Start A Daycare Center (on A Tight Budget)

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When preparing your budget for your new day care center

, return often to your understanding of the core service you need to provide: a safe space with competent staff. Use this understanding to guide you as to where you can save money and where you must be ready to spend.

An Example - Food Service

One example is lunch service for the children in your day care. Day care centers may prepare fresh lunches in their own kitchen for children. However, having to build out a kitchen may add significantly to the capital you need to raise. What would happen if you cut the kitchen and instead ordered lunches out daily, working out the best deal possible with a local restaurant or store? You would cut not only the start-up cost, but also the electrical and maintenance costs associated with having the kitchen equipment. You could also devote more staff time to working with the children and avoid the daily labor of food preparation, and the periodic labor of ordering and maintaining supplies and ingredients. The direct cost of the meals would certainly be higher, but maybe you could pass on this cost to parents by explaining the benefits of outsourcing meals to a skilled business. This is the type of cost-saving analysis you should undertake.

Grow With Your Business

Making sure that you only add to your capacity as your sales and attendance grows can also go a long way toward keeping down your initial expenses. If you can sign up children for day care early enough, you can wait until you know group sizes to hire staff and ensure that you do not hire more staff than needed. The same goes for supplies.

There is always a trade off, and, in this case, requiring parents to sign up earlier reduces your ability to serve last minute additions. Look for all the tradeoffs that any cost-saving method will require in terms of what the parents in your area will value.

Value Engineering

Value engineering is a way of looking at every component of the service you will offer and making sure it will offer enough value to customers to warrant being included. It is important, whenever possible, to use a set of outside eyes, and preferably someone with experience in the day care industry, to offer ideas of areas to cut through value engineering. If certain elements of your physical center or services do not increase your value to parents, bolstering the price you can charge, then they should raise a red flag. For example, extensive outside signage may be attractive, but, if you are not in an area where it will serve as marketing to passersby, consider if it is worth the expense.

by: Eric Powers

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