Do you want to start a kindergarten business? If YES, here is a complete guide to starting a kindergarten business with NO money and no experience.
Okay, so we have provided you an in-depth sample kindergarten business plan template. We also took it further by analyzing and drafting a sample kindergarten marketing plan backed up by actionable guerrilla marketing ideas for kindergarten companies. In this article, we will be considering all the requirements for starting a kindergarten business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Kindergarten Business?
Even though kindergartens started far back, it was not something that was readily implemented throughout the country, but today it is mandatory in some states in the United States. Some kindergartens in certain states don’t run for a full day as some run only half a day.
Even though kindergarten has been categorized together with preschool, they are actually not the same as the training and job description differ for the two.
For instance in the public school system, while a preschool teacher might need only a certificate in addition to a high school diploma; a kindergarten teacher will need to have at least a degree that focuses on early child education or child development coupled with the certificate before they can teach. One similar factor with a preschool and kindergarten is that majority of the teachers have been female right from way back.
Starting a Kindergarten Business – A Complete Guide
- Industry Overview
In 2015, there were close to 3.7 million children attending public kindergartens in the United States, while about 428,000 children attended private kindergartens. This has led to a lot of parents and guardians making extra struggles in order to be able to offer their children quality child care. Many workers earning low wages for instance cannot afford basic child care. Because parents were struggling to work long hours or two jobs, most prefer the full day kindergarten schools to that of the half day.
The level of education of the parents or guardians plays a very huge role in the enrolling of children in kindergartens especially for full-day programs. According to statistics, parents or guardians with the highest level of education choose to enroll their children in kindergartens offering full-day programs due to the fact that these parents have longer working hours and do not therefore have the time to take care of their children.
According to statistics by the U.S Bureau of Labor, it is expected that kindergartens and preschools will have the fastest employment growth rate before 2020 as this industry is one that has been growing tremendously throughout the years especially with the country facing economic recession and then recovering. Profitability has also improved for businesses in this industry after the recession. However, while there is increasing demand for child care services, operators must be willing to face regulations from the government, parents as well as the industry.
The number of establishments in this industry has improved tremendously over the past decades because in 2007, there were more than 766,000 kindergartens and preschools in comparison to that of 1987 where there were only 262,511. Demand in the industry received a tremendous boost particularly because more women were working than staying at home. This has changed the family structure as regards mothers caring for children from certain ages.
The industry is one that is fragmented as there are no companies with a major market share. This industry generates about $48 billion in revenue annually and between the periods of 2012 and 2017 has been having a 1.3 percent growth. Presently, there are more than 770,000 establishments in this industry employing more than 1.6 million people. In generating revenue, operators depend majorly on tuition fees paid by the parents and secondarily from government funding.
Even though the industry is one that grew tremendously in the 90s due to increasing awareness about the benefits of early learning, it seemed to hit a snag during the recession as it slowed down due to the fact that many families couldn’t bear the cost.
Establishments in this industry are dispersed depending on the geographic distribution of children. Other factors for locating a kindergarten include cost and supply of child care, income, labor, child care subsidies and housing affordability. Also, depending on the state where the kindergarten is located, there might be regulations and licensing issues which might affect employment rate.
Starting a Kindergarten Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who demand the services of a kindergarten are parents, wards and guardians of toddlers who do not have the time to teach these kids themselves or who wants the kids to interact and learn with other kids.
Regardless of how much a parent is making, most send their kids to kindergarten because they need the free time to make money, so if you are looking to define the demographics for your kindergarten business, try to make it broader for parents and guardians of different income levels and backgrounds.
List of niche ideas within this particular business that one can specialize in
The aim of running a kindergarten business is to stimulate the minds of little children through learning and interaction, thereby leaving almost no room for any niche services, but there are still few niche ideas that you can consider.
A niche idea entails something different from the ordinary that will make your business stand out and compete effectively in the sector that you are in. it is vital that you conduct a thorough research on the niche idea you intend to engage in so that you do not end up wasting time and resources in engaging in a niche service that will not pay you in the long run.
Below are some niche ideas within this sector that you can specialize in
- Kindergarten for gifted children
- Crafts kindergarten school
- Arts kindergarten school
The Level of Competition in the Kindergarten Business Industry
Kindergartens are now springing up everywhere thereby increasing the level of competition in the industry as parents and guardians now have to take their time and look at which schools will mostly benefit their child especially if they have talents.
