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Daycare Center Business Plan Template With Examples

Apr 14, 2024 | Business Plan Templates

This template is designed to be flexible. Feel free to modify it to suit your daycare centre’s unique characteristics and needs. Remember, a compelling and well-structured business plan is critical to attracting potential customers and investors, securing funding, guiding your business’s operations, and tracking its progress.

Starting and running a daycare centre requires a perfect blend of a passion for child care, business acumen, and robust teamwork. This business plan serves as a roadmap in this journey, helping you make informed decisions and drive success.

Table of Contents

1. Executive Summary

This section provides an all-encompassing overview of your daycare centre. Although listed first, writing this part last may be most helpful to ensure every vital detail from your daycare business plan is included.

Introduction

Begin by introducing your daycare centre, including its name and core mission. This information should be presented compellingly and engagingly.

Example: Little Starts Daycare is a childcare centre dedicated to providing a safe, fun, and nurturing environment where children can learn, grow, and explore.

Center Overview

Provide an overview of your daycare centre, including the type of services offered and any major initiatives you’ve undertaken or plan to take.

Example: Little Stars Daycare is a licensed childcare provider offering full-time and part-time care for children ages 2 to 5 and after-school services for children up to 12.

Mission and Vision Statement

Define your daycare’s mission and vision statement. This income statement will communicate your daycare’s purpose and strategic objectives and share the commitment to child care and their holistic development.

Example: Our Mission is to provide children with a safe, stimulating, and caring environment. Our Vision is to nurture young minds in their early years by providing a firm foundation for lifelong learning.

Geographic Reach and Accessibility

Explain where your daycare is located, noting the communities you serve and your location’s convenience.

Example: Located in the heart of Springfield, our daycare is conveniently accessible for families in the central city and nearby neighbourhoods.

Program Type

Describe the programs your daycare offers, whether you cater to toddlers, preschool students, or after-school care, providing details.

Example: Our centre provides preschool education with a structured curriculum, toddler programs with an emphasis on social interaction and primary learning, and after-school programs to assist with homework and provide extracurricular activities.

Key Goals and Objectives

Clearly specify what you intend to achieve in the short and long term. Ensure these goals are SMART—Specific, Measurable, Achievable, Realistic, and Time-bound.

Example: Our short-term goal is to increase our enrolment by 30% in the upcoming year without compromising the quality of our service. In the long term, we aim to establish an exemplary reputation in the area that may allow us to expand to multiple locations.

2. Daycare Services Offered

This section details your daycare centre’s specific services, objectives, and impact on the children and families served.

Service Definition and Themes

Describe the services your daycare provides in detail. Discuss underlying principles or themes guiding your programs and the kind of expertise involved in delivering them.

Example: At Little Stars Daycare, we provide three main services: Toddler Care, Preschool Program, and After-School Service. Each service is designed with a specific age group in mind and tailored to meet their intellectual, physical, and emotional developmental milestones.

Range of Services

Detail the various services you offer under each program in your daycare centre. Highlight significant elements of these services that set your childcare centre apart.

Example: Our Toddler Care program includes interactive playtime, basic etiquette training, and early learning activities. The Preschool program preps children for school with a curriculum focused on cognitive and emotional development. Our After School services provide a safe environment with homework assistance and extracurricular activities.

Beneficiary Profile

Explain who benefits from your daycare services, how they are selected, and why they are the focus of your efforts. This should be detailed, and your target audience and market should be clearly understood.

Example: Our beneficiaries are primarily families with working parents who need reliable, quality care for their children during workdays. We cater to children ranging from toddlers and preschoolers to school-aged kids needing after-school care. Our services are crucial for working families seeking a safe, nurturing environment that fosters their children’s development.

3. Background and Ownership

This portion presents an insight into the establishment background of your daycare centre and its administrative structure.

Legal Status and Organisational Structure

Specify your daycare centre’s legal status. Is it a Sole Proprietorship , a Partnership , a Limited Liability Company (LLC), or a Corporation? Why was this structure chosen?

Example: Little Stars Daycare operates as an LLC due to the liability protection it provides. In this setup, the owner’s personal assets are protected in case of any legal claims.

Board of Directors or Management Team

Briefly introduce your management team, highlighting their backgrounds and roles in the daycare centre. Mention their key contributions to the daycare.

Example: Our management team consists of the owner-director, Mrs Johnson, a former elementary school teacher; our operations manager, Mr Green, who has a background in child psychology; and Mrs Smith, our curriculum coordinator, who holds a degree in early childhood education.

Established Milestones

Exhibit significant milestones in your daycare centre’s history to demonstrate its progress and growth over time.

Example: Little Stars Daycare, established in 2015, started as a small in-home service. Due to growth, we moved to a larger, dedicated facility in 2017. In 2019, we expanded our services to offer after-school programs and currently serve 50 families in the Springfield area.

4. Business Model

This portion management team section outlines how your daycare centre operates and generates income to maintain its functions and services.

Primary Revenue Channels

Discuss your daycare’s central sources of income. This could entail the fees charged for different programs, early drop-off/late pickup surcharges, or any additional services offered.

Example: Our main revenue sources are the weekly fees charged for toddler care, preschool, and after-school sessions. Supplemental income is also generated from optional services like early drop-off, late pickup, and special weekend care services.

Potential Collaborations/ Partnerships

Detail any potential collaborations or partnerships. These could involve other businesses, schools, government institutions, etc.

Example: We are considering partnerships with local schools to offer seamless after-school services. Additionally, we are exploring opportunities to collaborate with nearby businesses to provide daycare discounts for their employees.

Special Programs or Services

If any special programs or initiatives are planned for the future that may bring substantial funds or support to the daycare, mention them.

Example: We are planning to introduce a “Summer Camp” service during school holidays that promotes learning through fun activities. This provides a solution for parents during the break and generates additional revenue for our centre.

5. Market Analysis

This section offers insights into your daycare’s market environment, customer demographics, and your centre’s competitive positioning.

Current Demand

Explain the current demand for daycare services in your area. Use any relevant data, statistics, or examples to support your point.

Example: According to recent data, there are approximately 4,000 children under the age of six in our target area, with 70% of both parents working full-time. This strong demand for daycare services indicates a promising market for Little Stars Daycare.

Customer Demographic Analysis

Detail the demographic information of the families you intend to serve, including their geographical location, socioeconomic status, or other relevant characteristics.

Example: Our primary customers are dual-income families within a 5-mile radius of our facility. Most of these families fall into the middle to upper-income brackets and value high-quality childcare and educational opportunities for their children.

Competitive Landscape and Unique Selling Proposition

Identify other daycare centres or similar service providers in the area and analyse their pricing strategies and features. Highlight what differentiates your daycare centre.

Example: Although there are two other daycare centres in our vicinity, Little Stars is the only one to offer extended hours, catering specifically to working parents with schedules outside the typical 9 to 5. Additionally, our preschool program emphasises developmental learning, unlike the play-based focus of our competitors.

Market Strategic Positioning

Describe how your own daycare industry is positioned concerning the current market demand, customer demographics, and competition. Discuss your plans to deliver your services in a way that meets your customers’ needs and stands out from competitors.

Example: Little Stars is positioned as a high-quality, convenient solution for working families in need of childcare services. Our strategy involves providing academically focused, individualised programs coupled with flexible hours to meet the unique needs of working parents.

6. Public Relations and Marketing Strategy

This section outlines how you plan to increase awareness about your daycare centre and attract families to your service.

Public Relations Approach

Describe your business concept and strategy to achieve visibility and positive recognition in the community.

Example: Our PR strategy involves regular community events like fun fairs, open days, and reading clubs. We also plan to issue press releases announcing milestones or new services in our centre and seek coverage in local news outlets or parent groups.

Marketing Plan

Outline your marketing strategy, including traditional and online channels — and any unique campaigns or promotions you plan to run.

Example: Our marketing strategy consists of the distribution of brochures in local businesses and schools, online advertising on parenting blogs and forums, social media campaigns around enrolment periods, and maintaining a well-optimised website detailing our services.

Community Engagement & Volunteer Programs

Discuss how you plan to engage the community in your daycare’s activities. This could involve organising community events, parent evenings, or volunteer opportunities.

