How to Write a Business Plan for Your Home-Based Daycare Center

Updated November 21, 2016

Business plans are an essential piece of any business as they provide a road map to guide business owners through challenging times and help them reach their goals as quickly as possible. Business plans help define the path a business will take and are required if you hope to obtain outside funding. Even if you aren't looking for funding, a solid business plan can help you stay on track and keep your business moving forward.

Write a general description of your day care centre. Answer the following questions: What hours will you be open? What are your strengths that will set you apart from the competition (such as a pet-free environment, non-smoker, etc.)? What experience and skills do you have to offer (for example, if you were a former schoolteacher or otherwise formally trained to work with children)?

Describe your services in greater detail. What is your pricing schedule? Will you charge by the hour, by the day, by the week? What will you offer in terms of meals, activities, etc.? Do you accept children of all ages or are there limitations (such as no younger than 6 weeks, no older than 12 years, etc.)?

Do your homework. The next section relies on market research, so you'll need to know a bit about the childcare industry in your region. You'll want to look into such questions as: What is the total amount of the potential clients in your market? What is the demand for other day care centres in your area? (If other centres are struggling to find clients, the demand might not be high enough in your locale. However, if there are a lot of families in your area and few to no day care centres, you may be filling a strong need as some parents prefer day care centres close to their homes.) What are the market trends? (If you live in a neighbourhood with a lot of newly married, young couples, chances are good that there will be a high demand in the years to come for a nearby day care centre.) Who are your competitors? How will you differentiate your childcare services from the pack?

Create your operational plan. The next section will detail such topics as legal, personnel and credit policies. Legal includes any discussion of insurance, licensing, zoning or permit requirements to operate a home-based childcare centre. Personnel includes any employees you might need to hire in your home-based childcare centre, how much (and how often) you will pay them and a description of their jobs. Credit policies includes how you will bill your customers. (Will you extend them credit? Will they pay weekly or monthly? If they get behind on payments, what steps will you take?)

Lay out your finances. You'll need to include a personal financial statement that shows your current finances, along with an accounting of your start-up expenses and any funds you expect to receive to help with those initial expenses. You'll also need a 12-month profit and loss projection, which is basically your best estimate of your company's income and expenses over the next year. This will be based largely on your market research and known expenses.

Include a marketing plan. Although most day care centres report enrolment rates of 90 per cent of their capacity within the first six months of opening their doors, according to, you can have even greater--and quicker--success if you market your new business. A few marketing techniques you might highlight in the marketing section of your business plan are newsletter advertising, door-to-door distribution of flyers or signs placed in high-traffic areas.


A business plan can be as simple or as complex as you need it to be. Many home-based day care centres can get by with a basic, one- or two-page business plan (as long as you don't need to present the plan for funding). The key is to get something down on paper, and don't let the process overwhelm you.

Things You'll Need

  • Computer
  • Word processing software
Cite this Article A tool to create a citation to reference this article Cite this Article

About the Author