The daycare center launch plan
Every step from deciding to opening, in the order it happens, shaped to your situation, with your own numbers beside it. About 47 steps in 8 phases, 21 of them specific to a daycare center. Free to read; ticking steps off and putting in your own numbers come with membership.
The plan47 steps
- 01Not started0/6Fold
Decide with the numbersa week or two
Before a dollar is spent. Most expensive mistakes happen here, and this phase costs nothing.
A daycare earns recurring tuition per enrolled child, priced by age band, with cheap add-on layered on an already-staffed building.
Typical for one unit is $400,000 to $1,800,000 a year; the owner keeps 20 to 27% of it before paying themselves. If that band does not cover what you need, that is the signal to pause and look again.
~50% survive 5 years. Roughly half of all new U.S. employer businesses are still operating after five years.
Twelve questions about your money, time, experience and temperament, scored. Then the 3 questions this business asks of its owner, about the hours and the work. Answer both before you spend a dollar.
Rule of thumb: buy for an existing license, enrollment, and a proven age mix. Answer it in your situation above and the plan reshapes.
Customers, prices, rent, staff pay, what it costs to open. We filled in typical numbers; change what you know and everything on this page follows.
- 02Not started0/5Open
Plan the moneya week
What it costs to open, where the money comes from, and the cushion that keeps you alive until the business pays for itself.
Opening a licensed center is a real build: most of the money goes into turning a building into classrooms the state will license, the playground and the furniture, before the first family enrolls.
The itemized cost to open9 lines
- Interior build-out to licensing code: $30,000 to $389,000The biggest swing: a former center needs paint and flooring, while an office or retail shell needs plumbing, exits and often a sprinkler for infant rooms (a...
- Outdoor playground (structures, surfacing, fencing): $15,000 to $122,000
- Classroom furniture, cribs, cots, curriculum & office: $39,100 to $132,000About $6k to $20k per classroom for furniture and learning centers
- Kitchen & laundry equipment: $5,600 to $26,000
- Secure entry, cameras, tablets & office tech: $4,300 to $18,000
- Signage & opening supplies: $5,000 to $24,000
- Architect, permits, license & staff checks: $14,300 to $80,300
- Insurance, deposits, legal & enrollment marketing: $19,000 to $66,000Includes a lease deposit of one to two months of rent
- Initial working capital: $65,000 to $250,000Payroll and rent while enrollment fills; centers staff to ratio from the first day, so this runs high.
Costs start on day one; customers take months. Map the first twelve months of cash so the business does not run out of money while it is getting going.
The business has to earn your pay like any other bill. Set it in your numbers and watch the month it move.
How deals in this business are financed5 lines
- SBA 7(a) loan (Up to $5M · up to 10 yr (25 with real estate) · 75-85% government-guaranteed)The workhorse for building out or buying a center: it funds construction, furniture, the playground and working capital.
- SBA 504 loan (Up to 25 yr · real estate & long-life equipment)For owners buying or building the center's building.
- Equipment financing (Secured by the equipment · 3-7 yr)Finance the playground, kitchen and furniture on their own, secured by the equipment, to keep cash for payroll during the enrollment ramp.
- Seller financing (Often 5-20% of price · 3-7 yr)Common when buying a center: the seller carries a note for part of the price, which keeps them invested in a smooth handover of families and staff and can count toward your...
- State start-up and quality grants (Varies by state · usually tied to licensing and subsidy participation)Many states fund childcare start-up, expansion or quality grants with federal child care dollars.
Most new shops pair an with 10 to 20% of your own cash. Know the monthly payment before you look at a single space.
Before you shop. A lender tells you what they would fund, what they need from you (credit, your cash in, a plan with numbers), and a pre-qualification letter makes a landlord or a seller take you seriously.
- 03Not started0/4Open
Set up the companya day or two
A day of paperwork, and it has to come before the space: a lease, a loan application and every permit are in the company’s name.
Your state’s business name search, the trademark register, and the domain, before the name is on a sign, a van, or a lease.
A , an , and the S-corporation election each change what you keep and what you are exposed to. Compare them with the numbers, confirm with a CPA and an attorney, then file with your state.
After:The is free from the IRS in minutes once the company exists. The bank account needs both. Keep business money separate from day one.