Example: We plan to actively involve the community with events like an annual Family Day Picnic, parenting workshops, and volunteer opportunities within the centre. This strategy serves to strengthen our relationship with the community and increases visibility for our daycare.

7. Operations

This section provides an overview of your daycare’s business plan, outlining daily operational practices, staff recruitment, technology needs, and facility requirements.

Staff Recruitment and Roles

Discuss your approach to staffing your daycare. This includes the necessary roles, the experience or qualifications required, and your future hiring plans.

Example: We plan to staff our daycare with certified childcare professionals for roles like Lead Daycare Teacher, Assistant Teacher, and Cook. We intend to hire additional staff as our enrolment increases. All teaching staff are required to have an associate degree in early childhood education or a related field.

Management Roles

Detail the management roles in your daycare centre, the responsibilities, and the skills required for these roles.

Example: Our management team comprises the daycare centre director, who oversees the overall operations; an office manager, who oversees administrative duties; and a program coordinator, who plans and reviews all daycare activities.

Technology Requirements

Discuss the type of technology your daycare centre uses or needs. This could include scheduling software, communication tools, or child progress-tracking applications.

Example: We use childcare management software for seamless scheduling, billing, and parent communications. We also use a separate application for tracking child progress and activities, accessible to both staff and parents.

Facility Requirements

Specify any facility needs you have. This might include a dedicated daycare building, a playground, classrooms, a kitchen, etc.

Example: Our daycare currently operates from a dedicated centre equipped with well-furnished classrooms, a play area, a dining area, and a kitchen. With our projected growth, we anticipate needing additional classroom space and possibly expanding our outdoor play area within the coming years.

8. Marketing and Communications Strategy

This section discusses how your daycare centre plans to market its services to prospective parents and maintain open and consistent communication with current clients.

Marketing and Community Outreach

Describe your plans to increase your daycare centre’s visibility within your community and potential clients.

Example: We plan to increase our daycare’s exposure by participating in local community events and establishing partnerships with local schools and businesses. We also intend to launch promotional campaigns during key enrollment periods to attract new families.

Online Presence

Discuss your daycare’s online presence. This can include your website, any social media platforms you use, and how you utilise these channels.

Example: We maintain an interactive and informative website detailing our services, staff, and enrolment processes. In addition to our website, we regularly update our social media platforms, uploading images of daily activities and upcoming events at our centre.

Customer Engagement

Explain how you plan to engage with the families of children in your care. This can include parent-teacher meetings, newsletters, social events, and more.

Example: We engage with parents through regular parent-teacher meetings, a monthly email newsletter, and inviting families to participate in our community events like the annual Family Day Picnic. Establishing strong relationships with our parents is integral to our daycare’s strategy.

9. Financial Plan

This section offers a detailed look at your daycare’s financial circumstances and plans, showcasing how funds will be sourced and used.

Startup Budget or Current Annual Budget

Provide an overview of your expected budget, detailing both income and expenses.

Example: Our annual budget for this year is $300,000, with the majority of funds allocated towards staff salaries, facility maintenance, activities, and supplies. The remnant is allocated for marketing, administration, and unexpected expenses.

Proposed Financial Projections

Discuss your predicted financial situation. These should include expected income from fees, any grants or loans, and how you plan to allocate these resources.

Example: We expect our primary income to come from our own childcare business plan, with fees accounting for 90% of our revenues. We also aim to secure a grant for educational toys and supplies, making up the remaining 10%. Our largest expenditure is staff salaries, followed by facilities costs and supplies.

Key Financial Assumptions and Explanations

Clarify any assumptions made about financial statements in your financial plan and explain why these assumptions have been made.

Example: We assume a 10% increase in enrollment for the upcoming year, which we believe is a conservative estimate based on current trends and inquiries. We also expect a steady increase in operation costs due to inflation and potential expansion plans.

10. Appendices

This section includes supplementary documents or materials that support the details of your business plan.

Organisational Chart

Include a visual layout of your daycare’s structure, representing the roles and departments within your organisation.

Example: Our daycare’s organisational chart clearly differentiates among management, full-time staff, part-time staff, and volunteer roles to give a comprehensive understanding of our organisational structure.

Resumes of Key Staff Members

Attach resumes or create a brief biodata of central team members to offer insights into their skills, expertise, and experience relevant to the daycare environment.

Example: We’ve included the resume of our Daycare Center Director, who has a Master’s Degree in Early Childhood Education and over ten years of experience in daycare management. This demonstrates her ability to administer our programs effectively.

Detailed Budget

Include a copy here if your financial plan refers to an intricate budget.

Example: We’ve attached a detailed breakdown of our annual budget, reflecting our conscious and effective allocation of resources that ensure the smooth running of our daycare centre and prioritise the quality of child care and education.

Related Market Research

Incorporate any market analysis or research that testifies to the need for your daycare centre’s services.

Example: We’ve incorporated a recent demographic study on our target area, indicating the high number of families requiring reliable daycare services, reinforcing the demand for our centre.

What are the Factors to Consider When Starting a Daycare?

When starting a daycare, there are several critical factors you need to consider:

1. Location: Your daycare should be located in a safe, clean and accessible area that is convenient for parents to drop off and pick up their children.

2. Safety: It’s crucial to ensure your daycare facility complies with all safety guidelines and health regulations and has appropriate safety measures in place to prevent accidents.

3. Licence and Certification: Procure all necessary licences and certifications to operate a daycare centre legally in your region.

4. Qualified Staff: The quality of your staff significantly impacts the quality of your daycare. Recruit staff with appropriate qualifications, experience, and a genuine passion for the childcare industry.

5. Affordable Rates: Your service rates should be competitive, offering good value for your clients while ensuring your business is financially viable.

6. Age-appropriate Programs : It is critical to offer programs that are tailored to different age groups and address their specific developmental needs.

7. Capacity: Check the restrictions on the number of children you can have in your care at any given time in accordance with local regulations.

8. Insurance: Having sufficient insurance is paramount to protect your business from liability claims.

What Elements Make Up a Quality Daycare?

Creating a quality daycare goes beyond meeting minimum state licensing requirements. Here are some elements that contribute to a top-tier daycare:

1. Positive Environment: Your daycare should have a welcoming, warm, and stimulating setting that promotes children’s creativity, learning, and comfort.

2. Well-trained Staff: In addition to having the required qualifications and training, staff should exhibit patience, caring, and passion when dealing with children.

3. Child-Friendly Facilities and Equipment: Adequate, safe, and age-appropriate facilities and equipment aid children’s learning and development.

4. Low Child-Staff Ratio: This ensures each child gets the necessary attention and supervision, thus contributing to more personalised care.

5. Structured Activities: A well-planned curriculum that balances educational, creative, and recreational elements supports child development.

6. Healthy Food and Snacks: Offering nutritious meals fosters the physical health and well-being of the children.

7. Parental Involvement: Maintain active communication with parents and caregivers, keeping them updated on their child’s progress and involving them in the centre’s activities.

8. Security Measures: Implementing rigorous measures such as secure entrances, visitor policies, and child pickup procedures ensures children’s safety.

By following this daycare business plan template above, you’ll be well on your way to setting up a profitable daycare that provides top-quality care for children. Thorough research, careful planning, and attention to detail are the keys to a successful child care business.

Wrapping Up Our Daycare Centre Business Plan Template

In conclusion, this business plan template provides a comprehensive framework to guide you in crafting a business plan for a daycare centre. It covers essential areas like executive summary, services offered, business model, market and industry analysis, financial plans, and more.

By following the structure and accompanying examples, you will understand your own daycare business’s unique selling proposition, target market, and competition and define its goals, strategic positioning, and plans for growth and sustainability.

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How to Write a Business Plan for Daycare and Preschool

• brightwheel
• Running a business

Writing a daycare or preschool business plan is a big task, but due diligence and hard work will help you understand what you’ll need to launch and run a daycare or preschool successfully.

What do daycare investors want?

Your local government will have rules and regulations you’ll need to follow as a small business owner and childcare provider. Start by reviewing the childcare licensing guidelines for your state and city. Once you’re clear on licensing guidelines, you’re ready to start writing your childcare business plan.

The purpose of a business plan is to help secure funding. You’ll likely need financing to launch your preschool or daycare, especially if you want to avoid the monthly repayment of a loan. 

