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If you don’t plan and track your daycare budget properly, you're setting yourself up for failure.
When we developed our strategy pack for daycare owners, we saw a lot of daycare owners struggling with finances and planning.
They were disorganized, had no grasp of cash flow, and were drowning in financial troubles despite having substantial enrollment.
Don’t let this be you—stand out and succeed.
We’ve created a small, free tool to help you get started: our Budget Tracker and Planner. Let’s turn your daycare's finances around and set you on the path to success!
Get the budget tracker tailored for day cares
Most day care owners don't know how to plan and track their budget. This spreadsheet will help you.
Example of a full budget for day cares
Here is an example of a (very) detailed budget for a day care, to give you some inspiration
1. Rent and Utilities
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Rent | Lease for day care space | $4,000 | $48,000 |
| Electricity | Power consumption for lighting and appliances | $600 | $7,200 |
| Water | Water usage | $150 | $1,800 |
| Gas | Heating and cooking | $200 | $2,400 |
| Internet & Phone | Internet service and business phone | $100 | $1,200 |
| Waste Removal | Garbage and recycling services | $80 | $960 |
| Pest Control | Monthly pest control services | $50 | $600 |
| Insurance | Property and liability insurance | $400 | $4,800 |
2. Salaries & Wages
| Position | Number of Employees | Monthly Cost per Employee | Total Monthly Cost | Annual Cost |
|---|---|---|---|---|
| Director | 1 | $4,500 | $4,500 | $54,000 |
| Lead Teacher | 2 | $3,000 | $6,000 | $72,000 |
| Assistant Teacher | 3 | $2,500 | $7,500 | $90,000 |
| Cook | 1 | $2,000 | $2,000 | $24,000 |
| Janitor | 1 | $2,000 | $2,000 | $24,000 |
| Administrative Assistant | 1 | $2,500 | $2,500 | $30,000 |
3. Supplies & Materials
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Educational Materials | Books, toys, learning aids | $500 | $6,000 |
| Art Supplies | Crayons, paper, paint, etc. | $200 | $2,400 |
| Cleaning Supplies | Detergents, sanitizers, etc. | $150 | $1,800 |
| Diapers & Wipes | For infants and toddlers | $300 | $3,600 |
| Snacks & Beverages | Healthy snacks and drinks | $400 | $4,800 |
| Office Supplies | Stationery, printer ink, etc. | $100 | $1,200 |
4. Marketing & Advertising
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Online Advertising | Google Ads, Facebook Ads, etc. | $200 | $2,400 |
| Social Media Management | Managing social media accounts | $300 | $3,600 |
| Print Advertising | Flyers, posters, newspaper ads | $150 | $1,800 |
| Website Maintenance | Hosting, domain, updates | $100 | $1,200 |
| Email Marketing | Email campaigns and newsletters | $100 | $1,200 |
| Promotional Events | Special events and promotions | $150 | $1,800 |
5. Miscellaneous Expenses
| Item | Description | Monthly Cost | Annual Cost |
|---|---|---|---|
| Equipment Maintenance | Regular maintenance of playground and classroom equipment | $300 | $3,600 |
| Uniforms | Staff uniforms | $100 | $1,200 |
| Licenses & Permits | Child care licenses, health permits, etc. | $100 | $1,200 |
| Software Subscriptions | Child care management software | $150 | $1,800 |
| Contingency Fund | Emergency repairs and unexpected costs | $400 | $4,800 |
| Staff Training | Training programs and materials | $200 | $2,400 |
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We have studied the strategies of the best day cares in the world. Replicate them now!
What are the biggest expenses for a day care?
Be mindful of these critical expenses. Here are five major costs every day care owner needs to consider, along with some tips on how to manage them effectively.
- Supplies and materialsThese can take up a significant portion of your budget. You're dealing with items like diapers, art supplies, educational toys, and snacks, which need to be replenished regularly. To keep these costs in check, buy in bulk, look for discounts, and prioritize essential items. It's easy to overspend by purchasing too many non-essential or high-end items that don't add enough value.
- Staff at your day careYour staff is your foundation, but paying for their wages, benefits, and training can be costly. This expense is always high because you need a sufficient number of qualified caregivers to ensure the safety and well-being of the children. You can optimize labor costs by scheduling efficiently, cross-training staff, and monitoring productivity. However, be careful not to underpay or overwork your staff, as this can lead to high turnover and compromised care quality.
- Rent and utilities of your day carePrime locations come with high rent, but they can attract more families. Utilities like electricity, heating, and water are essential but can add up quickly. To optimize these costs, negotiate favorable lease terms and invest in energy-efficient appliances and lighting. Overspending often happens when you choose a location that's too large or too luxurious for your needs.
- MarketingYou need to spread the word about your day care, but advertising can be expensive, whether it's online ads, social media campaigns, or traditional media. Optimize this expense by focusing on cost-effective methods like the ones we provide in our guide. Overspending can occur if you invest in flashy campaigns without a clear return on investment.
- Facility equipment and maintenance costsThis includes everything from playground equipment to classroom furniture. These are expensive because quality equipment and regular maintenance are crucial for safety and satisfaction. Optimize by investing in durable, child-safe equipment and maintaining it regularly to avoid costly repairs or replacements. You can overspend by going for the latest high-tech gadgets you don’t really need.
How to spend less with your day care?
