the competitive nature of the business, anything above breaking even could be considered a success.

Remember also that because of the relatively high start-up costs and low profit margins, it could take several years before you are close to making back what you originally invested.

An average day

According to the Aussie Childcare Network, your duties and responsibilities as a childcare worker could include the following:

• Work with staff members to manage the day-to-day running of the centre.
• Plan, supervise and engage in children’s activities and mealtimes.
• Maintain a clean and healthy environment for all children; allocate daily cleaning duties or outsource a cleaner.
• Communicate with parents including informing them of their child’s progress, and facilitate meetings with both parents and staff.
• Perform administrative duties, namely account-keeping.

Useful contacts

National Childcare Accreditation Council

1300 136 554

[email protected]

Family Day Care Australia

1800 621 218

[email protected]

Aussie Childcare Network

www.aussiechildcarenetwork.com

Australian Government Small Business Support Line

1800 777 275

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Child Care Business Plan

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The Toddler Warehouse

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

The education of our children needs to start earlier and earlier. The school system is failing.  Those who can hire private teachers and tutors to help with their children’s education should.

The Toddler Warehouse is a full-service child care/development facility that cares for toddlers from age three to five. The Toddler Warehouse will be concentrating on the upper end of the market: double-income professional parents. These personally ambitious parents are typically eager in terms of their children’s development and will be willing to pay to have their children attend the best facilities.

The Toddler Warehouse will be offering child care/development for toddlers age three to five. The Toddler Warehouse will be targeting double income professional families who, because of work obligations, do not have the time during the day to care for their child. The Toddler Warehouse will be targeting families that are interested in something more than simple baby-sitting facilities, they would like the children to be enrolled in a program that offers development of many different skills including: socialization skills, arts and crafts, large muscle group workouts, reading, numbers, etc. Parents who are professionals, who are ambitious by nature themselves, are typically eager for their children to move ahead and are willing to pay for the best development care services for their children.

Competition

The Toddler Warehouse will be competing in the child care industry. This industry is fairly broad and populated, there are companies at all levels, from the basic baby sitter services, to competitors of The Toddler Warehouse. There are service providers that offer standard business hours as well as services that offer night and evening hours. There are scheduled services and no reservation drop off services. Price, quality, and gut feeling drives a lot of parental choices. The Toddler Warehouse believes the secret to success is to 1) concentrate on only a portion of the market, and 2) choose a portion of the market that is growing.

The Toddler Warehouse’s mission is to provide top level child care. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers.

Expectations

We will be profitable in the first year. By year 3 we will be able to hire more general help which focuses on care since we are all set for teachers

Financial Highlights by Year

Financing needed.

Matt will invest $85,000

Problem & Solution

Problem worth solving.

The education of our children needs to start earlier and earlier. The school system is failing.  Those who can hire private teachers and tutors to help with their children’s education should.

Our Solution

The Toddler Warehouse is a full-service child care/development facility that cares for toddlers from age three to five. The Toddler Warehouse will be concentrating on the upper end of the market: double-income professional parents. These personally ambitious parents are typically eager in terms of their children’s development and will be willing to pay to have their children attend the best facilities.

Target Market

Market size & segments.

The Toddler Warehouse is targeting one specific customer group, the middle to upper class, two income professional family. This group of families have both parents working, not allowing them time to raise their child during the day. This group has the money for child care, and are willing to spend a little extra to get a higher level of care.

This customer segment has already begun teaching it’s child advanced concepts like reading, singing, socialization, etc. The Toddler Warehouse will continue to develop the children’s skills.

This customer group is typically made up of two professional parents. This would explain why the parents 1) have the money for more sophisticated child care, and 2) are ambitious in terms of their children’s learning and development.

Current Alternatives

There are many different competitors in the child care space. The Toddler Warehouse will only detail the direct, or reasonably direct competitors, and will not detail the myriad of other service providers that offer some sort of child care option. The direct competitors are:

• Established, often franchised, child care centers. These are typically larger facilities that offer care to a wide range of ages. The number of children serviced is usually quite large. The child care is adequate, although somewhat impersonal by virtue of its large size.
• Small, home based child care. These competitors are people that have a child care facility based out of their house. The quality of these ranges considerably, some are great, some are sub par.
• Medium sized companies. These are typically independently owned facilities. Some of theses will handle a wide range of ages, others will specialize with a specific age group.

Our Advantages

The Toddler Warehouse’s competitive edge is two-fold:

• Specialized training – The facility can only be as good as the teachers and assistants. With this in mind, The Toddler Warehouse has a specialized training program that all teachers and assistants are put through so they are proficient at teaching the specific programs that The Toddler Warehouse has developed for toddlers age three to five. The employees are put through an intensive week long course and only after they pass the intensive training will they be allowed to work with the children.
• Innovative learning programs – Typical learning programs for toddlers this age focus on specific traits and only work on one trait/ skill at once. While this is successful in reinforcing the skill, it is often very difficult for the child to appreciate the interrelationships of the different skills. Consequently, the child can learn the skill, but has difficulty applying the skill when faced with multiple stimuli. When the child is unsure of what to do because of the multiple stimuli and these several skills that they have learned independently, the child tends to shut down out of confusion. Matt’s Master’s thesis was based on Intertwined Learning Systems that teaches skills not in isolation from each other, but taught together. Matt’s research strongly supports the assertion that when the skills are taught together, just as you would expect to encounter them in real life, the children are able to assimilate the new task into their skill set much quicker.

Keys to Success

Our keys to success are: 

• To create a service based operation whose primary goal is to exceed customer’s expectations.
• The utilization of The Toddler Warehouse by at least 40 different families in the first eight months.
• To increase the number of client’s served by 20% each year.
• To develop a sustainable, profitable, start-up business.

Marketing & Sales

Marketing plan.

The Toddler Warehouse intends to concentrate on the double income working professional families because they are the segment that can most readily afford day care, are the ones who need day care because of their work obligations, appreciate the advanced learning and development The Toddler Warehouse has to offer, and lastly are a growing segment of our society.