Investors provide businesses with money in exchange for partial ownership. As a result, they expect a larger return on their initial investment. Because many investors work in business, they prefer to invest in an established company.

Most investors look for:

Industry background and experience

Financial performance and promise.

Investors want to make money. Therefore, they are more inclined to work with experienced entrepreneurs and business owners to guarantee a return on their investment. 

This might sound discouraging for those with little experience or without a business management background, but the opportunity doesn’t end there. You could consider bringing on a partner with a business background. Additionally, many investors act as a source of business advice. 

You need to demonstrate that your business will make money. Investors will likely want to see signs of business growth before they give you money. 

Additionally, investors will want to know about your financial stability. Questions an investor might ask are:

• What do you plan to do with the money?
• Has your business been up or down in recent years?
• Is your company losing money? Are there signs of growth for the future?
• How do you plan to repay your investment?

Of course, every investor is different, so they’ll consider various factors. While experience and financial promise are at the top of the list for most investors, they might also look for uniqueness, business readiness, an effective business model, and more.

Writing a daycare business plan

We’ve discussed licensing and investors. Now, you’re ready to begin the framework of your business plan for daycares and preschools. Here’s what you’ll need to get started:

Business description

Needs assessment, insurance policies, operating policies and procedures, marketing strategy.

Start with the basics: what does your daycare do? Detailing the service you’re offering will help you create a clear business plan. Next, you might want to write some goals or even a mission statement outlining your purpose and motivation.

Start by looking at general daycare or preschool industry trends, then narrow your scope to the preschools or daycares in your local area. Next, you’ll need to figure out who your target customers are and confirm that there is a need for a business like yours in your community. 

Are there a lot of young families in your neighborhood? Are you located somewhere convenient for commuting parents? Does your business offer a specific service that your competitors don’t, like early check-in or extended hours? 

Also, check out the competition. Research the existing daycare or preschool options in your community. Look at current preschool or daycare business plan samples. What makes your daycare or preschool unique? 

Developing detailed budgets will help you run your small business. You’ll need to compare your current cash flow and expenditures to determine whether you’ll make a profit.

Build a budget for unexpected costs. For example, how many children do you need to serve to be able to pay your bills and stay afloat? Child Care Aware of America offers some terrific budgeting resources for this process.

Depending on the type and size of your preschool, you’ll need insurance policies of several different types, including liability, property, workers’ compensation, and business insurance. Check the licensing requirements for guidance in building this part of your preschool business plan.

Create a comprehensive handbook for families and staff that includes you center's policies and procedures. For instance, you'll need to develop an emergency plan , daycare sick policy , and other safety protocols according to your local childcare licensing requirements. 

Your staff handbook will be a helpful resource your employees can reference and include all your employment policies including work and pay schedules, benefits, and information about professional growth and development. You can also include information on your center's philosophy and curriculum, classroom procedures, and expectations for working with children and families.

Your marketing strategy is the key to attracting customers. Decide what type of advertising you will use in front of potential customers. For example, list your school in local directories and participate in parenting and kid-friendly community events. Run a social media campaign focusing on your target population.

Another big part of childcare business marketing is differentiating yourself from other preschools. These days adopting daycare software is a surefire way to attract families with young children. A tool like brightwheel's center management feature will streamline your center's admission process, record keeping, and reporting, saving you up to 20 hours per month. 

You can also use brightwheel for recording and tracking daily events and activities, and sending real-time updates to families throughout the day. It also offers secure, digital check-in/check-out and a paperless billing system. This is a great way to keep your families looped in on daily activities and handle all of your administrative tasks in one place.

Your business is ready!

Writing a business plan can be stressful, but it doesn’t have to be. Once you secure the proper licensing, use the information in this article to guide you through creating a solid daycare business plan that drives investors and financing to your business.

These are just the basics to get you started. For further information, the U.S. Small Business Administration’s website has detailed instructions on creating each necessary part of a successful business plan. 

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500+ business plans and financial models

How to Write a Business Plan for a Daycare: Complete Guide

• January 30, 2023

👇 Check all our resources on daycares 👇

Whether you’re looking to raise funding from private investors or to get a loan from a bank (like a SBA loan) for your daycare, you will need to prepare a solid business plan.

In this article we go through, step-by-step, all the different sections you need in your daycare business plan. Use this template to create a complete, clear and solid business plan that get you funded.

1. Executive Summary

The executive summary of a business plan gives a sneak peek of the information about your business plan to lenders and/or investors.

If the information you provide here is not concise, informative, and scannable, potential lenders and investors will lose interest.

Though the executive summary is the first and the most important section, it should normally be the last section you write because it’s the summary of the different sections included in your business plan.

Why do you need a business plan for your daycare?

The purpose of a business plan is to secure funding through one of the following channels:

• Obtain bank financing or secure a loan from other lenders (such as a SBA loan )
• Obtain private investments from investment funds, angel investors, etc.
• Obtain a public or private grant

How to write an executive summary for your daycare?

The executive summary of your daycare business plan should include the following important information:

Business Overview

Introduce your company (its name, its mission) and the history behind it: why did you decide to create a daycare in your area today? Why you? 

Also, that’s where you should expand on the business: where will the daycare facility be located? How old are the children you target? How many children will you be able to take care of? What are the amenities (classrooms, playground, cafeteria, etc.)? 

Market Overview

Provide here a deep market analysis that backs your decision to open a daycare business in your area today. Why would your business succeed given current market conditions? 

For example, the market analysis should include information like: what are your competitors in the area? What are their characteristics, strengths and weaknesses ? Who are your target audience (parents and children)? Is that in line with the demographics in your area?

Management & People

Who is the management team? What is your/their experience in the daycare industry?

Financial plan

What is your expected revenue and profitability for the next 5 years? When do you expect to break-even? Simply include here a chart of your key financials (e.g. Revenue, Gross Profit, Net profit )

Funding Ask

What loan/investment/grant are you seeking? How much do you need? How do you intend to spend the money?

Daycare Financial Model

Download an expert-built 5-year Excel financial model for your business plan

2. Daycare Business Overview

The business overview section of the daycare business plan summarizes the basics of your facility, including the background information, business model, services, target audience, and legal structure. 

a) History of the Project

When you launch a daycare business, you want it to grow and even become the best in the region if possible. One small element that can catalyze your company’s growth is its history. You don’t have to exaggerate the information here, but try to include useful details that will make your daycare business stand out. 

For a business as sensitive as daycare, trust overrides anything else. So, make sure to include in your business plan your experience and passion for children to demonstrate to investors you are qualified and the right person to successfully run a new daycare facility.

Also, flesh out the history behind the project: why are you starting a daycare now? For example, you may have noticed a lack of child care services for toddlers and infants in the city.

b) Business Model

Next up is the business model. This is the revenue-generating plan that identifies how your business operates. A daycare business model should be succinct and address specific things about the business. 

For instance, is it a commercial daycare facility or a family daycare? Is it an independent facility or a partnership? And should you opt for a daycare franchise? 

Keep in mind that daycare facilities vary by the target age group. So, you can opt for a childcare center, a family daycare, a kindergarten/pre-school, or a nursery school.

c) Daycare Services

It takes a lot to raise a child. So, be clear on the services you want to offer in your newly founded daycare facility. The quality of services will make your business more attractive. But an even bigger factor will be the type of services you provide at the facility.

Indeed, a lot happens inside a daycare facility, from hands-on learning (classrooms, private tuition) to field trips, games and community events. 

d) Pricing Strategy

Age is a key factor when setting the prices of your daycare services. On average, parents across the US pay about $9,400 per year on child care per child. Of course, the actual figure will vary based on a number of factors, but this is a great starting point when getting into the industry. 

An accurate pricing strategy can help you outshine your biggest competitors. However, don’t forget that setting cheaper prices isn’t necessarily the best strategy, just in the same way overpriced services may turn off potential clients. 

e) Target Audience

Daycare centers are so named because they are about a child’s well-being. However, the final decision rests with the parents, who must buy into your idea and long-term vision for the facility. 

For this type of business, you have a definite target market . And all you have to do is ensure your facility is closer to a busy neighborhood with many children. Find out if the families truly need child care services, why they need these services and the children’s average age. 

