In this guide, we're going to focus on a simple approach to a simple, one-year business plan to help keep you on track in a way that is easy to follow and maintain throughout the year. It’s designed to briefly communicate your goals, driven by your current realities – think of it like a roadmap. It is best suited for existing family child care providers or smaller centers. Larger child care businesses or those that are opening a new location or business will likely find that a strategic plan or a more extensive business plan will be of greater value.

Building Your Plan

Remember, you don’t have to build this alone – free business coaches are available to help you with your plan, and many other topics! You can get more information on how to connect with a business coach at: childcare.texas.gov.

Step 1: State your Value Proposition

Your value proposition is simply answering the question, “why you?” It could be as simple as, “Families love coming to Tammy’s Tiny Tots because they love the warm environment, small class size, and that it feels like home.”

Your value proposition is important because it reminds you of why children and families love your service. It is also very helpful as you recruit new families. Value propositions can also help frame some of the important business decisions that you will make such as how you set your rates, attract top talent, and promote your services to enroll more families. You could write pages and pages about these ideas, but in this case, we recommend you use a very simple format to create your value proposition. Specifically, we’d like you to answer three questions:

1. Where do you serve families and children?

This could be in your neighborhood or in your city. Perhaps your reach is wider: across a county or region.

2. What are the age groups that you serve?

Do you serve infants and older? Or maybe only preschoolers? What about after-schoolers?

3. What is it that parents, children, and staff love most about your business?

What is it that makes them come back? This might be you personally. A lot of times people will say that it is the family care provider or the director of a small center who is the one that they come back for. It could be your location, or any other reason that families enroll in your program.

There’s no good or bad answer to this; if you feel like you’re not sure, don’t hesitate to ask some parents. It never hurts to say that you are planning how to further improve the services they’re receiving and would like their feedback. Very simply, this could just be a conversation at pick-up where you say, “Hey, I’m working on how we can improve our services this year. I’m just curious, what do you like most about having your child here? What does [child’s name] like most? Is there anything you wish that we did better? If you've had your child at other centers or home-based care, what do we, or don’t we, do better?

For gathering feedback from staff, you may wish to issue an anonymous short survey or have a comment box to collect this feedback.

These questions can be very helpful in your planning. By starting with your customers and any staff, you are building your plan on the most important foundation, which are the people who are paying for and using your services and those that help you deliver those services. They are not only your customers and staff, but also can be your best salespeople: many child care providers rely primarily on referrals from other families and those they trust, who just may also be your staff.

Step 2: Assess your Current Situation

The next step is taking a look at your business performance and feedback and writing a basic list of what is working well and what you may need to improve. Here are the suggested components of thinking about your current situation:

1. Your customers (families): Understanding what you want to do to support them for the year
2. Your team (staff): Understanding how you can attract and retain staff to keep your program running
3. Your market (competitors, other external factors impacting your goals)
4. Your finances (a financial forecast that helps you know where you’re headed during the year financially and what it’s going to take to get there, such as level of enrollment. You can use tools as a monthly budget and a 12 month cash flow.)

We would recommend you first look at the answers you got from your parents and staff followed by your financials, and answering some simple of these questions:

1. What do parents like most? What did they like the least?
2. What do staff like most? What did they like the least?
3. When you look at your financials, are you going to be profitable? Are you going to make money by the end of the year?
4. When looking at your enrollment forecast, are there any months where you are worried because student enrollment will be down? Are you going to have several children aging out of your care?

What you're doing is not only helping to create your plan for the year, but also to create talking points that you can use as you continue to keep your business running. So now, when you assess the information, some questions you may want to ask are:

1. What is going to keep you profitable throughout the year? For example, do you need more children enrolled now, or maybe mid-year? Will some children exit for kindergarten? How many slots will you need to fill? Do you have a growing wait list? If you’re anticipating growth or are at capacity, do you want to consider expanding?
2. What do parents want and need, and how will you adjust your program services to meet those needs? Are there ways that you can easily meet those needs? Perhaps families want hours that run a little bit later, and you can shift your hours; maybe they want a certain service or opportunity.
3. What about your staff? Do they report wanting additional pay or benefits? Are you having any trouble finding staff?

Step 3: Conduct a “SWOT” Analysis

Once you have assessed your current situation you will want to perform an analysis of the Strengths, Weaknesses, Opportunities and Threats (SWOT) of your business. This is a simple yet very effective way to categorize ideas. Through the SWOT analysis you will divide your data into four sections: whether a factor is positive or negative, and whether it is about the present or the future. The Strengths and Weaknesses are the company’s current positive and negative characteristics. The Opportunities and Threats are potential future factors that can either positively affect or negatively hinder impact and growth.