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As America continues to be a society of people working long hours, there will always be the need for child care. The trend of longer work weeks is increasing and this drives The Toddler Warehouse’s business.

The Toddler Warehouse’s sales strategy will be targeting double income working professional families. These families have the money to spend on child care and these parents are much more likely to appreciate the advanced learning systems taught at The Toddler Warehouse based on Matt’s thesis.

The sales strategy will be based on a communication effort to explain the virtues of the program and how time at The Toddler Warehouse can speed up the children’s development considerably. In addition to one on one explanations of the program and its merits, the prospective parents will be given tours of the facilities. The tour of the facility will serve two purposes:

• The tour will be used as a way to impress the prospect of the facilities that The Toddler Warehouse has. These facilities were custom designed to achieve very specific educational goals and The Toddler Warehouse is immensely proud of the facilities.
• The tours typically occur during the day and this becomes a perfect opportunity for the potential customer to view the care as it is occurring. This will serve to build a trust bond between The Toddler Warehouse and the parent who naturally is cautious about leaving the child with strangers to have the child cared for and taught the entire day.

In essence, The Toddler Warehouse  is letting the facilities and teacher/student interactions speak for themselves. Because of the high level of service, this is entirely possible.

Locations & Facilities

The Toddler Warehouse, soon to be located in Salem, OR, will offer child care services for kids between the ages of three and five. The Toddler Warehouse will offer services from 6 a.m. to 7 p.m. The children will be exposed to a wide range of activities including arts and crafts, socialization, large muscle group activities, and general learning. The Toddler Warehouse will be priced out of some people’s budget, but will offer a low student to teacher ratio and well trained staff. The Toddler Warehouse will be located in a recently purchased and converted home that now is solely a child care center.

Equipment & Tools

The Toddler Warehouse offers Salem an upper-end child care facility for toddlers age three to five. The Toddler Warehouse offers a low teacher to student ratio, custom facilities, and innovative learning programs. The Toddler Warehouse hours will be a bit wider rage than normal business hours to accommodate the working parents, the target customer.

The two income families have children, yet both parents work. The Toddler Warehouse is an innovative solution that acts as virtual parents, broadening the children’s skills during the day. This is not a baby sitter facility. The children are engaged throughout the day, learning new skills and reinforcing already acquired ones.

Milestones & Metrics

Milestones table, key metrics.

Key metrics are: 

• The # of families paying fees to breakeven 
• increase the # families paying fees by 20% year over year 
• training teachers and assistants 
• keep on top of the educational tools 

Ownership & Structure

The Toddler Warehouse will be an Oregon Corporation, founded and owned by Matt Ernal.

Management Team

Matt Ernal, the founder and owner of The Toddler Warehouse will be running the daily operations. Matt got his undergraduate degree in English from the University of Oregon. Upon graduation, Matt was unsure of what he wanted to do so he travelled to Indonesia and taught English for three years. For the first year, Matt lived with a local family. In exchange for room and board, Matt cared for the family’s two children. Although he had never done any child care before, Matt found this very satisfying.

Upon returning to the US, Matt was contemplating pursuing something with teaching. His experience in Indonesia was quite positive, both the English classes and caring for the young children. Ultimately, it was the experience with the young children that led Matt to consider a career teaching young children. Matt entered Western Oregon University’s nationally recognized Master of Education Program to pursue toddler development. After graduation, Matt was confident of his abilities and decided that he would appreciate the autonomy of running his own business. He purchased a house for the facility has been working hard on this project ever since

Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Our key assumptions: 

• Kids need to have a place that caters to the way they learn 
• Kids need somewhere that teaches them life skills
• Education starts at a very young age
• Parents need somewhere safe and nurturing to leave children while they finish their workday. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

The Toddler Warehouse’s start-up costs include:

• Legal: $1,000
• Stationery etc: $100
• Brochures: $350
• Art supplies: $150
• Kitchen supplies: $200
• Cleaning supplies: $100
• Medicine kits: $100
• Matts and pillows: $150

Total $ 2150 

Sources of Funds

Our founder will invest $85,000 to get the operation up and running. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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How to Start a Childcare Business

Welcome to the definitive guide on starting a childcare business in Australia. This article is your roadmap to establishing a successful childcare service, encompassing all the necessary steps and legal requirements to launch and operate your business efficiently. Each step is a pivotal move towards your entrepreneurial journey in the childcare sector.

Key Activities for Launching a Childcare Business

In this section, you will find a list of essential activities to start your childcare business:

• Develop a Business Plan
• Register Your Business
• Secure a Suitable Location
• Obtain Licenses and Approvals
• Comply with National Regulations
• Childcare Subsidy Compliance
• Staff Recruitment and Training
• Develop Policies and Procedures
• Implement Health and Safety Measures
• Marketing and Enrollment

1. Develop a Business Plan

When considering a venture into the childcare business in Australia, it is crucial to develop a comprehensive childcare business plan . This plan should articulate a clear vision and include operational strategies, financial forecasting, and a thorough market analysis. Key objectives should be clearly defined, with a strategic approach to achieving them in a competitive and demographic context. Innovative design in childcare centres, sustainability, and value-added services such as co-located educational programs are becoming increasingly important.

Understanding the financial landscape is critical, with financial projections that are both ambitious and realistic. Awareness of the sector’s trends, government reforms, and funding opportunities can provide a competitive edge. The industry is adapting to the needs of busy families, offering holistic services and more than just basic care. With the Australian government injecting funds and reforming policies to encourage workforce participation, demand for childcare services is expected to rise alongside the population, which is forecasted to reach 30 million by 2033.

Aspiring childcare business owners should consider these elements and trends in the context of Australia’s growing and evolving market. Tailoring a business plan to these factors can set the foundation for a successful and sustainable childcare business.

2. Register Your Business

Registering your business is a pivotal step in legitimizing your childcare operation. In Australia, this involves selecting a business structure—be it a sole trader, partnership, or company—and registering with the Australian Business Register. This decision will influence your tax obligations, personal liability, and the ability to raise capital. It is crucial to consider the size and scale of your childcare service when making this choice. Registration also involves obtaining an Australian Business Number (ABN) , which will be a unique identifier for your business in all dealings with the government and other entities.