Finally, make sure your services are aligned with your target audience. For example, you wouldn’t necessarily succeed with a daycare operating 9am – 4pm in an area where parents typically work long hours in the city and need time to commute back to their neighborhood to pick up their kids.

Same goes for pricing: if you offer high-quality expensive daycare services, make sure your daycare is either located close to offices or in an area where affluent parents work or live.

f) Legal Structure

Finally, your business overview section should specify what type of business structure you opt for. Is this a corporation or a partnership (LLC)? Who are the investors? How much equity percentage do they own? Is there a Board of Directors? If so, whom? Do they have experience in the industry?

3. Daycare Market Overview

In the market overview section of your business plan, you must cover 2 important areas:

• Market trends : how big is the daycare industry in your area? How fast is the market growing? What are the trends fuelling this growth (or decline)?
• Competition analysis : how many competitors are there? How do they compare vs. your business? How can you differentiate yourself from them?

a) Daycare Market Trends

How big is the daycare industry in the us.

It’s always helpful to base your business decisions on the latest trends in the US market. For instance, the US daycare market had a value of approximately $54.3 billion in 2019 . And it is projected to grow at an annual rate of 3.9% from 2020 through 2027. 

According to reports, the high number of parents occupying full-time and part-time jobs is a major driving force behind the increasing demand for daycare services. No matter how you look at it, these statistics make the daycare business even more lucrative, provided you get all the basics right through your business plan. 

How big is the daycare industry in your region?

After the US, assess the size of the daycare market in your city or area. Focus on the zone where you plan to offer daycare services.

Naturally, you might not be able to get the data for your specific city or region. Instead, you can estimate the size of your market, for more information on how to do it, read our article on how to estimate TAM, SAM and SOM for your startup . To give you an example, let’s assume you plan to operate in an area where there are already 10 competitors:

As we know the US daycare industry is worth $54 billion today, and there are about 230,000 child care centers , therefore the average annual turnover per child care center is around $235,000.

Now, we can safely assume that the daycare industry is worth $23 million in your area (10 centers).

How fast is the daycare industry growing in your region?

Growth is an important metric for assessing the status of the daycare industry in your region. 

Here if you don’t find information online or via your research, you can calculate growth using the total number of competitors in your area. 

For example, assuming there were 8 daycare competitors in the region in 2018, and 10 in 2022, the annual growth rate is 6% per year.

b) Daycare Competitor Analysis

At the very least, your competitor analysis should answer all the questions below:

• How many daycare businesses are the area where you plan to open yours?
• What type of daycare businesses are there: home-based vs. center-based home care, early care vs. early education & daycare, etc.
• What age range do they specialise in?
• What services do your competitors offer?
• What amenities do your competitors have (playground, classrooms, etc.)
• What’s their average price (daily rate / monthly rate)?
• What is the child / staff ratio of your competitors?

4. Sales & Marketing Strategy

For some existing daycare facilities, marketing isn’t the most important aspect of running the business. But you’ll probably have to implement a few marketing strategies at the beginning to attract the first families , especially if you’re starting a new daycare facility.

a) Daycare Market Channels

A daycare business doesn’t have diverse marketing channels like retail stores or other businesses. So, this may limit your options when it comes to new marketing channels. 

Apart from word of mouth, other marketing channels include;

• Social media
• Online listing (Google business, Facebook business page)
• Word-of-mouth

b) What are Your Unique Selling Points (USPs)? 

Daycare facilities offer pretty much the same services, and it’s not easy to stand out from the competition. However, a few factors can be useful when evaluating your opportunities in a competitive market, including:

• Target age group : You may cover a unique age group as opposed to your competitors
• Opening hours : you may offer longer opening hours to accommodate for different parents’ jobs and availabilities
• Price : Your services may be cheaper than your competitors
• Quality & amenities : Quality services and extra amenities (outdoor playground, etc.) will make your daycare facility more attractive vs. competitors
• Services : Your services may go beyond the standard hands-on learning and kid games 

5. Management & People

The 5th section of your daycare business plan should be about people. It should include 2 main elements:

• The management team and their experience / track record
• The organizational structure: what are the different teams and who reports to whom?

a) Management

Here you should list all the management roles in your company.

Of course, the amount of details you need to include here varies depending on the size of your company. For example, a small daycare business run by 1 or 2 persons doesn’t need the same level of detail vs. a large center with 50 children or more.

If you plan on running your business independently, you may write a short paragraph explaining who are the co-founders and/or senior managers (if there are any in addition to yourself). It’s important to highlight their experience in the industry and previous relevant professional experiences.

b) Organizational structure

No matter how many leadership roles there are, you should now explain how you intend to run the company from a management standpoint.

What are the different teams (management, childcare staff, cooking staff, human resources, finance, etc.)?

Note that you should include these details even if you haven’t hired anyone yet. It will show lenders and investors that you have a solid hiring and management plan to run the business successfully.

A great addition here is to add an organizational chart that list all the roles, from Directors to managers, key supervisory roles and employees. Make sure to highlight with reporting lines who manages/supervises whom.

6. Financial Plan

The financial plan is perhaps, with the executive summary, the most important section of any business plan.

Indeed, a solid financial plan tells lenders that your business is viable and can repay the loan you need from them. If you’re looking to raise equity from private investors, a solid financial plan will prove them your daycare is an attractive investment.

There should be 3 sections to your financial plan section:

• Your historical financials (only if you already operate the business and have financial accounts to show)
• The startup costs of your project (if you plan to start a new daycare facility, or add capacity to an existing daycare center, renovate your facilities, etc.)
• The 5-year financial projections

a) Historical Financials (optional)

In the scenario where you already have some historical financials (a few quarters or a few years), include them. A summary of your financial statements in the form of charts e.g. revenue, gross profit and net profit is enough, save the rest for the appendix.

If you don’t have any, don’t worry, most new businesses don’t have any historical financials and that’s ok. If so, jump to Startup Costs instead.

b) Startup Costs

Before we expand on 5-year financial projections in the following section, it’s always best practice to start with listing the startup costs of your project.

For a daycare, startup costs are all the expenses you incur before you open the space to your customers. These expenses typically include: renovation costs, equipment and furniture, etc.

The startup costs for opening a child care center depend on various factors such as the location and size of your daycare facilities, the capacity (the number of children you plan to have), the quality of the amenities, etc. 

We’ve identified that it costs anywhere between $130,000 to $490,000 to start a daycare business with 50 children . See below the cost estimates.

Note that these costs are for illustrative purposes and depend on several factors which might not fully apply to you. Let’s first start below with startup costs. 

c) Financial Projections

In addition to startup costs, you will now need to build a solid daycare financial model over 5 years.

Your financial projections should be built using a spreadsheet (e.g. Excel or Google Sheets) and presented in the form of tables and charts in your business plan.

As usual, keep it concise here and save details (for example detailed financial statements, financial metrics, key assumptions used for the projections) for the appendix instead.

Your financial projections should answer at least the following questions:

• How much revenue do you expect to generate over the next 5 years?
• When do you expect to break even?
• How much cash will you burn until you get there?
• What’s the impact of a change in pricing (say 10%) on your margins?
• What is your average customer acquisition cost?

You should include here your 3 financial statements (income statement, balance sheet and cash flow statement). This means you must forecast:

• The number of children over time ;
• Your expected revenue ;
• Operating costs to run the business ;
• Any other cash flow items (e.g. capex, debt repayment, etc.).

When projecting your revenue, make sure to sensitize pricing and the number of members as a small change in these assumptions will have a big impact on your revenues.

When it comes to the costs, consider both startup and operating costs. For more information, read our complete guide here .

7. Funding Ask

This is the last section of the business plan of your daycare center. Now that we have explained what type of daycare services your company would offer, at what price, your marketing strategy , management and people, this section must now answer the following questions:

• How much funding do you need?
• What financial instrument(s) do you need: is this equity or debt, or even a free-money public grant?
• How long will this funding last?
• Where else does the money come from? If you apply for a SBA loan for example, where does the other part of the investment come from (your own capital, private investors?)

Use of Funds

Any business plan should include a clear use of funds section. This is where you explain how the money will be spent.