Here are practical tips to help you, as a daycare owner, optimize your budget and manage expenses more effectively.
| Expense | Tips to Optimize |
|---|---|
| Supplies | Partner with local suppliers for bulk purchases of art materials, toys, and educational resources. |
| Staff Costs | Implement a scheduling software to optimize staff hours and reduce overtime. |
| Utilities | Install LED lighting and energy-efficient appliances to reduce electricity costs. |
| Marketing | Run social media contests for your daycare and collaborate with local parenting bloggers for free exposure. |
| Cleaning Supplies | Train staff on efficient use of cleaning supplies to reduce waste and ensure a safe environment for children. |
| Equipment Maintenance | Set up a maintenance log for regular checks and servicing of playground equipment and classroom tools. |
| Rent/Mortgage | Negotiate lease terms during renewal or consider moving to a less expensive location. |
| Insurance | Regularly review insurance policies to ensure they meet current needs and compare rates annually. |
| Snacks and Meals | Use cost-effective, healthy meal plans and offer discounts for parents who provide their own snacks. |
| Furniture | Purchase high-quality, durable furniture that can withstand frequent use by children. |
| Management Software | Choose a daycare management system that offers essential features with low transaction fees and integrates with other systems. |
| Staff Training | Conduct regular in-house training sessions and use free online resources to keep staff updated on best practices. |
| Waste Management | Implement a waste tracking system to minimize waste and encourage recycling among staff and children. |
| Technology | Invest in multi-functional educational tools and utilize daycare management software for attendance and billing. |
| Linen and Laundry | Partner with a cost-effective linen service and consider reusable napkins and tablecloths. |
| Printing Costs | Use digital communication boards or apps for parent updates to reduce printing costs. |
| Licensing and Permits | Stay up-to-date with local regulations to avoid fines and costly renewals. |
| Transportation | Plan field trip routes to maximize efficiency and reduce fuel costs. |
| Office Supplies | Purchase supplies in bulk and go paperless where possible with digital record-keeping systems. |
| Inventory Management | Use inventory management software to track stock levels of supplies and reduce waste. |
| Pest Control | Schedule monthly pest control services and maintain cleanliness standards to prevent infestations. |
| Activities and Entertainment | Use a streaming service for background music and host local entertainers during special events. |
| Uniforms | Choose durable, easy-to-clean uniforms for staff and offer a stipend for maintenance instead of using an external service. |
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Expenses that are just useless for a day care
Yes, some expenses for your daycare are just unnecessary. They don't contribute to enhancing the children's experience or improving operational efficiency.
| Daycare Expense | Reason It's Useless |
|---|---|
| Overly Fancy Decorations | Extravagant decorations don't necessarily create a better environment for children and can be a financial burden. |
| Premium Toys | Unless you are a high-end daycare, most children are happy with mid-range toys that are safe and engaging. |
| Excessive Activity Supplies | Having too many supplies can lead to clutter and waste, increasing costs without adding significant value. |
| High-End Furniture | Top-of-the-line furniture is not always necessary and can be cost-prohibitive. |
| Paper Advertising | Traditional paper ads often have a lower return on investment. Don’t include them in the marketing strategy of your daycare. |
| Multiple Uniform Styles | Having various uniform styles increases costs without adding significant value to the children's experience. |
| Excessive Staff | Overstaffing leads to higher labor costs without necessarily improving care quality. |
| Premium Subscription Services | Expensive subscriptions for music or magazines often go unnoticed by children and parents. |
| Exclusive Snacks | Using rare or premium snacks can inflate costs and complicate supply chains. |
| Costly Play Equipment | High-end play equipment is not always appreciated by children and can be a significant expense. |
| Custom Printed Items | Personalized items like napkins or cups are a minor detail that most parents overlook, and they can be expensive. |
| Unnecessary Software | Paying for software with features you don’t use is a waste of resources. |
| Premium Water Brands | Most parents are content with filtered tap water for their children, making expensive bottled water unnecessary. |
| Extra Transportation Vehicles | Maintaining a larger fleet than needed increases operational costs. |
| Excessive Membership Fees | Paying for multiple industry memberships often yields little benefit. |
| Overly Frequent Renovations | Constantly updating decor and layout can be costly and disrupt operations. |
| Expensive Centerpieces | Elaborate centerpieces are often ignored by children and parents and add to the cost. |
| High-End Tableware | Luxury tableware is prone to damage and expensive to replace, often going unnoticed by children and parents. |
| Excessive Staff Meetings | Too many meetings can reduce productivity and increase labor costs. |
| Expensive Brochure Designs | Frequently redesigning brochures is costly and often unnecessary. |
| Unused Promotional Materials | Ordering more promotional items than needed leads to waste and unnecessary expense. Get our marketing budget planner template. |
| Paid Directory Listings | Many free listing options are available, making paid listings often redundant. |
| High-End Catering Equipment | Specialized catering equipment is often unnecessary and adds to costs without a proportional benefit. |
Stop working with a tight budget for your day care!
Managing a budget for a day care when funds are tight can feel overwhelming. It's like being in a constant state of worry where any unexpected expense can throw everything off balance.
This ongoing pressure makes it nearly impossible to invest in new programs or resources, leaving you always trying to catch up with expenses. It's a life filled with stress and sleepless nights.
Yes, you can continue down this path, cutting corners and just getting by. But there's another part of the equation you might be overlooking. Instead of just trying to cut costs, you can focus on increasing your revenue. More income means more flexibility and more opportunities to enhance your services.
And no, you don't necessarily have to spend money to grow. There are plenty of zero-cost initiatives and strategies that can help you increase your revenue by 10%, 20%, or more. We've detailed all of these strategies in our guides, after studying dozens of day cares just like yours. Get them now!
Make your day care more profitable
We have studied the strategies of the best day cares in the world. All their tactics are explained in our pack!