After:Pick the accounting software and connect the bank account now, so every cost of opening is captured and the numbers you later are real.
- 04Not started0/5Open
Find and secure the spaceone to three months
Daycares draw from a tight radius around homes and commutes.
What decides it for this business: young-family density, commute & convenience, license-able building, competition & waitlists, demographics & income.
One call to the planning desk with the address: is this use allowed there, and what will it take (, permits, fire sign-off)? A space that needs a change of use can add months.
Rent, free months for the , who pays for what, the and the renewals, subject to financing and permits. The lender needs this letter or a draft lease to take your application.
After: ,, renewal options, increase caps, what the landlord adds on top of rent, and what happens if you have to leave. For a location business the lease is part of the purchase price.
After:at minimum; property, workers’ compensation and the rest as the business needs. The landlord asks for a certificate at signing and the lender at closing.
- 05Not started0/2Open
Get the loanfour to eight weeks
Four to eight weeks with an SBA lender, longer if the file is incomplete. Everything else waits on this, so send a complete file.
Your plan with numbers (download it as a PDF from this page), the company’s papers, the or draft lease, the and equipment quotes, your personal financial statement, and proof of the cash you put in.
After:The lender approves against the ; you sign the lease once approved; the loan closes against the signed lease and the insurance certificate. Ask for the to match the or longer.
After:
- 06Not started0/12Open
Permits and the build-outone to three months
Childcare is licensed by each state, and the license sets how many children you may enroll, by age, from the square footage of your rooms and yard and the staff you keep at ratio.
Bind the policies you had quoted before a contractor, a vehicle or a customer is in play. Keep the certificates; the landlord, the lender and the city will ask.
After:Permits for the , closed out by inspection, and a for an educational or childcare use.
After:Most cities approve exterior signs separately; signs take weeks to make. Order early.
Entity filing, local business license, federal , state withholding and unemployment accounts, and once you hire.
With your state, before the first taxable sale. Usually free and online; check your state.
Application, orientation, floor plan review and a pre-licensing inspection.
Confirmation that a childcare center is allowed at the address; many zones require a conditional or special use permit and a public hearing.
Fingerprint-based criminal checks plus state child abuse and sex offender registry checks for every staff member, cleared before they work with children.
A director who meets the state's education and experience rules, and staff with pediatric first aid, CPR and health and safety training.
Enrollment in the USDA Child and Adult Care Food Program (CACFP) to be reimbursed for meals, and a provider agreement to accept state childcare subsidy.
Exits, alarms, extinguishers, evacuation cribs and the fire drill plan, inspected before the license is issued and again each year.
After:Permits for the , closed out by inspection, and a for an educational or childcare use.
After:
- 07Not started0/8Open
Set up to runduring the build
During the build, so the business runs from day one: the systems, the prices, the people and the routine.
Bills tuition by age band, processes subsidy and voucher claims, tracks enrollment and ratios, and manages the waitlist, which is the core of a recurring...
Logs drop-off and pick-up, feeds attendance to the CACFP food program, and keeps every room staffed to its legal age-band ratio.
See the price the the business needs implies, then check it against what the market pays.
Entity filing, local business license, federal , state withholding and unemployment accounts, and once you hire.
After:Wages are the start: , insurance, training time and the hours you stop billing. Owners usually post the jobs a month out and hire two to four weeks before opening so training happens before the doors open.
Daily: Open, staff every room to its age-band ratio (and cover a call-out... Weekly: Review enrollment and the waitlist by age band, fill staffing gaps,... Monthly: Track against licensed capacity by room, chase subsidy and...
Opening, closing, the sale, the complaint, the cash. One page each. This is the manual a franchise would have sold you.
Free, and it is how most people will find you. Address, hours, photos and the menu or price list, live before opening day; then the sign, the soft opening and the first regulars.
- 08Not started0/5Open
Open and measurethe first ninety days
You own it. Now run it on the numbers.
Friends, neighbors and a short menu or list. Find the problems while the room is forgiving.
Enter the real numbers and see every cost line against the for this business.
Teacher & ratios; Rent & ; Turnover, compliance & insurance.
Growth consumes cash before it produces it. Find the rate your own cash funds before you push.
A full, licensed center is a sellable asset.