Will you spend most of the loan / investment to buy the real estate and do the renovations? Or will it cover the cost of the salaries of your childcare staff and other employees the first few months?

Those are very important questions you should be able to answer in the blink of an eye. Don’t worry, this should come straight from your financial projections. If you’ve built solid projections like in our daycare financial model template , you won’t have any issues answering these questions.

For the use of funds, we recommend using a pie chart like the one we have in our financial model template where we outline the main expenses categories as shown below.

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Daycare Business Plan Creation – Includes Template Download

• Video - Daycare Economy Plan
• Daycare Business Plan: Executive Summary
• Opening a Dog: Locations, Location, Locate
• Employees and Responsibilities

Market Niche

Financial info, operational plan, marketing plan.

• Revenue Opportunities
• Purpose about Borrow
• Business Feasibility

Financial Projections

• Download >> Children Business Plan [FREE Template]

Video - Daycare Business Plan

• Daycare Business Schedule: Leading Summary
• Opening a Daycare: Location, Location, Location
• Purpose of Loan
• Business Realisierbarkeit
• Financial Projecting
• Download >> Daycare Business Plan [FREE Template]

What if Starting a Childcare were Easier Than You Ever Imagined?

It all starts with creation a good daycare business plan. Include the right plan in placement, opening a daycare has never been easier!

Our comprehensive guide will walk you through creating a business plan . Among the end, be sure toward software our free template and hit the ground running!

Early Business Plan: Executive Summary

The actual daycare company plant allowed look pretty long once you have everything filled out. To make things easier for anybody after the bank to your employees though, you should begin with can executive summary.

An executive summarize provides key info, including business-related address, phone piece, and what to contact. It will also outline the business structure, the list von owners, banking details, and the expect getting date with your daycare.

The outline should other inclusion an snapshot of your business design, a description of newspaper business, and adenine rundown of your employees. Finally, it should encompass who your our base is, what your market nimbus lives, and what factors make your past extremely likely. 168. Child Day Care Centre.doc - Addis Ababa Etiopia Tel 0913213407 Send. 25111568978 Martha Getaneh TABLE OF | Course Hero

Our guide will take they over a deeper dive into quite of these different parts of the summary, and you can always working with an outside child care consultant to get things "just right." Still it's vital that your executive summary provide all of this key demo at a glance. Guidelines for Institutional Parental - Ethiopia

Opened a Daycare: Location, Location, Location

Can of the largest decisions to make is where you will open a daycare. You must decide whether to run the nursery out of thine home or run a  group child care center . Child Care Biz Help works mainly with existent both start-up crowd child care centers.

Provided that it have enough room, using your home for the daycare business-related helps to cut down on costs, but keep includes mind home daycares limit the number of young that you able care for, which ultimately restricts the qty of generated i can einnahme.

When choosing a group child care center, you can multi options:

• New building
• Existing center

Whatsoever options yours set, make sure you know how much get will cost. This is vitalities info for your business plan, especially when you get financing.

Workers and Responsibilities

The business plan should insert as great info about owner employees as she have. It's true the you may not know any about everyone you plan to hire, nevertheless any info the thou previously have should go in the plan. Mercy Corps Ethiopia invites any interested parties to submit a bid guided with the isntructions joined beneath. Tendering office. Adi Abeba.

For example, the plan should include the overall number of employees you plot to have. Furthermore, it should structure the exact responsibilities that each person has so that it's clear whom the owners are, who of director or teachers are, and who the other support staff is.

Regarding your management team, the business plan should include their relevant background and experiences. And you can use this section to layout some von the ways this her have screen aspirants (such than criminal background exam, mail of reference, and personal interviews). How to Start a Daycare: The Essential Guide

Again, yourself may make personnel amendments over time. But the stronger your first set of employees is, an easier it will live to get which business off the ground! How to Create an Daycare Business Plan – HiMama Blog ...

Let's confront it: where are plenty of daycares going there. Plus all of the daycares in your area were now your competition. That's why your shop plan should include info about your specific market niche.

Will you specialize in attending to the needs are a particularly set of children? Or will your teachers embrace a specific instruction style such as the  Montessori Methoding ?

There is abundance are room to get create here. After all, chances are you want to open a daycare because she can do it better than other people. This is simply the section to describe why your business will be the superior!

Finances play multiple roles in your plan. But the start area occurs law after your executive summary. This is whereabouts you lay out all of the relevant financial item in one place. Daycare Economy Plan Sample | PDF | Day-time Care | Business Plan

The info should include methods much your daycare equipment will pay, how much your furnishings will cost, and how much transportation want cost. She will also need to provide info about how much operating capital you currently have and how much your intended interior are going to cost.

Make sure this section is accurate so that you ability get all of the money that their business is need!

The economy plan should include an operational plan sektionen. This is where your go on until outline specific individuals when right as their designations, responsibilities, qualifications, and payscale. Keep in mind the center direct position is one of the most important positions to hire for. The Child Care Center Business Planner Workbook

This is also a good section to outline the value of your scheme. Here, you provide an itemize list of different things (like the plumbing, drywall, and electrical) and how much they cost. Do the same thing includes any machinery, equipment and furniture. Don't forget to include any  playground costs  which can be very significant when you're a new start-up.

Eventually, this section should include one description of your business operations. Be sure toward include aforementioned "little things" (like creating quotidian schedules and setting equipment) when well as the "big things" (teaching children of ampere special age range, following health and safety general, etc.). The team brought together commercial consultants and early childhood specialists to develop a map that will combines best store practices with appropriate care ...

It's one thing to have adenine great business and it's another thing for people to  know  you have one great business. That's why every good business plan should include a marketing layout.

In this section, you should be specific about who your primary target listener is also something communities she live in. Furnish very specific demographic data before you pivot into the marketing strategy. How to Write a General Plan for Daycare and Preschool

That strategy have include any combination of traditional also digital marketing methods. This might range from newspaper and radio advertisements to social media and SEO campaigns.

Over time, you will discover what marketing methods are better than others. But this section should includes every commercialize method that you plan to strive. Look 168. Child Day Caution Centre.doc from ECO 4340 at St. John's University. Addis Ababa, Ethiopia Cell 0913213407 Fax. +25111568978 Martha Getaneh TABLE OF CONTENTS PAGE I. SUMMARY 168-3 II. SERVICE

Revenue Chances

Majority people plan to start a daycare because they want to gives back in the community in some way. On that in mind, the purpose of any business belongs to generate profit. And you business plan must include info about the different revenues time of respective business.

The most basic form of revenue will come from to per conversely per enrollment licensing for taking maintenance on children. You can simply calculate this anticipated number about children (and their age ranges) with get rate included order at calculate an approximate month revenue.

In addition until is, you might consider adding enrichment programs and registration fees as revenue possible. It's all an stoff of finding a balance between a superior program and a program my can easily afford.

Purpose of Rental

The business plan should in an section for the purpose of get credits. In this section, you want identifying, down to the dollar, what your intended loan needs the cover. Start running a triumphant daycare or preschool by writing an effective business plan using the tips at this essay.

This should be an unitized view so that the lender aware like much the departure towards renovations, furniture, accessories. And you should use this fachbereich the reiterate what your current operates upper is. The childcare institution, with respect up the child it provides with care, has the right to custody; and to ensures that the regulation and regulations of the ...

When the smoke clears, our should have adenine clear idea of the project free, your equity and contributions, and what the full financing required will be. Minus this data in place, it's impossible to get your business off the ground.

Store Feasibility

What is a lender's primary consideration when a business requires money? Simple: they want to knowing which company will succeeded. That's reason your business feasibility section is so importance. Dreaming of starting your own daycare center? Take care of little ones and earn a solid income with your own daycare business. Follow these steps to learn how.

At the bare minimum, this paragraph should include search data about which factors will make your daycare in this area successful. If you have any feasibility studies or other intensive research you can how, here is aforementioned section for computers. Daycare Business Schedule Sample

Ideally, these section have also include a  full-blown SWOT analysis . This demonstrates lenders and investors that you are a keen understanding of what your business does well additionally what it might need to job on.

Finally, this section have encompass your long-term plans. Outlining how you plan into expand real adapt your business helps reassure lenders and investors that him are prepared for this future.

The final section is straight and to which point. This is where to attach the financial projections you have completed for thine business.

