You have opened your daycare, found parents as clients, and now care for their children on the weekdays to receive a weekly payment from each parent.
Depending on the income you make on a weekly and monthly basis, you will have to budget these funds appropriately to run your business.
Here we present a free daycare budget template at the end of this post. Before we get into that, let’s discuss some important information on:
- Why it’s important to have a budget as a daycare business.
- How to categorize your business expenses on your budget template.
- How you can make your budget template.
Why Is It Important To Have a Budget as a Daycare Business?
Think of your daycare’s budget almost like your personal budget for running your household. You have bills such as mortgage or rent, utilities, phone, Internet, cable, gas, water, car payment.
For a daycare, you have to allot a budget for building utilities, classroom furniture, classroom supplies, marketing expenses, labor, and more.
Keeping a proper budget when running a daycare will help you to:
- Find ways to stretch your dollar to accommodate expenses if you only have a little bit of income for that month.
- Keep limits on your expenses by designating a specific dollar amount for each category.
- See how much profit you can make after all expenses have been deducted from your monthly income.
- See if you are spending over budget in any of your categories currently so that you can cut them down where necessary.
Learn more about your daycare’s operating budget!
How to Categorize Your Budget Template
Whether you have a small daycare with 5 children or a larger sized daycare that looks after 50 or more children per day, you are going to accumulate various expenses that will fall under specific categories.
Any administrative expenses will be expenses that need to happen to successfully and legally run your daycare such as:
- Monthly building mortgage or rent payment.
- Training expenses for teachers and aides.
- Business insurance.
- Business licensing and registration fees.
- Monthly utility bills for electric water, sewer, etcetera, and any utility deposit that may be required when you start your daycare.
The childcare expenses category includes what you have to spend on to directly take care of the children that are enrolled at your daycare.
The 3 main subcategories of childcare expenses are food, educational supplies and equipment, emergency supplies, and employee labor. Food, educational supplies, and employee labor will be a continuous expense every month. Emergency supplies may only have to be replenished once per quarter depending on how many emergencies arise at your daycare in the classrooms.
While you can choose to receive food from the local public school district in your area or even state funding for free food for your daycare, you may ask parents to pack lunches for their children as well.
If you receive state funding for food, you should still take into account the weekly and monthly budget for food based on how many children are enrolled at your daycare.
If you get lunch provided by a local school district, all you would have to provide is a snack for after nap time and budget accordingly every month for these expenses.
Here’s an example for budgeting only snacks during the week if you have breakfast and lunch provided by a community resource or parents:
Monday and Wednesday Snack: Animal Crackers
It costs about $9.00 for a 60 oz container of animal crackers. Say there are about 7 cups of animal crackers in each container. Each child gets a third of a cup per snack time. That serves about 21 children per container. This is about 43 cents per serving. You will need to purchase 6 containers to feed 50 children this snack on Monday and Wednesday.
Hence, you will be spending $43 for Monday’s and Wednesday’s snacks.
$0.43 per serving x 100 servings (50 on Monday and 50 on Tuesday)= $43.
Tuesday and Thursday Snack: Gummies
A package of 90-count name-brand gummies costs about $13.00. That’s 14 cents per gummy pouch. If you only have 50 children enrolled, you will have to purchase 2 boxes for the week.
When you give 100 out of the 180 total gummy packs, you will be putting out $14 total on Tuesday and Thursday during snack time.
$0.14 per pack x 100 packs given (50 on Tuesday and 50 on Thursday)= $14
Friday Snack: Cupcakes From a Local Bakery
Say that your local bakery sells cupcakes for $15 per dozen. If you have 50 kids, you will have to purchase 5 dozen cupcakes which equal 60 total cupcakes and $75 total spent at the bakery. The extra 10 cupcakes can be shared amongst teachers and aides at the facility.
Total for the Week
Based on the above examples, you will pay about $132 in snacks every week depending on what snacks you offer your students.
You can cut snack expenses by asking parents to donate snacks to your daycare’s pantry. As a reward, you could give them a small promotional credit on their weekly daycare bill if you choose.
There are many educational supplies you will need to engage your students as they attend your daycare. While they are young, they still need stimulating educational activities to start their early trek to grade school via crafts, hands-on activities, and books to read.
Educational supplies you will need for your classroom include:
- Age-appropriate books for each classroom.
- Art supplies:
- Construction paper.
- Age-appropriate toys that stimulate all senses.
- Number blocks.
- Soft crinkly toys for infants.
You will always need emergency supplies when in daycare. Incidences happen when caring for children. They may get into little fights with each other or slip and fall in the classroom or on the playground.
