Opening A New Child Care Center

You've envisioned opening a new child care center or expanding your current one, but you know it's not as easy as renting a building and putting up a sign. Kaplan has all of the tools you need to make your vision a reality. From classroom design to turnkey delivery and setup services, Kaplan has helped early childhood educators open hundreds of new centers all across the country.

Vision

Learn how to open or expand a childcare center with Kaplan's tips for developing a business plan and for designing and planning your center and classrooms. You can also choose to use our K-Truck Delivery service to help you set up your classrooms or use our myKaplan customized online procurement solution to easily order future supplies for your center.

What to Expect When Opening or Expanding a New Center

Opening or expanding a child care center is beneficial to both you and your community, but establishing a successful child care program takes money, time, organization, and planning. There are three important questions you should ask yourself when opening a child care center. Take your time to answer these questions carefully because your answers will guide your thinking as you develop a business plan and make decisions for your center.

  1. What is your reasoning for opening or expanding a child care center?
  2. What are your strengths and weaknesses in regards to business knowledge and early childhood education and child care?
  3. What do you know about the child care system in your community?

If you have strengths in these areas, you have a good start toward opening your program. Talking to other professionals in the community may help you gain more knowledge about certain aspects of the child care business, however, if you do not have a lot of knowledge in these areas. As the owner and operator of a child care center, it is your responsibility to ensure that you have a working knowledge of the business and program aspects of a successful child care program.

Once you have ensured that you have the right skills and training for starting or expanding a child care center, there are several factors you need to consider:

  • Purpose, Goals, & Philosophy – The purpose of your program helps establish why you want to operate a child care center, and the goals you establish guide your program towards the results you wish to accomplish. The philosophy of your program outlines how you will operate your program based on your purpose and goals.
  • Center Name – The name of your center will become your trademark to the community and should reflect your program's purpose. When brainstorming name ideas, remember that you want families and the surrounding community to recognize your child care center by a name that will hold a reputation of a high quality program and establishment.
  • Legal Determination – The type of program you decide to create will need to be identified and legally recognized as either a nonprofit or proprietary program. The legal determination of your program will likely influence your budget and other aspects of your business plan, especially if you need to account for government aid or grants.

Now that you know more about what to expect when opening or expanding a center, the next step is to start researching and developing your business plan. Research is a vital part of successfully opening or expanding a child care center. Without proper research, you could choose the wrong location, violate regulations, or purchase inadequate materials for your center. Budgeting, regulation and licensing, and location should all be factors that are researched thoroughly before developing your business plan.

Research & Planning

The comprehensive business plan you create will be the most useful tool in helping you navigate the process of opening or expanding your center. A good business plan will help you gain financial support from lenders and investors and can also help you avoid disastrous errors in the planning and implementation stages of your center's development. Before you create your business plan, however, you must extensively research how to finance your business, what regulations and licensing applies to your center, the best locations to build or rent, and how to market your child care program. Kaplan Early Learning Company has provided tips and resources for how to best research each of these factors and then use the information you find to create a valuable and comprehensive business plan for your center.

Budgeting

Financing your business and creating an efficient budget is one of the most important steps in the process of opening or expanding your child care center. Many child care centers fail simply because of poor financial management. To help ensure the success of your center, you need to provide a realistic budget that includes both actual estimated expenses and income. It is best to prepare both a start-up budget and an operating budget if you are opening a new center. Having both budgets will give you a better idea of where you are getting funding to open your center and what you will spend on expenses now and in the future. These budgets will also show whether your child care center's projected income will meet its expenses, which is the biggest indicator in the success of your business.

Researching the costs of equipment, site preparation, and the other aspects that come with opening or expanding a new child care center will help you develop a realistic budget. There are certain costs you should research and include for each type of budget:

  • Start-Up Budget – The start-up budget typically includes one-time costs, such as site preparation, major equipment, renovation, down payments, utility deposits, and at least two to three months of operating costs. Finding out what it cost other child care centers in the area to open over the past two years can also give you a good starting point for determining your start-up budget.
  • Operating Budget – The operating budget shows the expenses you will incur and how you will meet those expenses monthly or annually. Costs included in this budget usually include utility bills, personnel, supplies, food, occupancy payments, advertising, and licensing fees.

Keep in mind that this is a preliminary list of expenses. You should research the different expenses that will apply to your center for a more comprehensive budget. Any government aid you may receive will also affect your budget.