We recommend including cash flow projections for the first twelve years both cash power projections used of first three years. On top from that, you must comprise thirds years of planned income statements and balance sheets. Wherewith to Start a Daycare Center: 15 Steps since Success - FreshBooks

Clearly, much capacity change in the space regarding three period. But healthy financial projections for the next very years are a great way to win skeptical audiences over.

Download >> Daycare Business Plan [FREE Template]

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All her need to do is complete the form below until download your free plan template. Also for better tips about opened a daycare conversely if you're interested in hiring ours the help, contact contact present!

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Daycare Business Plan Template

Written by Dave Lavinsky

Business Plan Outline

• Daycare Business Plan Home
• 1. Executive Summary
• 2. Company Overview
• 3. Industry Analysis
• 4. Customer Analysis
• 5. Competitive Analysis
• 6. Marketing Plan
• 7. Operations Plan
• 8. Management Team
• 9. Financial Plan

Daycare Business Plan

You’ve come to the right place to easily complete your daycare business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their daycares.

How To Write a Daycare Business Plan & Example

Below are links to each section of your daycare business plan template:

• Executive Summary – This is a brief overview of your daycare business plan. The executive summary should be no more than 2 pages long, with brief summaries of other sections of the plan.
• Company Overview – This is where you provide a business description, including your company history, business structure, and any pertinent information about the daycare center.
• Industry Analysis – The industry analysis describes the daycare industry, including market size and trends.
• Customer Analysis – This section of your daycare business plan describes your target market and potential customers. You will detail the demographics, needs, and wants of your target audience and how you plan to meet those needs.
• Competitive Analysis – The competition in your local area will be described here, along with how your daycare business will compete in the market.
• Marketing Plan – Your marketing plan will describe your daycare’s marketing strategy, including your advertising and promotion plans.
• Operations Plan – This section of your business plan describes how your daycare will be operated on a day-to-day basis. It may also include your long-term plans for expansion and the milestones you want to achieve to get there.
• Management Team – The management team section of your business plan should describe the experience and qualifications of your management team including the director, teachers, and support staff.
• Financial Plan – The financial plan section of your daycare business plan should include your financial statements, such as your income statement, balance sheet, and cash flow statement.

Next Section: Executive Summary >

Daycare Business Plan FAQs

What is a daycare business plan.

A daycare business plan is a plan to start and/or grow your daycare business. Among other things, a good daycare business plan will outline your business concept, identify your target customers, present research about the child care industry, detail your marketing plan, and provide your financial plan.

You can  easily complete your daycare business plan using our Daycare Business Plan Template here .

What Are the Main Types of Daycare Businesses?

There are different types of daycare businesses that parents can choose from for their child's needs. A traditional daycare center is most sought after by working parents since it provides child care during regular work hours. There are also in-home daycare centers that are licensed to provide child care in a home setting with fewer children. Other child care centers provide hourly care services by trusted babysitters or nannies and are operating on an as-needed basis.

What Are the Main Sources of Revenues and Expenses for a Daycare Business?

The primary source of revenue for a daycare business is its child care services.

Some key expenses for a daycare business is rent, salaries for staff, utilities and snacks expenses for the children.

How Do You Get Funding for Your Day Care Business Plan?

A daycare or child care center is typically funded through small business loans, personal savings, credit card financing and/or angel investors. This is true for a business plan for daycare or a childcare business plan.

What are the Steps To Start a Daycare Business?

Starting a daycare can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Day Care Business Plan - The first step in starting a business is to create a detailed child care business plan that outlines all aspects of the venture. This should include market research on the childcare industry and potential target market size, information on the services you will offer, marketing strategy, pricing strategies and detailed financial projections.

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your daycare business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your daycare business is in compliance with local laws.

3. Register Your Daycare Business - Once you have chosen a legal structure, the next step is to register your daycare business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your daycare business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Daycare Equipment & Supplies - In order to start your chlidcare business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your childcare   business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising to reach your target audience.

Learn more about how to start a successful daycare business:

• How to Start a Daycare Business

Where Can I Get a Daycare Business Plan Example PDF?

You can download our daycare business plan PDF template here. This is a business plan template you can use in PDF format.

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The ultimate guide to starting a daycare business.

Why Start a Daycare?

Advantages to starting a daycare, can you start a daycare from home, how much does it cost to start a daycare, 15 steps to starting a daycare center, resources for daycare owners, bottom line.

Since most parents work outside the home, most preschool aged children receive some form of child care. While many are cared for by nannies, babysitters or other family members, nearly one-quarter (23.4%) of children under age five attend an organized daycare center. 

This presents a world of opportunity for those looking to take the next step and start a child care business of their own. Starting a daycare center can be both personally fulfilling and financially rewarding.

Do you want to open your own daycare center in the U.S.? Follow along with this guide as we reveal the step-by-step process for opening a successful child care business. 

Opening a daycare can be intimidating, but it can also be incredibly rewarding. While there is no blueprint for success, many child care business owners find joy in the journey. So whether it’s your passion for kids or desire to serve parents in your community, there are many valid reasons to open a daycare. 

What’s important is that you also need to consider your own unique reasons for wanting to open a daycare, as these reasons will then motivate you to follow through on your dream. Even though you will face obstacles along the way, the payoff of opening a daycare is certainly worth the struggles.

Starting your own daycare business can be advantageous on multiple levels. For one, you’ll have the personal satisfaction of starting your own care center from scratch. Then, there’s the joy of spending time with children and learning life-changing lessons along the way.

If you’re still on the fence about starting your own daycare, consider these likely advantages:

• Emotionally rewarding: Working with kids teaches you to be patient and enjoy the simple things in life. You’ll also have the flexibility of having your own business versus being confined to a traditional day job.
• Financial freedom: By opening a daycare, you’re in control of your income rather than reliant on a typical paycheck. You can maximize your earning potential and make investments back into your own business.
• Personal child care: If you have your own child, you can care for them while you’re running your daycare. This will save you money and give your offspring opportunities to make friends with other kids. 
• Continued education: Opening a daycare can open the door to new opportunities in the field of child care. You may be presented with another job position or choose to pursue additional education of your own accord. 
• Extra money: Rather than stay home and care for your own children for free (assuming the original plan was to be a stay-at-home parent), why not make some extra money by caring for other children at the same time? 
• Tax deductions: As a business owner, you can write of certain expenses as business expenses, saving you money on your taxes. These expenses can include a portion of your housing payment (if you have an in-home daycare), your cell phone bill, your vehicle, child care supplies and more. See Tax Deductions . 

These are just a few of the many advantages of starting your own daycare center. Now let’s address some common questions you may have about being a daycare business owner. 

Yes, starting a care center from your home is an option and may even be the more affordable option. This is because there are different options at the local, state and federal level that provide grants and funding to in-home daycare centers.

If you already have the space to run a child care business out of your home, it’s worth looking into Small Business Administration (SBA) loans to help you fund your endeavor. Remember, at the end of the day, you may be eligible for tax cuts and other benefits.

According to small business website bizfluent.com , the average startup cost for a daycare center is $10,000 to $50,000. This can vary widely depending on whether you’re opening a home-based daycare or leasing a separate facility for your care center. 

If you don’t have $10,000+ in your bank account, don’t worry. There are many grants and loans available to child care businesses. In fact, some local businesses will offer financial incentives to support budding child care centers. Consider reaching out to your community for support.

Now, let’s get to the good stuff: how to start your own daycare business from start to finish!

Starting a small business in general is always a journey. While we’ve outlined a few steps to getting your business up and running, know that there is no one “right” way to achieve success. You’ll learn many lessons along the way and are likely to pave your own path.

That said, here are 15 steps to starting your daycare center, even if you have zero experience.

1. Learn About Daycare Licensing Requirements

You might have started off as a babysitter or a nanny, but in order to start a full-on daycare business, you need to meet the proper licensing requirements in order to be legal . That way, your daycare will be legitimate and you won’t run into any legal trouble accepting children into your care. 

A good first step is to contact your state’s Department of Children and Family Services (DCFS) to learn about their specific regulations for child care providers. Another option is your local area’s child care licensing agency. You can usually find this information online. 

