How to Make a Budget for Your Daycare Business

how to make a daycare budget

Whether you run a daycare business at your home or you’re starting up a new childcare center, one of the most important aspects of success is a reliable budget. Without knowing the numbers in your business, it’s nearly impossible to scale — much less remain organized in so many important tasks.

Maybe you’re wondering why your daycare business is struggling to gain traction. Or maybe you want to make sure your new childcare business will make a predictable profit in the first year of operation. No matter the case, you need a plan. 

Here’s how to make a budget for your daycare business.

What is a Budget?

A budget is a financial spending plan that helps you organize and allocate your money in order to achieve specific goals. Personal budgets prevent you from overspending by listing out your monthly spending obligations such as rent, food, entertainment, luxury items, savings, and home maintenance. 

A business budget is similar to a personal budget but instead focuses on professional objectives. Your childcare business budget might include revenue goals, marketing campaigns, payroll, preparing for taxes, opening a second location, and more.

Creating a daycare business budget prepares you to effectively start your childcare business, attract customers, predict expenses, and utilize profit. Since every daycare center is different in both size and operation, you need to consider all the business factors unique to your daycare before finalizing your budget. 

Why Do Childcare Centers Need Budgets?

Like any other business, childcare centers and daycares need budgets to run smoothly. Your childcare business budget encourages you to continually make more money, even after the costs it takes to operate the business. 

A daycare budget also makes it possible for you to pay your hardworking employees. Without a budget, you wouldn’t be able to calculate a decent pay rate, much less financially strategize your hiring and promotion processes.

Equally as important, childcare center budgets accelerate your business growth. No business becomes successful by accident. It takes a lot of planning, strategic action, and hard work to achieve a significant profit. None of this would be possible without a valid budget, which reveals the exact numbers you’re working with.

Daycare and childcare center budgets guide you in nearly every business decision. You will turn to your budget over and over in every domain of business:

  • Licensure costs and renewals
  • Insurance
  • Equipment and supplies 
  • Employee pay
  • Marketing
  • Technology
  • Cleaning 
  • Health and hygiene 
  • Facility upkeep
  • Accounting 
  • Legal assistance 
  • Emergencies 
  • Teaching and training
  • Social activities
  • Entertainment
  • Other professional demands 

Every aspect of your daycare business has a cost, which is why a budget is so essential. Ultimately, it sets the foundation of your business from startup to success.

How to Make a Budget for My Childcare Business

Now that you know why a budget is so important for your daycare business, here are some crucial first steps toward creating (and following!) a financial plan.

Understand Your Revenue

Revenue is the amount of money earned from your entire daycare business before you consider any costs. Another term for this is “gross sales.” This includes money from:

  • Enrollment
  • Childcare tuition 
  • Core services
  • Fees
  • Grants
  • Optional “premium” services like food, early drop off, and more

In a daycare business budget, revenue is typically calculated on a monthly, quarterly, and annual basis. 

When starting a daycare business, monthly revenue might change as you get used to budgeting and managing everyday demands

However, you can predict monthly revenue by figuring out roughly how much each customer pays you, and multiplying that by your number of customers.

Childcare Center Business Expenses

Expenses are any costs you pay to operate your business. This includes licensure, rent, payroll, utilities, daycare snacks, learning supplies, maintenance fees, insurance, and more.

There are three main types of expenses to be aware of: startup, fixed, and variable. Be sure to go through all possible expenses and include these in your daycare budget.

  • Startup Costs include all the money required to start and open your daycare. Will you run your business at home or at a facility? Do you need to get trademarked? What furniture do you need to buy for your business? How much are the equipment and supplies for your daycare? Do you need funding, such as grants or loans? These are all important startup costs.
  • Fixed Expenses are any regularly recurring business costs such as rent, a mortgage, software subscriptions, insurance, and more. These expenses are predictable and steady, remaining the same from month to month (that’s why they’re called fixed expenses!).
  • Variable Expenses are business costs that vary from month to month. These include staff wages, bonuses, meals and snacks, utility bills, marketing expenses, facility maintenance, housekeeping supplies, legal fees, emergency costs, and other miscellaneous demands.

In your daycare budget, expenses are subtracted from your revenue. The purpose of this is to not only keep track of all the dollars in and out, but to also notice if there’s any overspending. After all, you’re not running your daycare business to lose money: you want to make a profit!  


In your daycare business, profit is the remaining money you keep after paying all business expenses and taxes. With this business profit, you need to be able to pay yourself, set aside enough money for future taxes, and build business savings, which is useful for emergencies and future growth. 

When you do your childcare accounting year after year, you can adjust operations, expenses, tuition costs, and service prices to strategize for growth. It’s extremely helpful to use some sort of digital accounting or budgeting system, as automating this in an organized way saves so much time. 

Childcare Software to Help With Your Business Budget

Whether you start a small daycare from your own home or you open a multi-location childcare center, having the right budget in place is key to your success. Many successful childcare owners today use childcare software to help stay on track with their daycare budget.

Not only can childcare software optimize your budget, but it can also streamline many other areas of your childcare business. From parent billing and invoicing to student learning and assessments, childcare apps make it easy to manage everything in one place.

Daily Connect, the most comprehensive childcare software, was recognized as the ‘Best Value Childcare Software 2022’ by Capterra. If you want to start your daycare center with the tools you need to thrive, Daily Connect is the most affordable solution on the market. 

Create, manage, and operate your daycare budget with Daily Connect. Try out our free trial today.

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