3. Secure a Suitable Location

Finding the right location is essential for the success of your childcare business. The property must comply with the stringent safety and space regulations outlined in the National Quality Framework. It should be accessible to families and staff, situated in a safe neighborhood, and have the potential for expansion. The site must accommodate your envisioned capacity and provide a conducive environment for the learning and development of children. Consideration of outdoor play areas and proximity to local schools and parks can also be advantageous.

4. Obtain Licenses and Approvals

Navigating the regulatory landscape is a critical step in setting up a childcare business. Obtaining the necessary licenses and approvals from the Australian Children’s Education and Care Quality Authority ensures that your service meets the required educational and care standards. This process includes acquiring both Service Approval and Provider Approval, which are indispensable for operating legally. These approvals not only signify compliance but also serve as a reassurance to parents that your childcare business upholds high-quality standards.

5. Comply with National Regulations

Compliance with national regulations is not negotiable in the childcare industry. Adhering to the National Quality Standard guarantees that the service you provide aligns with the highest standards of care and education, as mandated by the Early Years Learning Framework. This framework guides educators in developing quality learning programs that enhance children’s educational and developmental outcomes. Regular assessments and ratings by the ACECQA will be part of your operational calendar, ensuring ongoing compliance and continual improvement.

6. Childcare Subsidy Compliance

Understanding and integrating the Child Care Subsidy scheme into your business model is essential. This government initiative provides financial assistance to families, making childcare more affordable. Compliance with the CCS requirements is fundamental, as it not only benefits the families but also sustains your business through consistent government support. Ensuring that your service is approved and meets the CCS conditions will make your childcare center an attractive option for parents.

7. Staff Recruitment and Training

Assembling a team of qualified and dedicated staff is crucial. Recruiting individuals who are not only credentialed but also share your childcare center’s philosophy and values is essential. Providing comprehensive training, including First Aid and child protection courses, ensures your team can deliver the highest standard of care and education. Continuous professional development must be a priority to keep your staff abreast of the latest in early childhood education practices and standards.

8. Develop Policies and Procedures

Your childcare center’s policies and procedures are the backbone of its daily operations. They should cover all aspects of health, safety, nutrition, child protection, and educational programs. These policies not only guide your staff in providing consistent care but also demonstrate to parents your commitment to maintaining a safe and nurturing environment for their children. Regularly reviewing and updating these policies ensures they remain relevant and effective.

9. Implement Health and Safety Measures

Health and safety are of paramount importance in a childcare setting. Implementing robust health and safety measures mitigates risks and ensures the wellbeing of children in your care. This involves setting up a safe physical environment, establishing clear procedures for handling emergencies, and maintaining high standards of cleanliness and hygiene. Training staff in health and safety protocols is also a fundamental aspect of your operational responsibilities.

10. Marketing and Enrollment

A strategic marketing plan is vital to attract families to your childcare center. It should highlight the unique aspects of your service, such as your educational philosophy, the quality of care, and any specialized programs you offer. The enrollment process should be streamlined and parent-friendly, providing all the necessary information and support to prospective clients. Effective marketing and efficient enrollment procedures are key to building a strong client base and ensuring the growth and sustainability of your childcare business.

Your Pathway to a Rewarding Childcare Business

We hope that this comprehensive list will help, guiding you through the intricate journey of starting a childcare business. The road to establishing a nurturing and educational environment for children is paved with dedication and meticulous planning. Each step, from developing a robust business plan to implementing effective health and safety measures, is crucial for crafting a service that stands out in Australia’s vibrant childcare sector.

Embarking on this venture brings with it a promise of fulfilling careers and the joy of making a significant impact on young lives. The activities outlined reflect a roadmap tailored to navigate through regulatory landscapes, ensuring your business not only thrives but also resonates deeply with Australian families seeking quality childcare services.

Our professional team at Mollard Property Group is always ready to lend their expertise in securing the perfect location for your childcare business, a critical step that anchors the foundation of your enterprise. We understand that the journey doesn’t end with the launch; it flourishes with the growth and evolution of your business. Thus, we are committed to providing ongoing support, helping you adapt and excel in an ever-changing landscape.

As you step forward, remember that the success of your childcare business is a testament to your vision and hard work. It’s a service that goes beyond just business—it’s about nurturing the future. At Mollard, we’re not just about property solutions; we are about being a part of community building, one successful venture at a time. Let us be a part of your journey, providing the support and services you need to succeed in the heartwarming world of childcare.

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Starting a Childcare Business in Australia: Steps for Success

Starting a childcare business in australia: essential steps for success.

Embarking on a business adventure within the thriving Australian childcare industry may seem like a daunting task. The plethora of conflicting information can be bewildering. Fear not, you’ve already tackled the most challenging part: conceptualising your business idea!  In this guide, we will demystify the complexities of starting a childcare business in Australia, focusing on key aspects such as business structuring, insurance, taxation, finance, and operational strategies.

Structuring and Protecting Your Childcare Business Assets

Selecting the ideal business structure.

Your choice of business structure impacts various aspects of your venture, from taxes to asset protection and future growth potential. Among the options are:

• Trusts: Allowing flexibility in asset distribution.
• Companies: Offering limited liability and potential tax benefits.
• Partnerships: Sharing responsibilities and profits with partners.
• Sole Traders: Operating individually with full control.

Consult with an expert to align your business goals with the optimal structure.

Investing in Insurance

Insurance isn’t just about complying with legal requirements; it’s a shield for your investment. Public liability, professional indemnity, and workers’ compensation are vital in the childcare sector. Seek professional guidance to identify the best policies for your needs.

Navigating Tax Registrations

Your business structure will guide the necessity for an Australian Business Number (ABN) and Tax File Number (TFN). Depending on your circumstances, you may need to register for GST, PAYGW, FBT, or other specific taxes. It’s prudent to consult a tax professional to avoid any compliance mishaps.