To obtain a license to start a daycare center, you’ll also need a current CPR certification, a clean driving record and additional documents that prove your commitment to providing quality child care. Don’t be afraid to ask your local agency questions to ensure you’re satisfying all requirements.

2. Consider Taking Early Childhood Education Classes

While you don’t need to have professional child care experience to start a daycare business, having some understanding of early childhood development is strongly encouraged. You’ll be caring for young lives, so you need to know how to provide the right kind of support and care.

Getting a degree is early childhood education is a good place to start. You can typically find classes in-person at your local community college or online. Through this degree, you’ll gain a greater understanding of how children think and behave, and what they need in order to be properly cared for. 

Beyond that, you’ll have the skills to set your business apart from your competition. You’ll be better prepared to offer the services parents are looking for and keep them coming back time and time again.

3. Create a Daycare Business Plan

In starting any type of small business, it helps to have a business plan. Having a business plan helps you set tangible goals for your business, organize your business structure, outline your services and so much more.

In your daycare business plan, you’ll define your daycare’s mission statement, operations and procedures, staffing and budget. This business plan works to keep you on track and striving toward success. 

Consider how you want your business to be organized for you plan. Will you be solo or hire staff? How will you secure funding? Will you offer services beyond child care (like tutoring)? For help in creating your business plan, check out this detailed guide from the U.S. Small Business Association .

4. Find a Location for Your Daycare

If you plan on running your daycare out of your home, this step should be pretty straightforward. If not, you’ll need to find a location for your child care facility.

Many recreational centers, churches, local businesses and even schools have space available to host a daycare, typically for a monthly fee. Search online, in your local newspaper and within your network to find options in your area. 

Once you’ve found a good fit, you need to check your city’s zoning laws and licensing guidelines to make sure your chosen location is compliant. That way you can avoid some legal headaches down the road. 

Ideally, you’ll need to find a location that’s centrally located, easily accessible and child-friendly. Consider what children and their parents will be looking for in a child care center. You might not find the perfect option, but you can make it work with a little TLC.

5. Get Insurance

Most daycare centers need several types of insurance in order to keep children (and their businesses) protected. These policies typically include liability coverage, property, workers’ compensation and business insurance.

Not sure what type of insurance you need? You can always check with your local child care provider licensing office for guidance.

6. Seek Out Grants and Funding

As we covered already, there are certainly costs associated with starting a daycare. If you don’t have the money you need to cover your initial startup costs, you’ll need to get creative when it comes to acquiring funding.

There are many grants available to help you cover your startup costs. You might also consider taking out an SBA loan or doing community fundraising. Know that the goal is to use these funds as an investment that will yield profitable returns in your business.

Costs Associated with Starting a Daycare

There are several things you’ll need to buy or lease in order to get your business up and running for day one. These expenses include but are not limited to:

• Renting a daycare space
• Indoor and outdoor play equipment
• Art supplies
• Cleaning supplies
• Child care supplies (like diapers and wipes)
• Business laptop
• Licensing fees
• Food (for snacks/meals)
• Bottles, cups, plates, utensils, etc.
• Car or reliable transportation (optional)

You might think of some additional items you’d like to have at your daycare. Over time, you can use the revenue coming in to help cover these expenses and invest in better equipment/supplies. It’s OK to keep things simple and then scale your way up. 

7. Prepare Your Daycare Center

Once you have a location secured and the proper materials and equipment in place, it’s time to prepare your daycare center.

First, clean your facility and sanitize with an effective disinfectant. Then, take the needed steps to childproof your daycare according to the ages of the children you will be caring for. Follow this childproofing checklist for help.

Finally, set up play equipment and lay out toys. You might decide to use storage boxes to keep everything organized. You can always rearrange your layout according to your needs.

Is your daycare ready for service? Give it another once-over and you’re ready to open your doors for day one of business!

8. Draft up a Contract

As a small business owner, having a contract is always a good idea. The parents that come to your facility are essentially your clients, and you want to have a solid contract in place to protect yourself from any legal issues.

We recommend seeking out a trusted contract lawyer to draft up a contract according to your needs and unique business requirements. Your contract will then be used to outline your expectations for your clients and their children.

Here are some important questions to consider when creating your contract:

• How do you expect to be paid?
• How will you handle late payments?
• What time should parents pick up their children?
• Are there consequences for late pick up?
• What services will you provide?
• What is your policy when it comes to sick children?
• Do you offer refunds? If so, under what conditions?
• What happens if a child is injured at your facility?

Whether you seek help from an attorney or write the contract yourself, you should have a contract in place before accepting business. Once signed, you can then send professional daycare invoices to get paid by your clients. 

9. Establish Policies and Procedures

Establish policies and procedures for the families that attend your daycare and your staff. These procedures may include an emergency plan, safety procedures, privacy protocols and rules for your facility.

Having these procedures in place will help you keep the children safe and protect yourself from liability (in some instances). In establishing your policies, be sure to review your local child care licensing requirements to ensure compliance. 

10. Research Possible Tax Credits

If you’re opening an in-home daycare, you may be eligible for certain tax reductions based on the fact that you’re using your residence for business purposes. This means you can essentially write off a portion of your housing cost. This can be the case even if your daycare space serves as a family room after hours. 

11. Hire Staff as Needed

When you’re first getting started, you may just be a company of one, as you might want to save the cost of hiring unnecessary help. But over time, you may need to hire help to take care of the kids during the day.

This is especially true if you find yourself running up against the required ratio of staff to children, as outlined in your local daycare licensing requirements. Be sure to review these to make sure you have enough staff for the number of children you plan on caring for.

Also, make sure all child care staff undergo criminal background checks and provide references to ensure the safety of the children. Make your hiring decisions carefully to keep your facility safe and maintain a stellar reputation.

12. Market Your Daycare

You have your daycare set up and open for business, now how do you get families in the door? As with any small business, you’ll need to market yourself to attract potential clients.

There are many ways to market your daycare. One method is to create flyers and post them around your local community—at businesses, schools and coffee shops. You can also run paid ads on Google or Facebook to draw in families from your local area.

To establish your daycare as a professional business, consider building a website that provides more information about your services. A basic website can cost anywhere from $10 for a WordPress template and set up, to $2,000 or more for a custom design.

With a website, you can then use search engine optimization (SEO) to attract organic traffic from Google. That way, when families search for a daycare near them, your business is likely to show up in the search results.

13. Promote Your Daycare on Social Media

Another effective marketing tool for daycare centers is social media. Platforms like Facebook, Instagram and LinkedIn can be used to promote your business and draw in potential clients.

Create a business Facebook page to post more information about your daycare, collect client testimonials and keep families up-to-date with events at your daycare. You can also post on Instagram and LinkedIn, with targeted hashtags, to attract families in your area.

As your business grows, you might decide to invest in paid marketing services. A digital marketing agency or consultant can help you increase your business’s presence online, outrank your local competitors and attract new clients. 

14. Provide Top-Quality Care

The success of your daycare depends on you providing top-quality care to your families. If the kids at your facility are properly cared for, and, even better, enjoy coming to your daycare, you’re likely to attract more referral business.

Positive reviews can work wonders to attract new clients. Ask families to review your business on Facebook, Google, Yelp and other review sites to improve your daycare’s reputation in your community.

Always look for ways to improve your daycare. Ask families for feedback, invest in additional education and hire fantastic staff to make your daycare the obvious choice for families in your area. 

15. Manage Your Business Finances

Many small businesses fail due to poor money management. If you want your business to succeed, you’ll need at least a basic understanding of business accounting and how to manage your expenses.

Staying on top of your business finances is more than just tracking revenue in and expenses out. You’ll need to plan for taxes—typically around 30% of your revenue, after expenses—and make informed decisions when it comes to how you’re going to allocate your funds.

Professional daycare accounting software can help you send invoices, track revenue, manage expenses and more. It can even send reminders to parents for late payment and accept credit card payments with ease.

The more you know, the easier it will be to make smart financial decisions. Stay on top of your business finances so your business is not only surviving but thriving . 

Congratulations on taking the first step to starting your own daycare business—reading this guide! By now you have a general blueprint for how to start your own business and get up and running. 