The kindergarten school is that which must be run from a physical location and so if there are other established kindergartens in the area you intend to start your own kindergarten school, it will be best if you offer niche services that will allow you to stand out as parents will not mind registering their children in a unique school as long as they have a good curriculum in place.
Even though there are several kindergarten schools scattered all over the United States of America, you shouldn’t be bothered by that as the only stiff competition will be from those that are operating in the same area where you intend to operate your own kindergarten school.
List of Well – Known Brands in the Industry
The aim of kindergarten schools is to give kids the best start before they start regular schooling and as much as there are a number of well-structured kindergarten schools in the United States, only a few stand out as being very popular. Brands that are popular are those that have distinguished themselves in the industry either due to their student to teacher ratio, their facility, their curriculum, their rates or the services they offer.
Below are some of the well-known kindergartens in the United States;
- American School Foundation
- Berkeley Montessori School
- Cedar Creek Montessori School
- Growing Light Montessori School
- Black Pine Circle School
- Trinity School
The education services industry is a very large one with growing sectors within the industry. There are more than 100,000 schools in the private sector and more than 200,000 in the public sector employing more than 3.5 million people.
The industry is however hugely fragmented as the top 50 companies all contribute about 30 percent of the total industry revenue. According to statistics, the year 2014 had about 55 million students who were in grades K-12 which means more students for other segments in the educational services industry.
Majority of the revenue in this industry come from program fees or tuition, and gross profit for the company usually depends on factors such as the location of the school and the subject matter. Operators within the industry have found that in getting benefits to scale, one would need to have lower fixed costs and increase operational efficiency. However, this is not usually easy to achieve especially with the scarcity of qualified teachers.
This sector of the industry is seen as a growing field and according to the United States Bureau of Labor Statistics; the industry is poised to have the fastest growth in employment by the year 2020. The growth in this sector of the industry is attributed to the recognition of the need to stimulate the mind of the child to get them ready for formal education, and it also has lifelong benefits for them as well. It is estimated that children in kindergarten spend at least 35 hours per week in school.
Starting Your Kindergarten Business from Scratch vs Buying a Franchise
The schooling system regardless of whatever level stems from the entrepreneur’s need to make a difference in the lives of the children regardless of age, and so whether starting from the scratch or buying a franchise, you should ensure that the children will be able to benefit from your decision in the long run. Also, while it might be difficult to decide on which option will be more beneficial to your kindergarten, it is essential that any decision you make is that which will totally align with your corporate goals and objectives.
Starting your kindergarten from scratch is not a bad idea as you can start small and slowly create room for more students as you expand. While you might have an experience with teaching, running a business is a different ballgame altogether and so it is necessary that you write out a business plan to guide you in running your kindergarten.
There are franchise opportunities available to those that are looking to start a kindergarten and the reason why some entrepreneurs go for franchises is so as to be able to compete against existing kindergartens. However, as with any business decision that you will be making, ensure that you have thoroughly gone over the decision of why you are better off buying a franchise; also study your area properly in order to know which franchise will best work for you. It is important that you carefully study all the capabilities of the available franchises, so that you do end up buying what will not help your business grow.
Possible Threats and Challenges You Will Face When Starting a Kindergarten Business
In every business, threats and challenges abound and it is your duty as an entrepreneur to know what threats you are likely to face during the course of either starting or running your business. Being prepared for threats and challenges shows that you are serious about the business you intend to start up. You should however be aware that not all threats and challenges can be duly handled and when these kinds occur, the best you can do is hope for the best outcome.
Some of the possible threats and challenges that you will face when starting your kindergarten business are; having to compete against other existing kindergartens in your area of operation, trying to get the awareness of potential customers especially as a newbie and economic downturn that will see many parents out of a job and preferring to home school their children.
Starting a Kindergarten Business – Legal Matters
- Best legal entity to use for this type of business
As an entrepreneur, one of the most important decisions that you will ever make regarding your business is what legal entity will be right for your business. This is because the legal entity you choose can have an impact on your business in the short and long run. The fact that this is a service based business involving children means that you have to be more careful on what legal entity you choose for your business.
