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In addition to the caregivers, you will need to hire a manager as well as a support team for operations (human resources, finance, etc.). Day care teachers earn an average annual salary of $52,000 Management salaries This translates to about $35,000 – $40,000 in salary costs each month (including 20% for taxes and benefits). Day care teachers instead were paid an average annual salary of $52,000.Īssuming you keep a ratio of children / caregivers or 5:1, you will need to hire 10 employees. The average annual gross salary for Day Care caregivers is $30,520 in 2022. To provide the highest quality of care and life to the children, you need to hire an adequate number of efficient staff who care for your residents regularly without failing or negligence. Staff costs are the largest expense for a child care center. These utilities would cost around 25-30% of your rent, so an additional $2,000. facility.īesides the rent, you also have to pay utility bills (gas, water, electricity, phone). Using the above example, you’ll have to pay for $7,500 in rent each month for a 7,000 sq. If you’re leasing your child care center, you’ll have to pay a monthly rent which will vary according to the size and location of the real estate. Other (bookkeeping, security, housekeeping, etc.) child care facility with 50 children: For more information on how much it costs to start and run a day care business, read our complete guide here. We have outlined below a brief overview of the operating costs you can expect for a 7,000 sq. The operating costs will vary slightly depending on the size of your child care center and the amenities (indoor and outdoor playground, sleeping area, etc.). Forecast ExpensesĪpart from the one-time startup costs you need to pay before opening your day care center, you should also budget the recurring or operational costs you’ll pay monthly to run your business. Now, we can easily calculate revenue from the 3 different segments we have set up earlier (toddler, pre-school and primary school): Source: Day care financial model 4. Pricing assumptions can be set as shown in the example below: Source: Day care financial model The percentage of families who pay monthly vs.The average number of hours per week for those who choose a price per hour and.With that in mind, we also need to set 2 additional assumptions here: Price per month for families who prefer a fixed rate for taking care of their children the whole month (say $2,500 a month).Price per hour for families who need more flexibility (e.g.For day care businesses there is usually 2 different prices: Now that we have estimated the number of children we expect to take care of in the future, let’s now look at how much revenue we can generate for the business.Īs explained earlier, the 2nd driver to revenue is pricing. With these assumptions set, we can now forecast the number of children over time as shown in the chart below: Source: Day care financial model 2. See an example below: Source: Day care financial model
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toddler, pre-school, primary school) and over time (over the next 5 years). For example, if a room is at 75% occupancy rate, it means there are only 4 children in a room with a maximum capacity for 5 children.Īll these parameters can either be set for the day care business as a whole, or instead we can have separate assumptions for each child category (e.g. The capacity per room (say, 5 children per classroom) and.The number of rooms (classrooms) you have and.Let’s first forecast the number of children, it is the result of: The first step of any financial model is to forecast the main driver to your revenue: what moves up or down revenue? For day care, it’s either pricing or the number of children. In this article we’ll explain you how to create powerful and accurate financial projections for a child care facility with 50 children. Whether you want to understand what’s your breakeven, your valuation or create a financial model for the business plan of your day care, you’ve come the right way.