IndustriesDaycare
A daycare business plan that starts from licensed capacity
Childcare revenue has a hard ceiling set by licence: children per room, square feet per child, and staff-to-child ratios by age. A plan that forecasts past its licensed capacity is forecasting something it is not permitted to do.
Written for an SBA or bank loan, which is where most plans in this sector goNAICS 624410
Where the money goes
Typical shares of revenue in this sector. Shown as a starting point to argue with, never as a target to hit — your own figures replace all of these at intake.
- Staff
- 50%
- Ratios are legal minimums, not a choice. Infant rooms are the most expensive and the least profitable.
- Occupancy
- 14%
- Square footage per child is licensed, so space cost scales with enrolment capacity.
- Food and supplies
- 7%
- Often partly offset by a food programme subsidy where eligible.
- Insurance
- 3%
- Liability plus abuse and molestation coverage, which is separately underwritten.
A worked model
One plausible daycare, built out in full.
Not an illustration. These assumptions were run through the same engine the product uses, and the plan review was run over the result. It is here so you can see the shape of the answer before you start.
- Year 1 revenue
- $480.1K
- Year 3 revenue
- $1.2M
- Operating profit from
- Month 8
- Year 3 net margin
- 7.5%
- Coverage, first full year
- 2.40×EBITDA less tax, over debt service
Balance sheet ties in all 60 periodsNo blocking findings — this model would exportLowest cash $30.8K in month 12
The revenue build
Not a growth rate. These are the drivers a reader can argue with, which is the only kind worth putting in a plan.
Enrolment
Recurring subscription
- Opening customers
- 14
- New per month
- 5.0
- Price per month
- $1,350
- Monthly churn
- 3.0%
- Billed up front
- 1 month(s)
- Cost of sales
- 7.0%
Sixty months of it
Monthly revenue against monthly EBITDA. Both are flows, so they share an axis honestly — plotting a cumulative cash balance beside a monthly figure would flatten the one that matters. The cash trough is in the strip above.
- Monthly revenue
- Monthly EBITDA
Year by year
| Year | Revenue | EBITDA | Net income | Closing cash |
|---|---|---|---|---|
| Year 1 | $480.1K | -$95.3K | -$152K | $30.8K |
| Year 2 | $1M | $105.4K | $50.4K | $105.1K |
| Year 3 | $1.2M | $146K | $93K | $207.3K |
| Year 4 | $1.3M | $170.3K | $96.3K | $310.6K |
| Year 5 | $1.2M | $111.6K | $50K | $365.3K |
Sources and uses: $260K debt, $150K owner capital, $280K of fit-out and equipment. 15 people on the payroll by month 36.
Against the childcare and daycare band
Benchmarks warn; they never overwrite. An assumption outside the band is flagged with its source so you can justify it — substituting an industry median would destroy the specificity that makes a plan credible.
- Gross margin
- 45.4%in band
- 45.0%median 56.0%70.0%
- Net margin
- 7.5%in band
- 2.0%median 8.0%15.0%
Source: Early education operating data, 2026 · NAICS 624410 · secondary tier. Secondary-tier bands are usable as ranges, not as something a lender will read; where a figure has to survive scrutiny we substitute RMA Annual Statement Studies or IRS SOI data. Ratio-mandated staffing is the binding constraint; margin follows enrolment and tuition, not cost control.
What they will ask first
A plan that answers these before they are asked reads as competent. One that does not gets sent back with them attached.
- What is your licensed capacity by age group?
- Infant, toddler and preschool places have different ratios, different prices and different costs. A single blended capacity hides the economics entirely.
- What enrolment do you assume, and how fast do you get there?
- Full enrolment in month one is not credible. Most centres take nine to eighteen months, and the cash trough is in that window.
Where these plans get sent back
Staffing ratios as a hard floor
You cannot trade below ratio, so a staff shortage closes a room and the revenue with it. This is an operational and a revenue risk at once.
Licence conditions changing the build
Square footage, egress and outdoor space requirements routinely add cost after a lease is signed.
Licences and filings to budget for
These belong in the use of funds, not in a footnote. A missing permit line is the cheapest possible reason to be sent back.
- State childcare licence, with capacity set room by room
- Background checks and clearances for every adult on site
- Staff-to-child ratios and qualification requirements by age group
- Fire, health and playground safety inspections before opening
Requirements vary by state, county and city, and they change. Treat this as the list to go and verify locally rather than as legal advice — the product tracks the dated ones as configuration with a source and an effective date, and prints which version it assumed.
Start from these defaults, then make them yours.
The intake pre-fills this sector’s drivers and tags each one as your figure or an industry default — and says which in the finished plan.