When looking to choose a legal entity for your kindergarten, you should ensure that the following factors are taken into consideration; liability limit, ease of setup, ownership and control, flexibility and taxation structure. These factors will help guide you into making the right decision for your kindergarten and if you are still confused, you might need to consult with an attorney to help you out.
There are basically three kinds of legal entities that you should take into consideration when looking to start your kindergarten and they are sole proprietorship, partnership and Limited Liability Company (LLC). In the LLC, the owner and the business are regarded as separate entities which mean that should the business encounter any sort of incident or liability issues, the owner cannot be held personally liable by law. This sort of legal entity is perfect for entrepreneurs running a risky business or looking to source for funds from investors.
Catchy Business Name Ideas Suitable for a Kindergarten Business
Having a catchy business name for your kindergarten is very important because the name you choose can generate the right sort of awareness for your business. A business name is much like a name for an individual and it should be pronounceable, memorable and unique enough. You can look through several known names around you or online in order to get the inspiration you would need for yours.
Below are some catchy names suitable for your kindergarten;
- Books and Tumble School
- Gifted Minds School
- Quick Learning Schools
- Quick Intuition Schools
- Different World School
The school business is a risky business because not only might something happen to your property either through your employees or the kids themselves but most importantly something might happen to the kids which might then cost you a lot of money if you aren’t insured.
Insurance is therefore a very important aspect when it comes to running a business as it allows the entrepreneur to pass off his or her risk to the insurance company. Knowing which insurance policy to buy for your kindergarten might be hard, which is why it is best you engage an insurance agent or broker to help you with the policies that will be best for you.
Below are some of the basic insurance policies that you will need to consider purchasing if you are looking to start your kindergarten business in the United States;
General Liability Insurance
Employers’ Liability Insurance
Workers’ Compensation Insurance
Business Interruption Insurance
Commercial Property Insurance
Professional Liability Insurance
Intellectual Property Protection/Trademark
Intellectual property typically refers to what a mind creates and so things like names, symbols, inventions, images, designs, artistic and literary works are examples of intellectual property that needs to be protected. The catch with intellectual property is that you cannot protect an idea and so whatever you intend to protect must be something real and tangible.
And so, while it might be necessary to file for an intellectual property protection, it is vital you note that not everything should be filed for especially if you are looking to minimize the cost of starting your kindergarten. You can consult with a lawyer to let you know what you will need to be intellectually protected.
Is Certification Needed to Run a Kindergarten Business?
As one who intends to start and run a kindergarten, you might not be required to get any professional certification before you start except you also intend to teach in the school as well. Even though certification for kindergarten teachers varies from state to state, there are common certifications that are expected regardless of the state the kindergarten is in.
A kindergarten teacher is expected to have an undergraduate degree, complete a teacher preparation program and then pass the Praxis Core Academic Skills for Educators and Praxis Subject Assessments exams before applying for licensure. Optional certification in any discipline can then be gotten through the National Board for Professional Teaching Standards.
List of Legal Documents You Need to Run a Kindergarten Business
If you are looking to start your kindergarten business in the United States, then it is essential that you get all the legal documents that you will need to run your business without hitches in place. If you aren’t sure of what legal documents you will require, it is best you seek the counsel of an attorney to help you out so that you do not run into any trouble with the law.
Some of the basic legal documents that you will be required to have when looking to start your kindergarten include;
- Certificate of Incorporation
- Operating Agreement for LLCs
- State License
- Business License
- Employer Identification Number (EIN)
- Business Plan
- Insurance Policy
- Employment Agreement
Financing Your Kindergarten Business
The amount you will need to start your kindergarten school will depend on the scale of school you intend to run. While some people can run a kindergarten business in a room, others will need to lease or buy a land or facility. Also, you will need money for supplies, to pay your staff, and run the business till it is able to generate the needed revenue for itself.
While sourcing for start-up capital is not an easy thing for an entrepreneur, it is not something that can be wished away except you have your own funds with which to run the business. If you are going to be approaching others, you will need a business plan that will detail how your business will run and how your investors will recoup their investment in your kindergarten.