Financing Your Childcare Venture

Setting up a business account.

A separate bank account for your business ensures clarity in transactions and assists in financial management.

Securing Additional Funds

Depending on your needs, you may require further capital. Prepare a comprehensive business plan to showcase your profitability to potential financiers.

Operational Insights: Staffing and Record Management

Employment considerations.

Your childcare business may require hiring staff. Understand your obligations towards pay rates, superannuation, and leave entitlements. Proper contracts and compliance with ATO requirements are paramount.

Efficient Record Keeping

A streamlined record-keeping system is your ally in managing payroll, invoicing, and other financial aspects. Modern accounting software can simplify this process.

Conclusion: Your Path to a Successful Childcare Business

Launching a childcare business in Australia involves intricate planning and execution. By focusing on vital aspects like structuring, insurance, taxation, financing, and operations, you pave a smoother path to success.

At Early Learning Management (ELM), we’re dedicated to guiding childcare providers through these critical stages. With expertise in every facet of childcare business management, we’re here to support you in turning your vision into reality.

Ready to kick-start your childcare business? Connect with ELM today , and let’s build a bright future for Australia’s children!

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How to Write a Business Plan for a Daycare: Complete Guide

• January 30, 2023

👇 Check all our resources on daycares 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your daycare business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it’s the summary of the different sections included in your business plan.

Why do you need a business plan for your daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write an executive summary for your daycare?

The executive summary of your daycare business plan should include the following important information:

Business Overview

Introduce your company (its name, its mission) and the history behind it: why did you decide to create a daycare in your area today? Why you? 

Also, that’s where you should expand on the business: where will the daycare facility be located? How old are the children you target? How many children will you be able to take care of? What are the amenities (classrooms, playground, cafeteria, etc.)? 

Market Overview

Provide here a deep market analysis that backs your decision to open a daycare business in your area today. Why would your business succeed given current market conditions? 

For example, the market analysis should include information like: what are your competitors in the area? What are their characteristics, strengths and weaknesses ? Who are your target audience (parents and children)? Is that in line with the demographics in your area?

Management & People

Who is the management team? What is your/their experience in the daycare industry?

Financial plan

What is your expected revenue and profitability for the next 5 years? When do you expect to break-even? Simply include here a chart of your key financials (e.g. Revenue, Gross Profit, Net profit )

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How do you intend to spend the money?

Daycare Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Daycare Business Overview

The business overview section of the daycare business plan summarizes the basics of your facility, including the background information, business model, services, target audience, and legal structure. 

a) History of the Project

When you launch a daycare business, you want it to grow and even become the best in the region if possible. One small element that can catalyze your company’s growth is its history. You don’t have to exaggerate the information here, but try to include useful details that will make your daycare business stand out. 

For a business as sensitive as daycare, trust overrides anything else. So, make sure to include in your business plan your experience and passion for children to demonstrate to investors you are qualified and the right person to successfully run a new daycare facility.

Also, flesh out the history behind the project: why are you starting a daycare now? For example, you may have noticed a lack of child care services for toddlers and infants in the city.

b) Business Model

Next up is the business model. This is the revenue-generating plan that identifies how your business operates. A daycare business model should be succinct and address specific things about the business. 

For instance, is it a commercial daycare facility or a family daycare? Is it an independent facility or a partnership? And should you opt for a daycare franchise? 

Keep in mind that daycare facilities vary by the target age group. So, you can opt for a childcare center, a family daycare, a kindergarten/pre-school, or a nursery school.

c) Daycare Services

It takes a lot to raise a child. So, be clear on the services you want to offer in your newly founded daycare facility. The quality of services will make your business more attractive. But an even bigger factor will be the type of services you provide at the facility.

Indeed, a lot happens inside a daycare facility, from hands-on learning (classrooms, private tuition) to field trips, games and community events. 

d) Pricing Strategy

Age is a key factor when setting the prices of your daycare services. On average, parents across the US pay about $9,400 per year on child care per child. Of course, the actual figure will vary based on a number of factors, but this is a great starting point when getting into the industry. 

An accurate pricing strategy can help you outshine your biggest competitors. However, don’t forget that setting cheaper prices isn’t necessarily the best strategy, just in the same way overpriced services may turn off potential clients. 

e) Target Audience

Daycare centers are so named because they are about a child’s well-being. However, the final decision rests with the parents, who must buy into your idea and long-term vision for the facility. 

For this type of business, you have a definite target market . And all you have to do is ensure your facility is closer to a busy neighborhood with many children. Find out if the families truly need child care services, why they need these services and the children’s average age. 

Finally, make sure your services are aligned with your target audience. For example, you wouldn’t necessarily succeed with a daycare operating 9am – 4pm in an area where parents typically work long hours in the city and need time to commute back to their neighborhood to pick up their kids.

Same goes for pricing: if you offer high-quality expensive daycare services, make sure your daycare is either located close to offices or in an area where affluent parents work or live.

f) Legal Structure

Finally, your business overview section should specify what type of business structure you opt for. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Daycare Market Overview

In the market overview section of your business plan, you must cover 2 important areas:

• Market trends : how big is the daycare industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition analysis : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?

a) Daycare Market Trends

How big is the daycare industry in the us.

It’s always helpful to base your business decisions on the latest trends in the US market. For instance, the US daycare market had a value of approximately $54.3 billion in 2019 . And it is projected to grow at an annual rate of 3.9% from 2020 through 2027. 

According to reports, the high number of parents occupying full-time and part-time jobs is a major driving force behind the increasing demand for daycare services. No matter how you look at it, these statistics make the daycare business even more lucrative, provided you get all the basics right through your business plan. 

How big is the daycare industry in your region?

After the US, assess the size of the daycare market in your city or area. Focus on the zone where you plan to offer daycare services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup . To give you an example, let’s assume you plan to operate in an area where there are already 10 competitors:

As we know the US daycare industry is worth $54 billion today, and there are about 230,000 child care centers , therefore the average annual turnover per child care center is around $235,000.

