How Do You Create a Budget for a Daycare Center?


Quick Answer

When budgeting for a daycare center, it is important to factor in size of the facility, the number of staff needed, as well as the number of children the program will serve. Be sure to set realistic goals, as these factors will determine the maximum amount of profit the center can make, and will drive most of the budget and business decisions. The budget should be built around a basic mathematical equation of incomes received, minus the operating costs equals profit.

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How Do You Create a Budget for a Daycare Center?
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Full Answer

To write a budget for a day care business, it must be decided on what the long term financial goals are. A day care budget depends on the number of full-time and part-time spaces available, filled and left vacant. Establish the maximum that each filled full-time or part-time space is worth in revenue, to understand the center's income potential.

According to the Inc website on budgeting, the key parts of a budget are: revenues, costs or expenses, profits and cash flow. The budget should be drawn up on a yearly basis. A yearly budget is divided up into twelve months. It is ideal to leave blank spaces next to each month to allow for the actual results to be posted as the year progresses. Next to the actual results, a difference column can be added to see the exact difference between the budgeted amounts and the actual business transactions.

The operating expenses need to be calculated. The day care financial statements from the previous year provide a reliable estimate and good starting point. The gross profit margin needs to be calculated next: This is done by subtracting the cost of services provided from the overall revenue.

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