Your child care center's main source of income will be the fees you charge. A cash flow sheet can help you determine if the income generated by fees will be enough to pay your monthly bills. Make sure your fees meet your costs and are reasonable enough that parents can afford to pay them. The budget for your center should also include fiscal policies, such as late fee payment policies or how often your staff is paid and parents are billed. An accountant or an accounting firm can also help you financially manage your center and perform audits to ensure the financial health of your child care center.

Child Care Regulations and Licensing

Knowing the regulations that will affect your child care center is essential throughout the process of opening or expanding your business. Keep in mind that licensing requirements vary in each state, so you need to do specific research about the requirements and regulations in the state in which you are opening or expanding. Zoning laws, health regulations, safety codes, and fire inspections may also be required by some cities and counties. Becoming familiar with the people who support and enforce the regulations in your community will make it easier to create your business plan and meet all requirements. There are several regulation resources you can use to ensure that your center does not violate any codes:

  • State/Local Regulations – Social Services or Health and Human Services offices should be able to give you information about local and state child care regulations. Another resource is your local child care resource and referral agency, which you can find on NACCRRA's website (www.naccrra.org).
  • Zoning Department – Zoning requirements vary extensively, so it is best to research them before determining the location for your center. Do not buy or lease any property until you have official approval from the local zoning department. If the property has not been approved, it can be very costly and time-consuming to have it approved. If you have not determined a location or do not have one in mind, contact your local zoning office or planning and community development to see if they have a listing of areas where child care centers are allowed.
  • Certificate of Occupancy – You will be required to have a Certificate of Occupancy for your center in most communities. Information about specific building requirements for child care facilities and occupancy permits is usually available at the county building department.
  • Local Fire Department – The local fire department can provide you a list of safety regulations and requirements for your child care center. They can also assist you with the required location of doors, the way doors should open, acceptable wall and floor coverings, evacuation plans, and appropriate fire extinguishing systems.
  • Health Department – Your local health department will govern the regulations your center must follow. The regulations are typically broad and provide guidelines for pest control, bathrooms, ventilation, sanitation, kitchen, and food preparation.
  • Insurance Coverage – Child care centers require several types of insurance coverage, such as general liability, staff medical benefits, worker's compensation, and theft and fire insurance among others. Call a few insurance companies to discuss what policies and plans they recommend and offer child care centers. Be sure to get the quotes in writing so you are able to compare policies.
  • Playground Regulations – The American Society for Testing and Materials (ASTM) and the Consumer Product Safety Commission (CPSC) both have guidelines for playground safety. Kaplan can assist you in planning and designing your playground to meet ASTM/CPSC standards. Visit our Playground section of the website for more information about playground regulations.
  • Americans with Disabilities Act (ADA) – Whether you are opening a new center or expanding one, you must make sure your facility meets ADA's accessibility requirements for individuals with disabilities. If you are building or remodeling a playground, the ADA also has guidelines for playground accessibility.

Your developer or contractor can also facilitate zoning, fire, health, building code inspections, and approvals.

Location

Researching and identifying the location of your center is the next step you need to complete once you have a working knowledge of child care regulations and licensing, zoning laws, and the requirements for your facility. Your program's success will be based largely on its location because parents will not find you if you do not have an accessible location and a good, consistent marketing plan. Consider property values, incomes, maturity of community, demographics, and commercial/residential development when you are researching locations for your center. The local Chamber of Commerce, Social Services office, and Board of Education are valuable community resources that can help you determine the need and market for your child care program.

There are several guidelines to consider when you are selecting a site for your center:

  • Lot size
  • Primary access to the site
  • Slope of property (can affect cost of site preparation)
  • Drainage (can affect the playground area)
  • Results of environmental studies and soil samples
  • Economics of property and its development
  • Setback requirements
  • Attitude of surrounding neighborhood

Kaplan's Location Guidelines and Worksheet is another great resource that can help you evaluate the locations you are considering for your child care center.

Marketing Plan

Your marketing plan will also determine whether your child care center succeeds or fails. A good marketing plan will help you achieve your goal of selling child care to parents. Knowing your competition and what your customers want or need will help ensure that you develop a comprehensive marketing strategy. There are five factors you should consider when developing your marketing strategy:

  1. Services – The description of your center's services should be informative and concise so it can be used to its best advantage in advertisements.
  2. Price – Be sure that the price of your service and the associated fees are competitive with other centers in your market area.
  3. Location – Describe your location and any advantages it may have, such as easy access or good parking.
  4. Promotion – There are several ways you can promote your child care center, but the type of advertising medium does affect the cost and your overall budget.
  5. Persuasion – Research how you can successfully sell your child care center and program to parents and the surrounding community.