Below are some of the financing options that are available for your kindergarten business;
- Use of personal savings or revenue from sale of property or stock as start-up capital
- Sourcing for soft loans from family members and friends
- Applying for grants from the state government
- Getting a business partner to split your start-up capital with
- Applying for loan from the commercial bank
Choosing a Suitable Location for your Kindergarten Business
Where you choose to locate your kindergarten matters a lot. A lot of thought should be given to location so as to find one that will not only be suitable and safe for the kids and within the hub of where they live or their parents work in, but also one that will fall under the zoning requirements in the area you intend to operate from. Also, location has a great impact on how you will easily generate revenue that will sustain and grow your business.
One major question you have to look at when choosing a location for your kindergarten is how large the location is and if it has enough space for parking or for the equipment you intend to use. If you are going to be running your business from a facility, you should find out how much renovations will take place in order to qualify it for a kindergarten.
This does not mean that you cannot run your kindergarten business from home especially if you own your property and have a spacious room that you can use. However, before you can use your home, it is important that you check in with your neighbors as well as with the local authorities to know if your house can be used so that you do not end up running into trouble with the law.
If your kindergarten is located in a commercial building, service apartment, condominium, or flats, then choosing the ground floor is the only option you have. Regardless of where you chose to run your kindergarten from, there should be a playground either indoor or on the property. If you aren’t sure where to best locate your kindergarten school, then engaging the services of a real estate agent will be to your benefit.
Starting a Kindergarten Business – Technical and Manpower Details
In starting your kindergarten business, there are several details that you must take into cognizance and they are ensuring that your business is properly registered. A registered business means you provide a name for your kindergarten that must have not been taken by anyone else, you secure the necessary licenses that you will need to be able to run the business and you get a suitable location for the business that will be convenient for both the parents and their kids as well as those that you will employ in your school.
There are several standard curriculums that can be used to run your kindergarten school. Ensure that you have researched on the different curriculums so that you can choose the one that aligns with your corporate goals and objectives. Take into cognizance what you intend to charge as fees and ensure that the value is worth the rate.
There are certain equipment and tools that you will require in order to run your school efficiently. It is important to note that some of the equipment can be gotten as fairly used – you can buy from another kindergarten – or as brand new.
This decision will sorely depend on how much you have at hand to start the business with. Some of the equipment that you will require include; play structures, magnets, scarp paper, beads, Ziploc bags, child safe scissors, construction paper, foam sheets and stickers, computers, printers, phones, board, desks and chairs.
Building a solid business structure is necessary if you are intending to run an efficient school and so it is necessary that you find certified and competent teachers who can identify with your corporate values and objectives and are willing to help you in achieving them. If you are going to be running your kindergarten business from home, then you might just do all that is needed to be done yourself. If however you intend to run a standard kindergarten, then you will need to hire others to help out.
Those that you will need to hire are; school administrator, office administrator and human resources manager, customer care executive, security, cashier, teachers and cleaner. Therefore, if you are looking to run a standard kindergarten in the United States, you will need to hire at least 10 people.
The Service Delivery Process of a Kindergarten Business
The kindergarten school which is in an educational service industry mostly creates curriculum and activities that will engage the children as well as stimulate their minds.
Students are expected to learn math, recognize letters and phonics, play and have a hands-on education, be aware of nature and science and participate in other activities like school concerts and assemblies. It is important that you get all the necessary licenses that you will need to run the school, create an enabling environment and also hire only qualified teachers in your school.
Starting a Kindergarten Business – The Marketing Plan
- Marketing ideas and Strategies
Even though the majority of your revenue is likely to come from tuition, if you do not properly advertise your business, you will not get the necessary awareness that will attract the customers who are supposed to bring their kids to your school.
Marketing is therefore a very important part of running a business because with marketing, you can quickly recoup your investments. Also, marketing allows you to be able to penetrate your intended target market and get a share of the market whilst creating an identity for your business that will make it stand out from others.
One key thing that should not be taken for granted before proper marketing can be done is a proper research about who your target market and competitors are, what they expect from you and what you should expect from them as well. Also, it is only after your market research has been done that you can have any inkling of what your corporate marketing goals and objectives will be which will then allow you create effective marketing strategies for your business.
How you market your kindergarten will largely depend on your marketing budget. If your budget is very tight then it will sorely limit the means and avenue you can use in creating more awareness for your business. Before you go off creating marketing strategies, check what most operators in your field are using when marketing their schools and then either adopt it or use it as an idea for yours.