The goal of this activity is to have a clear vision in each of the areas and to use this insight to as you build your business plan. You will take your whiteboard or paper and divide it into four boxes labeled Strengths, Weaknesses, Opportunities and Threats.

If you have employees, a SWOT analysis as a team will be most effective. Using a whiteboard or large sheet of paper will allow your team to collect and visualize your ideas. Each member of the team should contribute several statements that correspond to each area.

A strength could be, “my business is open for more hours than our competition,” and a weakness could be, “we have issues with staff turnover.” An opportunity could be, “we have room for increased enrollment” and a threat could be, “there is a new business opening nearby.”

Once you have statements for each area, you should consider (or talk about together with your team) which statements are the most relevant. Those relevant statements will provide you with a clear perspective on your organization and allow you to focus as you move to the next step of building your business plan.

Step 4: Use Your Information to Build Your Plan

The last step is building out your plan. We're going to take you step-by-step starting with looking at how the past year went and then looking at how this year may occur. From this, we're going to find goals that you want to undertake to maintain or strengthen your business.

Your SMART (Specific, Measurable, Achievable, Relevant and Time-bound) goals are what will hold you accountable. You're going to have some goals related to what you plan to undertake for the year, but make sure they’re “SMART”. You want your goals to be reasonable and that you don’t have too long of a list that you cannot achieve them, or they feel too overwhelming.

Use the template below to start creating your business plan. Remember, if you would like help, you can sign up for free, individualized business coaching at any time.

Business Plan Template

Introduction and Value Proposition

Now we're ready to start using the plan template to build your plan. First, you developed your value proposition, the “why you”. You’ve gathered valuable feedback from your families and staff and can insert it in a very simple sentence such as:

Example: “I/We serve children and families in [neighborhood/region], [neighborhood/region], and [neighborhood/region] between the ages of [starting age] and [age limit]. What our families and children love most is [value/characteristic 1], [value/characteristic 2], [value/characteristic 3].”

This sentence is very simple, but it's not simplistic; this will give you the ability to remember throughout the year why children and families love coming to see you and staying with you. This will not only help you to remember your program’s value, but again, it will help you reinforce why your program is special as you talk to potential customers and even as you talk to your staff to remind them of what you do.

Our Families

A successful child care business will have a commitment to, and plan in place to, attract and retain its customer base. Here is where you state what you plan to do to support families in the year ahead that will allow you to sustain, or even grow, your business. This should be informed by the feedback that you’ve collected about what families like and what you can improve on.

Example: “Based on feedback we’ve collected, families are looking for [feature 1], [feature 2] and [feature 3]. We are able to meet family needs because we [have the list of features, are located in an in-demand area, have built a client base, etc.]. To further meet the needs of our families and [maintain or increase] program enrollment, our plan is to [added/enhanced feature 1], [added/enhanced feature 2], and [added/enhanced feature 3].”

Our Staff

If you have or are thinking of hiring staff, you should know that a successful child care business will have a commitment to, and plan in place, to attract and retain staff members. This is where you state what you plan to do to support your staff for the year that will allow you to sustain, or even grow, your business. This should be informed by the feedback that you’ve collected about what staff like and what you can improve on.

If you don’t have staff, you should think about how you support yourself and what commitments you make to yourself every day that will help you sustain your business in the long run.

Example: “Based on feedback we’ve collected, child care staff are looking for [feature 1], [feature 2] and [feature 3]. We are able to meet our current and potential staff needs because we [have the list of features, are located in an in-demand area, have built a client base, etc.]. However, to further meet the needs of our current and potential staff and to meet our goals of [maintaining or increasing] program enrollment, our plan is to [staff retention/recruitment strategy 1], [staff retention/recruitment strategy 2], and [staff retention/recruitment strategy 3].”

Our Market

Here is where you will enter your SWOT analysis that was explained above.

Our Financial Plan

You want to include your financial forecast. This includes your annual budget and 12-month cash flow analysis. You want to keep an eye on this throughout the year and make sure that what you predicted is staying on target. And if it isn't, ensure you understand why and adjust accordingly. Your financial forecast should include any increases to enrollment and revenue that you anticipate. It should also reflect the staffing levels, compensation, and benefits that you anticipate.

Our Goals

This is the final section of the business plan that states what exactly you intend to do to improve or expand your business, based on the information that you’ve gathered and assessed and by what date. This gives life to your plan and makes it real and lets you know specifically what it is that you’ll need to do. You can choose to follow the SMART goal format or the three-element format: 1) the what, 2) the how, and 3) how you're going to know that it worked. Both are simple formats but will keep you on track and keep you accountable to getting things done