Now, we can safely assume that the daycare industry is worth $23 million in your area (10 centers).

How fast is the daycare industry growing in your region?

Growth is an important metric for assessing the status of the daycare industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 8 daycare competitors in the region in 2018, and 10 in 2022, the annual growth rate is 6% per year.

b) Daycare Competitor Analysis

At the very least, your competitor analysis should answer all the questions below:

• How many daycare businesses are the area where you plan to open yours?
• What type of daycare businesses are there: home-based vs. center-based home care, early care vs. early education & daycare, etc.
• What age range do they specialise in?
• What services do your competitors offer?
• What amenities do your competitors have (playground, classrooms, etc.)
• What’s their average price (daily rate / monthly rate)?
• What is the child / staff ratio of your competitors?

4. Sales & Marketing Strategy

For some existing daycare facilities, marketing isn’t the most important aspect of running the business. But you’ll probably have to implement a few marketing strategies at the beginning to attract the first families , especially if you’re starting a new daycare facility.

a) Daycare Market Channels

A daycare business doesn’t have diverse marketing channels like retail stores or other businesses. So, this may limit your options when it comes to new marketing channels. 

Apart from word of mouth, other marketing channels include;

• Social media
• Online listing (Google business, Facebook business page)
• Word-of-mouth

b) What are Your Unique Selling Points (USPs)? 

Daycare facilities offer pretty much the same services, and it’s not easy to stand out from the competition. However, a few factors can be useful when evaluating your opportunities in a competitive market, including:

• Target age group : You may cover a unique age group as opposed to your competitors
• Opening hours : you may offer longer opening hours to accommodate for different parents’ jobs and availabilities
• Price : Your services may be cheaper than your competitors
• Quality & amenities : Quality services and extra amenities (outdoor playground, etc.) will make your daycare facility more attractive vs. competitors
• Services : Your services may go beyond the standard hands-on learning and kid games 

5. Management & People

The 5th section of your daycare business plan should be about people. It should include 2 main elements:

• The management team and their experience / track record
• The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a small daycare business run by 1 or 2 persons doesn’t need the same level of detail vs. a large center with 50 children or more.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, childcare staff, cooking staff, human resources, finance, etc.)?

Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles and employees. Make sure to highlight with reporting lines who manages/supervises whom.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your daycare is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new daycare facility, or add capacity to an existing daycare center, renovate your facilities, etc.)
• The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For a daycare, startup costs are all the expenses you incur before you open the space to your customers. These expenses typically include: renovation costs, equipment and furniture, etc.

The startup costs for opening a child care center depend on various factors such as the location and size of your daycare facilities, the capacity (the number of children you plan to have), the quality of the amenities, etc. 

We’ve identified that it costs anywhere between $130,000 to $490,000 to start a daycare business with 50 children . See below the cost estimates.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. Let’s first start below with startup costs. 

c) Financial Projections

In addition to startup costs, you will now need to build a solid daycare financial model over 5 years.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of children over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your daycare center. Now that we have explained what type of daycare services your company would offer, at what price, your marketing strategy , management and people, this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our daycare financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

Privacy Overview

Key Considerations When Running a Childcare Business

By Meryem Aydogan Law Graduate

Updated on March 15, 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

Applicable Laws and Regulations

Type of service, licences and approvals, find qualified staff, local government and council approvals, food hygiene and preparation, illnesses and health concerns, necessary legal documents, key takeaways, frequently asked questions.

Running a childcare business is equal parts exciting and daunting. You need to consider how you will market your business, find qualified and motivated staff, set up a valuable learning environment and meet parental expectations. You should also be aware of your legal obligations. Specifically, you may need a licence or approval to operate your childcare business. This article explores how you can fulfil your obligations and licence requirements when running a childcare business.

The National Quality Framework (NQF) provides a national approach to regulation, assessment and quality improvement for early childhood education and care services across Australia. It applies to childcare services that are predominantly offered outside the child’s home. The NQF includes:

• the establishment of a national body to regulate, guide and implement the reforms, called the Australian Children’s Education and Care Quality Authority (ACECQA);
• a set of standards for each service in Australia known as the National Quality Standard (NQS); and
• the enforcement of the NQS through the overarching national framework governing each state and territory. An exception is Western Australia, which consists of the Education and Care Services National Law Act 2010 (National Law) and the Education and Care Services National Regulations.

Most states and territories have adopted the National Law through further legislation, such as:

• Children (Education and Care Services National Law Application) Act 2010 (NSW); and
• Education and Care Services National Law (Queensland) Act 2011. 

Victoria has adopted the National Law without further legislation.

As a childcare business owner , the laws and regulations applying to you will depend on the type of service you are providing. There are a number of services classified as early childhood education and care options, including:

• centre-based childcare or long daycare – provided in a more formal centre setting;
• private home or family day care  – a more flexible type of care provided in a carer’s home;
• after school care or outside school hours care  – provided in a more formal centre setting before and after school hours; and
• in-home care  – provided by educators, generally in the child’s own home.

To operate a childcare business in Australia, you need:

• provider approval;
• service approval; and
• supervisor certificates.

There are strict regulations in place when operating a childcare business in Australia. Before starting your business, you must ensure you have applied for the proper approvals. 

A provider approval will determine whether you are fit to run a childcare business. Once you have provider approval, you can then apply for service approval.

Each state and territory has its own regulatory authority which will assess you against a set of standards. Generally, you will be evaluated based on the following:

• your compliance history before your current application, if you are an existing or previous approval holder;
• relevant results from Working With Children Checks and national criminal history checks; and
• the documentation you have provided to support your application.

Following the assessment, you may be required to:

• attend information and training sessions;
• perform knowledge assessments; and
• attend department interviews.

You will then need to prove to the relevant regulatory authority that you are a fit and proper person. Additionally, you must satisfy that you understand your obligation to ensure the health, safety and well-being of the children in your care.

If your application is rejected and you believe an error has been made, you may be allowed to appeal the decision.

Once you have the appropriate licences, the next step is finding qualified childcare workers . They need to have completed their Working With Children Check and mandatory notification training.