One thing that has an effect on how a business is marketed is the location of the business. If you are located in an area that is too far off, not only will you spend more in marketing but you might likely not find parents willing not to take their kids too far out. Therefore, ensure that you try and locate your kindergarten within the hub of your target market.
Below are some of the marketing strategies you can use for your kindergarten;
- Introduce your teachers to their friends, neighbors and family and have them advertise your kindergarten for incentives
- Advertise your kindergarten in local newspapers and on radio and television stations
- Use your social media platforms such as Facebook, Twitter and Linkedin to create engaging content and then attract your target audience
- Install billboards and flexi banners in various strategic locations to market your kindergarten
- Engage marketers to help attract customers to your kindergarten school
- Pass out handbills and paste fliers in various strategic locations in order to boost awareness for your kindergarten school
Possible Competitive Strategies for Winning your competitors
As long as you are running a business that will enable you generate revenue and make profit, then it is imperative that you expect competition either from those who are already operating the same business or those who are looking to enter the industry in the same area where you are operating yours. As an entrepreneur prepared to run your kindergarten business and excel in it, you should develop some competitive strategies that will allow you to win over your competitors in this area.
Some of the competitive strategies that you can therefore use to win over your competitors are; ensuring that you offer a different curriculum that will make parents register their children in your school, create an enabling environment for the children and build a solid business structure by employing only skilled and competent teachers in your school.
Possible Ways to Increase Customer Retention for your Kindergarten Business
Though the kindergarten is a pass-through school where the children are supposed to be prepared for what they will face when attending formal school, and it might not fall under your average sort of business where you are supposed to retain your customers, there are still strategies that you can deploy to ensure that your customers refer others to your business, thereby saving you the cost and process of attracting new customers.
There are several ways you can increase loyalty for your brand and get your customers to prefer your brand to others, and one of them is by ensuring that your curriculum offers what others in your area aren’t offering. Parents want their kids to stand out and having a unique curriculum will be effective in helping you increase loyalty to your brand.
Building a solid business structure is very important. Not only should you hire competent and certified teachers to your kindergarten but you should ensure that they identify with your corporate objectives and are willing to work towards helping you achieve it.
Finally, ensure that you have the best customer care that will ensure that complaints are promptly attended to and feedbacks are acknowledged. This way parents will feel like they are a part of your kindergarten and that they are providing the best care for their children.
Strategies to Boost Your Kindergarten Business Brand Awareness and Create Your Corporate Identity
When starting any kind of business, it is important that you have strategies in place to boost the awareness of your brand and create a corporate identity for your company not only to your intended target market but to even those outside the industry.
Creating a positive identity for your kindergarten will ensure that parents have the confidence to bring their children or ward to your school. Boosting the awareness of your brand also shows that you are taking your business seriously as opposed to just wishing that your school will be noticed without taking steps to bring it to the awareness of the public.
One thing with boosting awareness for your brand is that the more people that are aware of your business, the more you are going to be able to convert some of this awareness into revenue generation for your business. The many benefits of publicity is why companies that are already in existence and deemed successful do not take it for granted as they are willing to set aside a certain amount of money every month or year to ensure that they engage in publicity campaigns for their business.
However, like any huge decision that you will be making when starting or running your business, it is necessary that you take time to thoroughly study who your kindergarten publicity campaign will be targeted at, what you should expect from them as well as what they expect to see in your campaigns. It will also help you know which publicity campaigns are likely to be more effective.
Many entrepreneurs have found the internet to be a very useful resource when it comes to publicizing their brands because not only is it very cheap for entrepreneurs in the long run, it is also very effective as it can reach a wide number of audience quicker than the traditional means of advertising. This does not however mean that you should stick to just one means of publicity as other means can be used to gain more awareness for your kindergarten business.
Below are some of the means by which you can use to create awareness as well as create a corporate identity for your kindergarten school;
- Create a website for your kindergarten, list your services with pictures and deploy SEO strategies to ensure that your website comes out tops in search engines
- Install billboards in various strategic locations in order to create awareness for your kindergarten
- Throw a grand opening party and invite the press in order to attract attention to your school
- Ensure that you advertise your kindergarten in local newspapers as well as on radio and television stations
- Use your social media platforms such as Facebook, Twitter and Linkedin to promote your kindergarten
- Encourage your first clients to help spread the word about your kindergarten in return for an incentive like a discount