Help women in underserved communities feed and take care of their families.      DONATE

Simple Ways To Create A Daycare Budget Plan


Creating a precise daycare budget plan that meticulously accounts for all of your expected spending is critical to your childcare center’s success.

If you’ve never budgeted before, the process may appear daunting at first — but don’t worry, we’ve got you covered.

In this post, you’ll discover the fundamentals of a daycare budget plan, why it’s important, and how to create your own daycare budget plan. We’ll also highlight the most crucial topics to include in your strategy to ensure you don’t overlook anything.

Let’s get started!

What Is A Budget Plan For A DayCare Center?

A budget is just a strategy for how you intend to spend your money.

Budgets are usually classified into two types: business and personal.

A personal budget is a strategy for spending your own money in a way that suits your and your family’s needs. Housing, food, clothing, entertainment, and other needs may be included in a personal budget.

A business budget is a strategy for spending money to meet business goals, such as developing and delivering a new service to clients.

In this scenario, your daycare budget plan might be used to budget for:

  1. Starting your own daycare business
  2. Getting your first daycare clients
  3. Providing childcare services to customers while adhering to local rules and quality requirements

Because each daycare center is unique, you will need to develop a budget based on your personal circumstances.

These factors include your physical location or jurisdiction, the expected size of your center, whether you intend to employ people, how you intend to run your center, the activities you aim to offer, and other details.

Why Do You Need A Daycare Budget Plan?


Creating your own daycare budget plan is an important step toward opening and running your own facility.

Making a budget for your child care center will assist you in the following ways:

  • Understand the procedures you must take from conception through opening day and beyond to successfully launch your child care center.
  • Anticipate and budget for the numerous expenses you will incur as you prepare to start your center.
  • Determine the resources needed for a successful business launch.
  • Make sure you have enough operating money to keep your firm running in the short term while you try to boost enrolment.
  • If necessary, secure funding or money to help you establish your business.

If you need to get funding from a bank to establish your childcare facility, you’ll need to write a business plan describing how you want to spend the money and how you intend to repay it in the future.

Your budget is an important aspect of your business plan since it displays to potential investors or financiers that you understand business needs and their associated costs.

Crafting Your Daycare Budget Plan: Understanding Costs


You’ll need to investigate and document the many expenses and prices related to owning and operating a childcare center as you create your childcare budget plan.

Before we begin, let’s go over some of the expenses you’ll need to be aware of.

1. Operating Expenses vs. Capital Expenses

Operating expenses are continuing costs associated with the day-to-day operation of your child care center.

A capital expense is the purchase of a long-term asset for your childcare business. If you buy an oven to cook meals, it is a capital cost; but, your monthly gas payment for utilizing the oven is an operating cost.

2. Fixed Costs Versus Variable Costs

Both costs can both be included in operating expenses. Fixed costs are expenses that do not change from month to month, whereas variable costs vary in relation to your business operations.

Your monthly internet fee is an example of a fixed cost. It is the same price regardless of the number of children registered in your programs.

Meals, on the other hand, are considered a variable cost. If your center has more children enrolled, you will need to spend more money to offer more meals.

It’s worth noting that, while your internet subscription is fixed, and your meals are changeable, both are instances of running expenses.

Understanding the various sorts of expenses will allow you to more properly anticipate costs when you create your daycare budget plan.

What to Include in Your Daycare Budget Plan


Now, let’s delve deeper into how to create a daycare budget plan for your center in order to select the most critical elements to include in your daycare budget plan. For each item, we’ll provide a quick explanation, emphasize the cost kind, and offer our best advice on how to successfully budget for the item.

1. Daycare Licensing Fees: 

Many jurisdictions require childcare providers or center operators to have a valid license. To maintain compatibility with local requirements, many licenses must be renewed each year.

Cost Type: 

Variable cost

Budgeting Method:

The cost of child care licensing varies based on the size of your center and the number of children in your care. You can contact your local childcare licensing authority to learn more about annual licensing costs and get an estimate of what it will cost you.

2. Legal and Accounting Costs: 

As you start your child care center, you may need legal help to establish your business or develop contracts for suppliers, staff, or consumers. You may also want to work with an accountant who can help you arrange your books, manage payroll, and provide tax services.

Cost Type: 

Variable cost

Budgeting Method:

Incorporating a company and developing contracts are both capital expenses, but continuous legal and accounting services are considered operating expenses. Legal and accounting fees will vary depending on the size and complexity of your company. Write down exactly what you need help with and obtain price quotes from multiple service providers to receive the best bargain.

3. Costs of Facility and Renovation

Overview: Before you can create a daycare facility, you must first locate an appropriate space in an appropriate area. You may also need to renovate the space before you open to ensure it fulfills your demands.

Cost Type:

Capital expense.

Budgeting Method:

Budgeting Methods:

The cost of a facility and its restoration can vary greatly. If you establish a childcare business in your own home, your expenses will be minimal. Your costs will be significant if you buy or rent a commercial property and renovate it to meet your business. Reviewing local commercial real estate listings might help you find possible places. Look for a place that is heavily populated, residential, near a school, and requires minimal repair.

4. Insurance

Daycare insurance can protect your business from liability for injuries to children in your care, property damage caused by your business, and other potential sources of liability. There is also professional liability insurance, which protects you against accusations that you made a mistake or supplied incorrect services.

Cost Type: 

Variable cost

5. Furniture and daycare Supplies

This category requires tables, chairs, carpets, sofas, desks, shelves, an oven, a refrigerator/freezer, and a microwave. Also, Toys, books, games, and other educational items that you’ll need to keep youngsters interested and improve learning outcomes are referred to as childcare supplies.

Cost Type: 


Budgeting Method:

Create a floor plan for your child care center and consider the furnishings and equipment you’ll need to maximize the area. Make a shopping list of the products you’ll need and budget for each item separately. You may always save money on furniture by thrifting or buying on sale.

5 Steps Summary of How To Create A Daycare Budget Plan

SUMMARY blank list, business concept
  • Step 1: Include start-up costs and one-time purchases.
  • Step 2: Set aside money for child development materials.
  • Step 3: Make Provisions for Employee Salaries
  • Step 4: Set aside money for emergency supplies and safety equipment.
  • Step 5: Create an Improvement Budget

Frequently Asked Questions About Daycare Budget Plan

What exactly is a yearly operating budget?

The Annual Operating Budget contains financial information about expected revenue and expenses. The working budget for the facility is comprised of anticipated revenue and expenses, which reflect the expected revenue and expenses for the next year of operations.

What is the difference between financial planning and budgets?

Short-term: A financial plan often tracks your progress quarterly or semi-annually. A budget is a weekly or monthly record of your income and expenses. In general, the more closely you adhere to your budget, the more you will move on to your financial plan.

Does one need a license to start a daycare?

Yes. You do need a license to open a daycare.

Conclusion on Daycare Budget Plan

Create a simple spreadsheet for your budget plan once you’ve gathered data and information on all of your predicted charges.

Try to sort your list into categories. Make an itemized list for each category of what you intend to buy and how much you expect it to cost.

Remember that your budget is a live document, so make revisions as your estimates alter, or anytime you save money by getting a great bargain.

Finally, use your daycare budget plan to get funding or investment for your business, optimize your expenditures, analyze your operating costs, and figure out how many enrollments you’ll need to break even.

Share this

Notify of

Inline Feedbacks
View all comments