You and your staff need to be vigilant and aware of your obligations under child protection laws, especially in the states and territories. For example, the Children and Young Persons (Care and Protection) Act 1998 in NSW, Children, Youth and Families Act 2005 in Victoria and Child Protection Act 1999 in Queensland. 

It is not necessary for all of your staff to have childcare qualifications, although it is best practice to employ people who are suitably qualified in all aspects of childcare. The NQF states that 50% of the educators in a childcare business must have an approved diploma-level qualification. The minimum qualification to run a childcare business is a Certificate III in Early Childhood Education and Care. You should also be equipped to administer CPR and first aid.

As a business owner, you are responsible for checking each staff member’s qualifications and maintaining records of ongoing training and renewal periods.

As an employer, understand your essential employment obligations with this free LegalVision factsheet.

Operating a childcare business requires approvals from local governments and councils. Depending on the service you provide, you may need planning permits from the council before you can start operating. 

Furthermore, areas within your council are ‘zoned’ to allow for certain types of infrastructure, so you may need to seek approval to run a childcare business in your proposed site.

When developing a menu for your childcare business, you must meet food hygiene and preparation standards . Food Standards Australia and New Zealand (FSANZ) is a government body that develops food standards across both countries.

FSANZ issues the Food Standards Code and provides extensive resources to childcare businesses about:

• risk management;
• allergy advice; and
• food recalls.

Additionally, local governments and councils may inspect the premises of the childcare business. This is to ensure the food storage, preparation and service processes meet hygiene standards and food safety guidelines.

In addition, you should be aware of federal and state-based health department rules regulating what childcare businesses should do in the event of illnesses or health concerns. The Australian Department of Health (ADH) provides statements regarding health advice for childcare businesses. For example:

• strategies your childcare business should implement; and 
• reporting requirements you should comply with if a child becomes ill in your care. 

Before starting any business, it is essential that you have the required legal documents in place. Depending on the type of childcare service you provide, you may have different legal requirements. However, the following documents are a good place to start:

• employment contracts/independent contractor agreements;
• code of conduct and team handbook;
• service terms and conditions;
• non-disclosure/confidentiality agreements;
• privacy policy;
• vendor agreements; and
• intellectual property protection.

When running a childcare business, your primary responsibility is to the children in your care. You must ensure that you:

• hold the appropriate approvals;
• hire qualified staff; and
• keep updated with government health advice and standards.

You should also abide by your obligations under the legislative regimes governing the operation of childcare businesses. If you need help getting your approvals or setting up your service, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page . 

A Working with Children Check (WWCC) is a requirement for anyone who works or volunteers in child-related work in NSW. It involves a National Police Check (criminal history record check) and a review of reportable workplace misconduct. The check lasts five years and undergoes continuous monitoring, even if the check holder moves jobs.

There are two main approvals required to operate a childcare business in Australia:

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How to Write a Business Plan for Daycare and Preschool

• brightwheel
• Running a business

Writing a daycare or preschool business plan is a big task, but due diligence and hard work will help you understand what you’ll need to launch and run a daycare or preschool successfully.

What do daycare investors want?

Your local government will have rules and regulations you’ll need to follow as a small business owner and childcare provider. Start by reviewing the childcare licensing guidelines for your state and city. Once you’re clear on licensing guidelines, you’re ready to start writing your childcare business plan.

The purpose of a business plan is to help secure funding. You’ll likely need financing to launch your preschool or daycare, especially if you want to avoid the monthly repayment of a loan. 

Investors provide businesses with money in exchange for partial ownership. As a result, they expect a larger return on their initial investment. Because many investors work in business, they prefer to invest in an established company.

Most investors look for:

Industry background and experience

Financial performance and promise.

Investors want to make money. Therefore, they are more inclined to work with experienced entrepreneurs and business owners to guarantee a return on their investment. 

This might sound discouraging for those with little experience or without a business management background, but the opportunity doesn’t end there. You could consider bringing on a partner with a business background. Additionally, many investors act as a source of business advice. 

You need to demonstrate that your business will make money. Investors will likely want to see signs of business growth before they give you money. 

Additionally, investors will want to know about your financial stability. Questions an investor might ask are:

• What do you plan to do with the money?
• Has your business been up or down in recent years?
• Is your company losing money? Are there signs of growth for the future?
• How do you plan to repay your investment?

Of course, every investor is different, so they’ll consider various factors. While experience and financial promise are at the top of the list for most investors, they might also look for uniqueness, business readiness, an effective business model, and more.

Writing a daycare business plan

We’ve discussed licensing and investors. Now, you’re ready to begin the framework of your business plan for daycares and preschools. Here’s what you’ll need to get started:

Business description

Needs assessment, insurance policies, operating policies and procedures, marketing strategy.

Start with the basics: what does your daycare do? Detailing the service you’re offering will help you create a clear business plan. Next, you might want to write some goals or even a mission statement outlining your purpose and motivation.

Start by looking at general daycare or preschool industry trends, then narrow your scope to the preschools or daycares in your local area. Next, you’ll need to figure out who your target customers are and confirm that there is a need for a business like yours in your community. 

Are there a lot of young families in your neighborhood? Are you located somewhere convenient for commuting parents? Does your business offer a specific service that your competitors don’t, like early check-in or extended hours? 

Also, check out the competition. Research the existing daycare or preschool options in your community. Look at current preschool or daycare business plan samples. What makes your daycare or preschool unique? 

Developing detailed budgets will help you run your small business. You’ll need to compare your current cash flow and expenditures to determine whether you’ll make a profit.

Build a budget for unexpected costs. For example, how many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware of America offers some terrific budgeting resources for this process.

Depending on the type and size of your preschool, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance in building this part of your preschool business plan.

Create a comprehensive handbook for families and staff that includes you center's policies and procedures. For instance, you'll need to develop an emergency plan , daycare sick policy , and other safety protocols according to your local childcare licensing requirements. 