Once you have considered these five factors and selected your advertising medium, it is important to ensure that your advertisement contains the following information about the services your center will provide:

  • Name of the center, address, and contact information
  • Hours of operation
  • Fees charged
  • Program description and qualifications of the staff
  • Age range of children who will be accepted
  • Date you plan to open or information about your center's expansion

Keep in mind that you should start advertising and taking applications three to four months before your new center or expansion opens.

Business Plan Outline

Once you have finalized your vision for your child care program, selected locations for consideration, researched the child care market in your community, and developed a general marketing plan, it is time for you to take all of the information you gathered and put it into a business plan. Your business plan will help you raise capital, maintain focus on the childcare market in your community, and create a document that your program can follow. Your plan must illustrate how financial investments will be used and the stability of your child care center as a business. The plan you create should be concise, detailed, and accurate. An accountant can help you with the financial component of your business plan and an early childhood/child care specialist can help with the program component. The length of your business plan will depend on the extent of your research and how much money you are asking people to invest, but it should be at least five to ten pages long.

You can use the following outline as a guide to developing the concept of your business plan.

Cover Page

Your cover page should include your child care center name, your name and contact information, the date, and the name of the institution or investor if you are submitting this proposal for financial consideration.

Table of Contents

The table of contents page should include section titles I – VIII with page numbers to indicate their location in the document. Be sure to add any additional sections you include in the document to the table of contents as well.

  • Executive Summary
  • Child Care Market Analysis
  • Program Summary
  • Strategic Planning
    • Operations
    • Marketing and Recruitment
  • Management and Staffing
  • Financial Operations and Projections
  • Key Success Factors
  • Appendix

Executive Summary

The executive summary gives the total picture of your child care center by highlighting your center's mission, the uniqueness of your program, program services, future projections, capital and other resource needs, and a time frame for repaying loans or investors. The executive summary is a quick survey format of the rest of the document demonstrating that you are able to maintain a clear focus on your goals, what you want, and the direction of your child care center. Given its comprehensive nature, it may be easier to write your executive summary after you have finished the complete plan.

Child Care Market Analysis

This section should describe the child care market in your community and show how your program will fit into that market:

  • Profile the child care community and indicate growth potential
  • Give a geographic scope of your child care center and include size and population
  • Clearly state how your child care center meets the quality demands for child care in your community
  • Use graphs and charts to illustrate demographics and growth potential

Be sure to back up your analysis with the facts you learned while researching your local child care market and potential locations.

Program Summary

Begin the description of your program with the center's philosophy and goals and then include other important details, such as:

  • Describing the program
    • Description of children and families to be served
    • Daily program description and activities
    • Highlight how facility exceeds minimum health and safety regulations
    • Describe services available to families and cost benefits
    • Explain any special facility features and support services
    • Highlight any safety policies, procedures, or handbooks
  • Legal form of company
  • Lease/land terms of agreement
  • Enrollment capacity and marketing plan for enrollment
  • Special facility features and support services

Strategic Planning

You should describe the process you will go through in opening your center and establishing its operational procedures in this section. Your marketing and recruitment procedures should also be included in addition to the following components:

  • Planning and a timeline for opening your program
  • Highlight your admission and policies handbook
  • Marketing and advertising plan
  • Include the center's start-up budget and source of funds
  • Initial and staggered enrollment figures accompanied by expenses and revenue
  • Budget projections and a timeline for self-supporting program
  • Specific requests for funds and repay time frame

Be sure to give a realistic and obtainable goal that will show your capability of opening and operating a child care center.

Management and Staffing

The key to operating a successful program is having a proper staff, so it is important to establish how you will recruit and retain quality staff members:

  • Organizational structure
    • Organizational chart
    • Job descriptions
    • Recruitment practices
    • Wage and benefit packages
    • Training and retention program
  • Operating controls
  • Pricing strategies and revenue enhancements
  • External and internal marketing and sales
  • Loss prevention and insurance policies

If you are the director, be sure to provide information about your experiences, skills, and talents that qualify you for that position.

Financial Operations and Projections

This section is the heart of your business plan, especially if you are asking someone for funding. You may want to consider hiring an accountant to prepare or review your financial plan. The financial section of your business plan should include projections for profit and loss, cash flow, and a balance sheet along with these other important factors:

  • Project description
    • Facility description
    • Location
  • Project timeline
  • Project costs
    • Land
    • Building
    • Equipment start-up costs
  • Operating and overhead needs
  • Lease/land terms of agreement
  • Specific requests for funds and repayment time frame
  • Projections calculated on a monthly basis for the first three years
  • Yearly recap for the first three years
  • Cash flow statement

Key Success Factors

The conclusion is your final opportunity to sell your vision and convince the reader of your ability to open and manage a successful child care facility. Be sure to highlight a few areas that will be influential in the success of your business.

