Day Care Start Up Budget

Where to Begin

Offering an in-home babysitting service is a good place to start a day care business. It opens the door for you to build a good reputation as a quality caregiver. As your reputation grows, demand for your services will expand too. As your business grows, build upon your progressive successes to help save toward starting your own business outside the home.

Once your successful babysitting service has outgrown your home, look for a facility to lease as well as the staff necessary to meet state and local requirements. Requirements vary from state to state but may include:

• A minimum square footage per child
• Hot meals
• Licensed teacher for every 15-20 children (depending on ages)
• Licensed nurse on premises

Day Care Start Up Budget

As you expand your business to function outside the home, it's important to look at the big picture as you put together your day care start up budget. Consider the following budget items:

Rent

When you first move from your home to another facility, you may want to talk with local churches, community centers and other civic facilities to see if it would be possible for you to operate a day care within their facilities. Another option is to find a vacant house with a large fenced yard in an area zoned to allow commercial use. However, when looking for the right location, make sure that it has adequate parking.

Equipment and Furniture

Appropriate equipment should be purchased for durability, versatility and overall attractiveness. A variety of day care equipment is needed to run a day care business. Indoors, items like cubbies and shelves are needed to keep supplies organized. When purchasing day care equipment, be sure to purchase durable equipment that's versatile and yet attractive. Depending on the ages of the children in your care, you'll need a range of items like sleeping mats as well as infant and toddler feeding stations.

Other equipment includes:

• Classroom tables
• Playground equipment
• Cribs
• Activity centers
• Chairs
• Special needs equipment
• Books
• Teaching supplies
• Toys

Fixtures and Renovations

Finding the right environment for a day care center takes planning and research. As you pull together your start up budget, plan a facility that facilitates mainstreaming and promotes sanitation. The building you choose should be evaluated for adequate heat and cooling, to offer a healthy, nurturing atmosphere. From a budgeting point of view, you want to find a building that's energy-efficient and cost-effective.

Be sure to have the building under consideration inspected. Is the structure sound? Have the following items checked:

• Roof
• Electrical wiring
• Plumbing
• Heating/cooling
• Exterior and interior finishes

Office Supplies

It's easy to overlook simple items like office supplies when putting together your day care start up budget, but without them your business cannot function. Make a list of items you'll need to estimate the cost.

Telephone and Utilities

When starting a business, deposits are often required for telephone and other utilities. After enough time, these deposits are usually returned, but on the front end, these amounts need to be added to your start up budget.

Printing and Copying

Check with the printing and office supply stores in your area to get an idea the cost to meet your business printing and copying needs.

Postage

Postage is necessary for sending out advertising, billing, etc.

Advertising

Your mode of advertising will depend on your location. If you started your business as a babysitting service and expanded it to a suitable facility, word of mouth will spread. However, to establish a profitable business, you'll want to reach new customers. Local newspapers, along with online sources provide advertising options, but no matter what advertising mode you decide to use, figure the price into your budget.

Licenses and Permits

Licensing and permitting for day care operations vary from state to state and even county to county. You'll want to contact your city's business license department before renting your facility. Find out what you need for procuring a business license and what it costs.

Insurance

Not all insurance companies are equal. Choose a company with a high rating. When it comes to insurance, the best price does not always provide the best coverage. When getting prices for insurance find a policy that provides liability coverage, which insures you against such things like sexual abuse liability and child care providers.

Loan Payments

Most likely, you'll need a loan to start up your business. While getting financial help can eliminate a lot of stress, be sure to include your loan payments in your budget.

Legal and Accounting Consulting Fees

Just like any business, your day care business needs legal and accounting consulting services. Accounting can be taken care of in-house. Research to find day care accounting software to help with this need.

Legal services, however, need to be provided by a professional. Look for a lawyer that specialized in the services you'll need.

Maintenance

Day care facilities are heavily used. Equipment and the building must be well-maintained for sanitary and safety reasons.

Salary

Your salary and that of your staff need to be included in your budget. Don't forget to include the cost of employer paid taxes, employee benefits, and the prospect of annual cost of living raises. After all, it is more cost effective to pay your employees well than it is to deal with the cost of employee turnover.

Unanticipated and Miscellaneous Expenses

Not everything can be planned down to every detail. So include a category for unanticipated expenses within your budget.