Your staff handbook will be a helpful resource your employees can reference and include all your employment policies including work and pay schedules, benefits, and information about professional growth and development. You can also include information on your center's philosophy and curriculum, classroom procedures, and expectations for working with children and families.

Your marketing strategy is the key to attracting customers. Decide what type of advertising you will use in front of potential customers. For example, list your school in local directories and participate in parenting and kid-friendly community events. Run a social media campaign focusing on your target population.

Another big part of childcare business marketing is differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. A tool like brightwheel's center management feature will streamline your center's admission process, record keeping, and reporting, saving you up to 20 hours per month. 

You can also use brightwheel for recording and tracking daily events and activities, and sending real-time updates to families throughout the day. It also offers secure, digital check-in/check-out and a paperless billing system. This is a great way to keep your families looped in on daily activities and handle all of your administrative tasks in one place.

Your business is ready!

Writing a business plan can be stressful, but it doesn’t have to be. Once you secure the proper licensing, use the information in this article to guide you through creating a solid daycare business plan that drives investors and financing to your business.

These are just the basics to get you started. For further information, the U.S. Small Business Administration’s website has detailed instructions on creating each necessary part of a successful business plan. 

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Preschool Business Plan Template

Written by Dave Lavinsky

Preschool Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their preschool companies. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a preschool business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your preschool business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a preschool business or grow your existing preschool company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your preschool business to improve your chances of success. Your preschool business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Preschool Businesses

With regard to funding, the main sources of funding for a preschool business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for preschool companies.

Finish Your Business Plan Today!

How to write a business plan for a preschool business.

If you want to start a preschool business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your preschool business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of preschool business you are running and the status. For example, are you a startup, do you have a preschool business that you would like to grow, or are you operating a chain of preschool businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the preschool industry.
• Discuss the type of preschool business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of preschool business you are operating.

For example, you might specialize in one of the following types of preschool businesses:

• Parent co-op preschool : Preschools that offer lower-cost enrollment in exchange for the volunteer work of a parent on a regular (typically weekly) basis. This type of preschool employs a teacher and an aide, but also includes parents, which reduces the payroll costs considerably.
• Academic/play-based preschool: Preschools that stress learning via a number of experiences in academic introductions. Play-based learning is also introduced in math and pre-reading games and other forms of learning-while-you-play interactions.
• Religious preschool: Preschools that adhere to the religious practices and beliefs of the parents in teaching, while including academic and play-based experiences for preschoolers.
• Learning system preschool: Systems of specific teaching theories, such as Waldorf and Montessori, are offered at this type of preschool. These preschools are based on proven structures for learning.
• Development-interaction preschool: Preschools that offer a holistic approach to preschool, focusing on the emotional, intellectual, social and physical growth of each preschool child.

In addition to explaining the type of preschool business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of programs offered, the number of preschool graduates, reaching X number of preschool locations, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the preschool industry. While this may seem unnecessary, it serves multiple purposes.

First, researching the preschool industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your preschool business plan:

• How big is the preschool industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your preschool business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your preschool business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: parents, grandparents, children, and churches, and schools.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of preschool business you operate. Clearly, parents would respond to different marketing promotions than churches, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other preschool businesses.

Indirect competitors are other options that customers have to choose for their preschoolers that aren’t directly competing with your service. This includes private tutors, public schools, nannies and babysitters. You need to mention direct competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of families do they serve?
• What type of preschool business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide options for translation services?
• Will you offer family-discounts that your competition doesn’t?
• Will you provide better playgrounds and amenities?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

    Finish Your Business Plan Today!

Marketing plan.

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a preschool business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of preschool company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide developmental, religious, academic or play-based learning systems?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the services you offer and their prices.

Place : Place refers to the site(s) of your preschool(s). Document where your company is situated and mention how the sites will impact your success. For example, is your preschool business located in a new, master-planned community, near a business district, or in a standalone building?  Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your preschool marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your preschool business, including answering calls, placing preschoolers into programs, meeting with parents, planning and providing teaching sessions, billing and collecting revenue, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to open your fifth preschool, or when you hope to reach $X in revenue. It could also be when you expect to expand your preschool business to a new community in your city.

Management Team

To demonstrate your preschool business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing preschool businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a preschool business or successfully leading as a principal of a public elementary school.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you open a new preschool every two years, or offer summer school and daycare sessions? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your preschool business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a preschool business:

• Cost of classroom furniture, equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your list of parents who have enrolled their children on contract for the next two years, or the waitlist of parents who want their children to attend your preschool.

Writing a business plan for your preschool business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the preschool industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful preschool business.

Preschool Business Plan FAQs

What is the easiest way to complete my preschool business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your preschool business plan.

How Do You Start a Preschool Business?

Starting a Preschool business is easy with these 14 steps:

• Choose the Name for Your Preschool Business
• Create Your Preschool Business Plan
• Choose the Legal Structure for Your Preschool Business
• Secure Startup Funding for Your Preschool Business (If Needed)
• Secure a Location for Your Business
• Register Your Preschool Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Preschool Business
• Buy or Lease the Right Preschool Business Equipment
• Develop Your Preschool Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Preschool Business
• Open for Business

Where Can I Download a Free Business Plan Template PDF?

Click here to download the pdf version of our basic business plan template.

Our free business plan template pdf allows you to see the key sections to complete in your plan and the key questions that each must answer. The business plan pdf will definitely get you started in the right direction.

We do offer a premium version of our business plan template. Click here to learn more about it. The premium version includes numerous features allowing you to quickly and easily create a professional business plan. Its most touted feature is its financial projections template which allows you to simply enter your estimated sales and growth rates, and it automatically calculates your complete five-year financial projections including income statements, balance sheets, and cash flow statements. Here’s the link to our Ultimate Business Plan Template.

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OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business plan consultant can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Child Care Business Plan

There is a significant amount of people who dream of making it out there independently. The dream of being their own boss and to be able to support themselves and give others a chance to find a job is something a lot of people would love to do someday. A lot of people also dream of working for a good company and from the experience they get, they are able to find out how a good business would run its own course. Regardless of what kind of business you plan on running one day, it is important to know how you construct your business. What should be done and how to do it without having to go through a lot of risks. They say to have a business that you can both earn and learn to love. Starting out a daycare business can be stressful enough, but if you know what you’re doing, you can make it. Starting out any kind of business can be tricky if you have no idea, but let me stop you there. Check these following information out now.