Appendix

The appendix will feature supplemental material, such as:

  • Supporting documents
  • Survey materials
  • Glossary of terms
  • Copies of contracts and agreements
  • References

As you develop and edit your business plan, keep in mind that your plan should be based on realistic goals and capabilities and should illustrate the uniqueness of your program. Your business plan should ultimately serve as a road map and provide ways to monitor your program for consistency.

The process of opening or expanding a child care center may seem overwhelming at this stage in the process, and it does require a great deal of dedication and hard work. The end result, however, is attainable if you do adequate research and use that research to make the best possible decisions for your business.

Visit NAEYC's website for more information about NAEYC Accreditation Standards and Criteria and their suggested practices. The U.S. Small Business Association's How to Start a Quality Child Care Business is also a great resource for researching and planning your child care center.

Design & Layout

Once you have developed your business plan and received any needed financial funding, Kaplan has a variety of resources available for the planning and design stages of your center's indoor and outdoor spaces. Contact your Kaplan representative for assistance in choosing equipment, materials, and curriculum and assessments for your child care program.

Building Design

The design of your child care facility should meet child care regulations and have appropriate environments for young children. Remodeling or building your facility can be very expensive if you ignore or overlook design requirements for child care centers, especially if you have to redo a section of the design before you can open or obtain proper licensing. Kaplan's Child Care Center Design Checklist can help you understand the types of space needed to care for children and will be a great tool to use as you work with your architect or contractor.

Classroom Design

Kaplan has a variety of correlations and classroom lists available for your convenience, and your Kaplan representative can also work with you to create your own unique classroom list. Manipulatives, art supplies, books, furniture, and technology are just a few of the items you will need to purchase for your classrooms.

Another great resource for planning and designing classrooms is our Child Care Classroom Design Checklist, which helps you understand the types of materials, equipment, and learning centers you will need to place in your program's classrooms.

You can also create your dream classroom with Kaplan's Classroom Floorplanner. Our free online tool can help you design a virtual classroom with the accurate dimensions of your space and show how your favorite Kaplan products will fit into the space. Kaplan also offers free sample floorplans designed to support ITERS/ECERS criteria and NAEYC accreditation standards.

Curricula, Assessments, & Resources

Your Kaplan representative can help you determine what classroom items you need based on curricula or can work with you on curriculum choices if you have not yet decided on which curricula to use at your center. Our Curricula at a Glance resource can help you quickly compare the features of each curriculum.

Playground Design

Your outdoor play area should be considered your outdoor classroom. Playing outdoors on a playground will help children develop physical creativity, problem-solving, and social skills. Kaplan can help you plan, design, and install the playground for your center. Visit the Playground section of our website for more information about the playground building process and our playground products and services.

Setup Services

Kaplan's K-Truck Delivery and Setup Team are educated and trained on how to properly set up classrooms to make the best learning environments for children. Our experienced delivery and installations teams will unload the K-Truck, place boxes organized by classroom in correct rooms, remove packaging, assemble furniture and larger products, and give a status report. Other services, such as freight, arranging classroom furniture, and putting product on shelves, can be arranged through your Kaplan representative.

Kaplan does K-Truck deliveries for new centers, old center renovations, classroom additions, churches, public schools, and more. You must have a Certificate of Occupancy and all required permits in place per local regulations for Kaplan to deliver products and enter the building. If you are considering using the K-Truck delivery service, please try to order at least 60 days in advance so we can best meet your needs. For more information about Kaplan's K-Truck Delivery and Setup Team, contact your local Kaplan representative.

Future Procurement

Once you have made your vision of a child care center a reality, you must consider the future procurement of materials and supplies for your center. Ordering school supplies may seem easy, but factors like multiple delivery locations, order approval channels, end-user access restrictions, and other company rules can make the ordering process difficult and time-consuming. Our goal at Kaplan is to streamline your supply procurement process without sacrificing quality or service.

myKaplan Platinum is Kaplan's customizable online procurement solution that makes it easy for you and your staff to place and manage orders. Individual teachers can place orders to be submitted for approval on myKaplan Platinum, and order reviewers can then approve, modify, or return those requests based upon tiered approval levels unique to your organization. You can also review and check the status of your orders and shipments at any time or view contract pricing and discounts if applicable. For more information or to have a myKaplan Platinum account established for your organization, contact your local Kaplan representative. We also offer basic myKaplan accounts that can be set up by anyone.