Your facility must also have carbon monoxide and smoke detectors and fire alarms in case a fire breaks out during business hours for whatever reason.
Be sure you budget for emergency supplies such as:
- First-aid supplies.
- Alcohol prep pads.
- Antibacterial cream.
- Carbon monoxide detectors with one per room and one per hallway.
- Fire detectors in each room with one per hallway.
- Fire alarms in every room and designated areas in some hallways of the daycare.
Depending on the minimum wage in your area and the work experience of your teachers and aides, you must pay each employee a salary. The more children your daycare serves means the more staff you must hire to satisfy child to teacher ratios.
If you have a teacher hired at $20 per hour working 40 hours per week, that’s $800 per week.
If you need 7 teachers to cover 50 students throughout the daycare, teachers’ salary alone is $5,600 per week and $22,400.
Calculate how much you will need for furniture expenses when you start up your daycare. This will include:
- Office furniture and supplies
- Office desk(s).
- Filing cabinets.
- Filing folders.
- Writing utensils.
- Permanent markers.
- Whiteboard markers.
- Stapler and staples
- Classroom furniture.
- Naptime cots.
- Changing tables.
- Cribs (if infants or smaller toddlers in the classroom)
To attract new customers to your daycare business, you need various marketing channels. Consider print, social media, and newspaper or direct mail advertisements as a start to your marketing efforts.
Your print marketing could be copies of flyers promoting the daycare business that you post at local businesses and organizations such as libraries, colleges, universities, grocery store bulletin boards, and more.
If you want to get one of your social media ads sponsored for it to catch more eyes to your local community, this would be in addition to your marketing expenses.
Conducting a direct mail campaign would add to the marketing expenses via paying for postage, mailing supplies, and the flyers you will include in every envelope.
How to Make a Budget Template for Your Daycare Business
Simply create a chart on Microsoft Word or Microsoft Excel. Create separate charts on Microsoft Word for every expenses category as outlined above. If you are using Microsoft Excel, you can put the separate charts all on one Excel sheet.
If you do not have Microsoft software, you can use the compatible programs Google Docs and Google Sheets by accessing Drive in your Google account.
Free Sample Budget Template for a Daycare
Here is a free sample budget template for your daycare as prepared in Microsoft Word.
The monthly food expense will vary based on the different snacks you feature. Educational supplies will be replenished every so often based on how often your classrooms do crafts and how many materials you purchase before opening your daycare.
In the childcare expenses section, the labor costs will be a recurring amount as long as you maintain the same amount of employees.
Say that when you start what you will only have 5 teachers ($15 per hour per teacher for 40 hours every week) and 5 aides ($12 per hour per aide for 30 hours per week) to cover your classrooms.
Customize it how you please by adding any additional expenses you are going to accrue that may not be listed below. If you do not have to spend on a certain expense for whatever reason, you can omit it off the chart as necessary.
|Rent or mortgage||$2,300|
|Registration and licensing||$500|
|First months’ utility expenses and deposit||$400|
|Legal and/or accounting fees||$500|
|Kitchen supplies and equipment (unless you have lunches provided by parents or local district)||$3,000|
|Cleaning and maintenance supplies||$400|
|Indoor classroom furniture (bookshelves, safety alarms, tables, chairs, cribs, etcetera)||$12,000|
|Outdoor classroom furniture (playground equipment, fences, lawn care services, etcetera)||$17,000|
|Digital marketing on daycare website||$350|
|Social media sponsored posts||$100|
|Direct mail campaign||$300|
Total Costs for the First Month of Opening Your Daycare
Here’s a grand total of this sample template’s first month’s daycare expenses.
Grand total: $64,920
1. Is there a way to not accrue any food expenses at all?
Be sure to be enrolled in a state funding program to receive free daycare meals. You may be able to partner with your school district to get free daycare meals. If you would rather not provide snacks to the daycare children, you may ask the parents to pack a snack for their children separate from their lunch to enjoy at snack time after nap time.
2. Can I market my daycare business without doing sponsored social media ads?
This is possible! Just promote more efforts to spread the word about your business by encouraging parents to review your daycare on Google My Business and/or Yelp. They can even tag your daycare’s social media page and tell potential new clients about their child’s experience at your daycare. This is all free marketing ideas to make up for not promoting sponsored social media ads.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
To learn more on how to start your own daycare checkout my startup course and documents here.
Meet Shawn Chun: Entrepreneur and Childcare Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online daycare business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a childcare business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Daycare Business Boss: I want to help childcare business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.