10+ Child Care Business Plan Examples

1. child care business plan template.

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What Is a Child Care Business Plan?

To start off let’s define what a business plan is. As we know a business plan is a well written document that shows a good bird’s eye view of your future business . Whether your business is on child care, you must always know that there are certain risks to any business without a thought out business plan. A child care business plan is basically what it sounds like. A business plan that caters to your needs of making a business in child care. Your business plan is important as it outlines the whole business you plan on doing, the goal, the objectives and the entire view of how you want your business to be years from today. A child care business plan is a document that shows you your entire outcome of how you picture your business to be. Of course, rather than simply depending on your business plan, you must also have a back up plan .

How to Write a Child Care Business Plan?

You are almost there . All you need now is just a good start on how to write your own business plan that caters to your business. A child care business plan should not be too difficult to understand nor too vague that you may get yourself too confused. Let’s begin.

1. Do Your Research

Before you do anything like making a business plan, the best option to do first is to do your research . Do your research about your future business. Doing research about your business will not only help you understand what you plan on doing, but it would also help if you know every single detail about it. Doing a business plan without having the slightest idea as to what you are doing or what you plan on doing is simply like a blind person leading another blind person. Too much risk.

2. Know Your Vision and Mission

Next thing to do is to write out your vision and mission statement . When you write your vision statement make sure that you are writing what you want to see in your business. The goals, the step by step process. Your vision statement should be a part of your business plan as this helps you see what you wish to see when you begin with your business. The same goes for your mission statement. The difference between your mission statement and your vision statement is your vision gives you a point of view. Your mission statement should be the action in which you tell your clients as to what your business is about.

3. What Is Your Business About

The third on your list should be understanding what your business is about. For you to be able to get a good view of it, you must define what you offer. Define what you want to do with your business in your business plan. Describe in full detail the things that you offer, the things that you can do and the other things that can help you with growing your business. There are a lot of competitions out there, how will you do it? How will you make your business shine? These are just a few sample questions you can ask yourself when you write your business description in your business plan.

4. Search for the Right Location

It goes without saying that the right location for a business also matters. That whether or not your business is a small one or a large one, your location should also be important. Where you place your business is crucial as it should not be difficult for customers to look for your business. Since you plan out a child care business, think of the best locations that would cater to this type of need. Remember the better the location, the better for your business. You can also use the idea for flyers when you start your business.

5. Plan For It

Last but not the least, plan for everything you have written to make it come true. Of course there are a lot of paperwork that you have to go through to start. But that is part of the business. Plan in detail and do it step by step. That way the lesser the risks, the better.

Why is a business plan so important?

A business plan is like an outline for you. A road map to attaining the goal that is your business. A business plan’s purpose is to guide you to the right direction when it comes to handling businesses. A business without a plan is set to fail.

What should be avoided when writing a business plan?

There are a lot of things that could be avoided when you plan on writing a business plan. One of which is the risk. Do not forget to write up a back up plan. It is understandable that writing out back up plans may let you think that your first and original plan would fail, but there is no harm in being prepared.

How does one avoid risks when making a business work?

It goes without saying, we are not always able to avoid risks when doing businesses, but being able to write a business plan will help lessen the risks.

Remember, when you plan out a business for yourself or for someone, whether it be a small business or a large business, the best thing you can do is to write yourself a business plan.

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Childcare workers to get wage boost in budget as Australia battles staff shortages

Exclusive: Move is intended to prevent workers from leaving for other sectors, including aged care, where wages were recently increased

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The Albanese government is in the final stages of signing off on a boost to childcare workers wages as a centrepiece of next month’s budget.

Guardian Australia understands the budget razor gang, the expenditure review committee, has considered a number of proposals on the sector-wide wage increase, which would see the government cover a significant pay rise for early childcare educators.

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It is yet to sign off on the final proposal, but raising wages in the childcare sector has been identified as a priority as the government attempts to stem the flow of workers leaving the sector, including to work in aged care, where wages were recently increased.

The united workers union is using new multi-employer bargaining laws to seek a 25% pay rise through the Fair Work Commission, in line with the increase aged care workers received in what was considered a new benchmark for underpaid, mostly feminised industries.

The aged care decision saw workers receive a 15% increase upfront, with the total staggered over a number of years.

Childcare providers are not opposed to a pay increase, but want the government to fund it.

Education minister Jason Clare did not deny the budget proposal and said the bargaining process in the fair work commission was ongoing.

“There aren’t many jobs more important than what our early childhood educators and teachers do,” he said.

“We have changed the law to make it easier for childcare workers to get a pay rise.

“Unions and providers are using the laws we passed and we won’t pre-empt the outcome of any bargaining process.”

While the final childcare wage proposal is still being finalised, key consideration is being given to how to fund the wage increase without it being used to bolster centre profits, after much of the increased subsidy for parents was absorbed by higher fees.

The government’s plans for a boost to childcare workers is part of its push to have early childhood education considered a universal right for Australian children, which would see it treated in the same way as school or healthcare.

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One of the remaining issues the ERC is considering is the fate of the activity test, which sets out how much subsidy a parent or carer can receive based on how many hours they work.

The government is still considering whether it scraps the test as part of its childcare budget package with a delayed implementation date.

Advocates, such as the chief executive of The Parenthood, Georgie Dent, said the activity test remained one of the biggest barriers to universality.

“In a universal system, a child’s entitlement to attend quality early childhood education and care should sit with the child, not the parent’s postcode, income or employment activity.

“In that regard, the activity test is counter to a universal system which is why we have been urging the government to remove this test. Everyone from the Productivity Commission to the ACCC to the women’s economic equality taskforce in successive reports have highlighted the flaws of this policy .”

• Australian budget 2024
• Childcare Australia
• Australian politics

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