Daycare business plan template

How a lender reads a childcare plan

The SBA describes two formats. The traditional plan is the long one, and it is the one the SBA says "lenders and investors commonly request." Its usual sections run from the executive summary through market analysis, organization, the service, marketing, the funding request and financial projections. The template above follows that order and adds the two things a childcare plan cannot skip: the licensing path and a staffing plan built from ratios.

On the money side, the SBA asks for a five-year outlook and says the first year should be more specific, in quarterly or even monthly projections, matched to the funding request. That is why section 9 is a month-by-month table. Years two to five can be one line each once the first year is solid.

A lender who has seen childcare plans before goes straight to three numbers. The first is the occupancy you assume, and how fast you get there. The second is payroll as a share of revenue, because labor is the biggest line in any center; our guide to daycare profit margins walks through why. The third is the lowest point in your cumulative cash, because that is the money you need to have on day one on top of the build-out.

The occupancy and break-even logic

The SBA's break-even formula is fixed costs divided by price minus variable cost. In a center the unit is a filled place, but the formula needs one adjustment: teachers are not a smooth variable cost. A room at 1:4 needs one teacher for four infants and a second the moment the fifth arrives. Payroll moves in steps, and the steps land as rooms fill.

You can see it in the example plan. Between months 3 and 4 every room crosses its first ratio line, ratio staff double from four to eight, and the monthly loss gets bigger even though enrollment went up.

The template's own pre-filled example, not a benchmark. Change any input above and the plan recalculates.

The example breaks even at 83% full and bottoms out about $49,000 below zero in month 6. Add the startup budget and that is the cash the plan has to raise. Three tools go deeper on each piece: the staff-to-child ratio calculator for each room's head count, the tuition rate calculator to work a room's price back from its cost, and the daycare budget template once you are open and tracking real months.

What the licensor needs from the same plan

Licensing is set by each state and territory, which writes the minimum health and safety rules a program must meet to operate legally. There is no federal staff-to-child ratio, so the ratios in section 5 are stand-ins until you type in your state's chart. The licensor will check the same rooms, ages and capacity your lender sees, so keep one version of them. Our daycare licensing requirements guide covers what the inspection looks at.

Funding sources that fit a small center

Most small centers combine three things: the owner's own money, a loan, and sometimes a landlord build-out allowance. The SBA's microloan program lends up to $50,000 through nonprofit intermediary lenders, names certain not-for-profit childcare centers as eligible, and reports an average loan of about $13,000. Microloan money cannot pay off existing debt or buy real estate. Larger projects, such as buying or improving a building, go to the 7(a) program, the SBA's main guaranteed loan, which goes up to $5 million.

Put the food program in revenue, not in funding: CACFP reimburses you per meal served, so it arrives after the meals, not before you open. Our CACFP reimbursement rates guide has the current figures. For the one-time side, the startup cost calculator gives a quick total before you itemize section 8.

A home daycare business plan

The same template works for a family child care home. Delete all but one room in section 5, enter your state's home ratio and group size, set non-ratio staff to zero, and replace rent with the share of household costs the business pays. The plan will be shorter, and a home lender cares less about the ramp, but the break-even line matters just as much. If you have not settled the order of steps yet, start with how to start a daycare and come back here to write it down.