Do you want to know exactly how much it cost to start a daycare center? If YES, here is a detailed cost analysis for starting a daycare business and raising finance.
Having provided you with a:
- Daycare Industry Overview
- Market Research and Feasibility
- Daycare Business Plan
- Daycare Name ideas
- Daycare Licenses and Permits
- Daycare Marketing Plan
- Cost of Starting a Daycare
- Daycare Marketing ideas
We will consider how much it cost to start a daycare business from scratch including the operating costs.
It is okay to want to start your day care business from somewhere around the house (small scale). You may also choose to have a facility and all that. Whatever the case maybe, it is vital to state that it would require some money. Here is a cost analysis for what it entails to start one.
How Much Does It Cost to Starting a Daycare?
- The Total Fee for Registering the Business in America: $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling $1,300.
- Marketing promotion expenses for the grand opening in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3, 580.
- Cost for hiring Consultant – $2,500.
- Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
- Cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $52,800.
- Cost for building remodeling – $25,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500).
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
- The cost for Start-up inventory – $16,027
- The cost for office supplies (one month) – $287
- Storage hardware (bins, beddings, utensil rack, shelves, food case) – $3,720
- Cost for serving area equipment (plates, glasses, flatware) – $3,000
- Cost for store equipment (cash register, security, ventilation, signage) – $13,750
- Office equipment and furniture – $3,600
- The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al): $4,000.
- The cost of Launching a Website: $600
- The cost for our opening party: $5,000
- Miscellaneous: $2,500
You would need an estimate of about $100,000 to successfully set up your day care business. The amount includes the salary of all employees and the CEO (Owner) for 3 months on a medium scale. If you are looking at starting this business on a large scale, then you can be sure that the amount would be doubled.
Financing your Daycare Business
There are different ways through which you can raise startup funds for your day care business. For some raising capital can be as easy as breeze. On the other hand, others may have to struggle in order to raise it. Whatever side of the divide you may find yourself, the paramount thing is to explore some options that can help you raise your funds.
You can be lucky to have had a good saving culture. As such, you can start a day care business through funding from your savings. There is also the option of through bank loans. There are loads of banks that are interested in funding businesses; as such you may want to capitalize on it by seeking a loan. There are some banks that require collateral, whilst there are some that do not need one.
There is also the option of angel investors, these investors are all and about looking for businesses with wonderful business plans to invest in. If you do have a great business plan that is well crafted, then you may decide to be on the lookout for angel investors who will be ready to finance your business.
However, there is one overlooked option you can consider as a daycare owner and that is government grants. Government grants are a little bit relaxed with respect to requirements and repayment structure; especially when compared to loans. If you are to consider grants, here is how to do it the right way:
5 Steps to Getting Government Grant for a Daycare Center
If you reside in the United States, some of the various grants you can access are Community Development Block Grant, Community Facilities Grant Program, Child Care Access Grant and Childcare Development Block Grant.
- Register Your Daycare, Obtain Your Business License and Ensure Your Pay Your Tax
- Study the Various Grants Available To Daycare Business Owners
- Draft a Good Business Plan and Proposal
- Position Your Daycare Center to Attract Grants
- Make Use of Loans and Grants Tools on the Internet
For whatever option you find suitable as the way to raise funds for your day care business, it is very needful that you have a well-structured plan as to how to pay back. That is assuming you are loaning some funds.