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. Continue reading →