Need more help getting started? Check out these reliable resources for aspiring daycare business owners:

• Child Care Aware of America: licensing guidelines for child care and daycare providers
• United States Department of Health and Human Services: childproofing checklist
• Early Childhood Training and Technical Assistance System (ECTTAS): child care resource guide
• Office of Child Care: list of state licensing agencies
• Child Care Resources Inc.: early educator training

Starting a daycare business can be challenging but also incredibly rewarding. The process is made easier by having a general roadmap for how to get started. Hopefully, this guide has provided some guidance on how to get started, plus inspiration for you to finally launch a business of your own.

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Day Care Business Plan

Start your own day care business plan

Safe Kids Child Care

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">, opportunity.

There are an increasing amount of families who have become dependent on two incomes, which has created the necessity of the child care industry. Increasing need means that there are more children that are in need of a safe enriching place to go. 

Safe Kids Child Care will succeed by offering its clients’ children a safe and secure care environment, and close personal attention. The goals of the center are dual-sided: to help parents feel good about the care of their children, and to make it a safe, educational, and fun experience for the child. 

Safe Kids Child Care has a focus on meeting the local need for child care services within the 10-mile radius of Lynn. Children are taken in flexibly on either a full-time or part-time basis.

Competition

There are over 300 child care providers in the local area. The larger commercial chain child care centers, such as KinderCare, have a majority of the market share. These larger chains compete well because of a good reputation among the consumer market. Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

 Safe Kids Child Care offers a lower staff to child ratio, which is appealing to most parents. Additionally, the company maintains child care fee levels that are 5-10% below the average of that of the large commercial chain child care fees.

Expectations

Safe Kids is an exciting opportunity that provides safe and secure child care to the Lynn, MA neighborhood. Safe Kids will reach sustainable profitability over the next three years. Through a combination of well-priced services, outstanding customer service, and a well seasoned management team, Safe Kids will quickly gain market share and a reputation as a premier child care provider.

Financial Highlights by Year

Financing needed.

We plan on having $40,000 to start our business. Each owner will contribute $20,000 to our opening costs. 

Problem & Solution

Problem worth solving.

The child care market is quite competitive in the Boston area. There are over 300 different facilities. There are two general types of facilities. The larger style is commercially run, typically a corporate franchise center. These facilities are both regional and national. Currently, the four largest child care facilities in the USA account for 29% of the market. There are also many different smaller locally run and owned faculties. While the largest facilities can host between 20-100 children, the locally run centers typically have a maximum capacity of 20 children.

Target Market

Market size & segments.

Full-Time Working Couples

The company wants to establish a significantly large full-time regular client base in order to establish a healthy, consistent revenue base to ensure stability of the business. Customer relations are extremely important, as it is imperative to keep the parents pleased in order to keep their children in the daycare center.

Part-Time Workers / Drop-Ins

Part-time workers and drop-ins comprise approximately 20% of revenues. While this market is not the primary focus, sufficient flexibility to handle this secondary market is important to producing supplemental revenues.

Current Alternatives

Our advantages.

Child care competitive edge is the facility’s efforts in obtaining all appropriate licensing and certifications. Additionally, thorough pre-hire background screenings are performed on all individuals before hired for employment.

Keys to Success

Keys to success for the company will include:

• Maintaining a reputable and untarnished reputation in the community. 
• Quality care. 
• Competitive pricing. 
• Flexible hours.

Marketing & Sales

Marketing plan.

The differentiating effort will be benchmarked customer service. A customer-centric philosophy will be infused within the entire organization. Safe Kids will spend extra money to attract and train the best employees. This is especially important because it is the employees that interact with both the children and parents and will have the best chance to impress them enough to turn them into a loyal customer as well as to be vocal in telling their friends about their positive child care experience. 

We will have a Social Media Campaign which uses Facebook and Linked in. We will have experts answer child care questions if the public wants. This gives the public confidence that we know what we doing. We will have customer reviews and allow our customers to talk to us. 

Safe Kids Child Care will make a significant profit through the excellent care of children. Even though Safe Kids charges less, the company will see profit within the first year due to beneficial word-of-mouth advertising. The company expects to double its’ clientele every six months, for the first 18 months.

Locations & Facilities

The facility will originally consist of a 1,300 sq. ft. house in a quiet, residential neighborhood. The yard will be fully fenced in, to ensure no one can either come in or wander away. The yard will be furnished with safe, entertaining toys, as well as a sandbox.

Milestones & Metrics

Key metrics.

Our Key Metrics are: 

• Facebook page views, Twitter re-tweets, and new potential clients calling saying that a current client referred them. 
• The number of children we take care of daily 
• The number of children that are signed up for the monthly care 
• The amount of training our staff has to take care of children and keep incidents down to zero. 

Ownership & Structure

This business will start out as a simple proprietorship, owned by its founders. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suit the future business needs.

Management Team

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Personnel Table

Financial plan investor-ready personnel plan .">, key assumptions.

Our key assumptions are: 

• There are children from families where both parents work or need to work. The children need somewhere safe and enriching where they can grow and make friends while their parents get a chance to get back to him.
• Adults sometimes have emergencies and they need to have a place to leave their children when they can’t be with them 
• The community appreciates the it takes a village mentality. They appreciate we have resources and experts that will answer their questions. We assume they will come to us if they need help, we won’t go out of our way to advise. 

Revenue by Month

Expenses by month, net profit (or loss) by year, use of funds.

Our Start-up Expenses are $3000 including: 

Legal $1,000

Brochures $350

Stationery etc. $100

Activity Supplies $250

Food Preparation Supplies $300

First Aid Supplies $200

Cleaning Supplies $150

Nap Time Bedding $250

Sources of Funds

Our two owners will put up 20,000 dollars each, totaling 40,000. 

Projected Profit & Loss

Projected balance sheet, projected cash flow statement.

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Daycare Business Plan PDF Free Download | Child Care Business Plan PDF

How to Start a Daycare Business - Daycare Business Plan PDF

Are you considering starting a Daycare Business and you’re in need of a daycare business plan PDF? if yes, you'll find this free book to be extremely helpful.

This is a practical guide that will walk you step by step through all the essentials of starting your business. The book is packed with guides, worksheets and checklists. These strategies are absolutely crucial to your business' success yet are simple and easy to apply.

Don’t Start a New Daycare Business Unless You Watch This Video First!

Checklist for Starting a Business: Essential Ingredients for Success

If you are thinking about going into business, it is imperative that you watch this video first! it will take you by the hand and walk you through each and every phase of starting a business. It features all the essential aspects you must consider BEFORE you start a business. This will allow you to predict problems before they happen and keep you from losing your shirt on dog business ideas. Ignore it at your own peril!

Here’s a Valuable Free Gift for You This is a high quality, full blown business plan template complete with detailed instructions and all related spreadsheets. You can download it to your PC and easily prepare a professional business plan for your business. Click Here! To get your free business plan template

The Single Most Important Ingredient for Business Success

The first and most important thing you need to acquire in order to succeed in a small business is... knowledge.

Sounds exaggerated? Listen to this...

According to research conducted by Dun & Bradstreet, 90% of all small business failures can be traced to poor management resulting from lack of knowledge.

This is backed up by my own personal observations. In my 31 years as a business coach and consultant to small businesses, I've seen practically dozens of small business owners go under and lose their businesses -- not because they weren't talented or smart enough -- but because they were trying to re-invent the wheel rather than rely on proven, tested methods that work.

Conclusion: if you are really serious about succeeding in a business... If you want to avoid the common traps and mistakes... it is absolutely imperative that you acquire the right knowledge.

"Why Invent Mediocrity, When You Can Copy Genius?"

That's an excellent quote I picked up from a fellow business owner a few years back. What this means is that you should see what is working and try to duplicate it. Why go through all the trouble of inventing something new, that you don't even know will ever work, when you can easily learn from and duplicate something that has been a proven success?

[ Note: One of the BIGGEST mistakes almost all new businesses make is that they WASTE tons of valuable time, energy and money on trying to create something "new", that has never been tested or proven... only to find out later that it was a total loss. Don't make the same mistake! ]

Hi! My name is Meir. I'm the founder and president of BizMove.com, a successful Internet based information business. I'm also the author of numerous books, mostly in the area of small business management.

I've been involved in small business for the past 31 years of my life, as a business coach, manager of a Daycare firm, a seminar leader and as the owner of five successful businesses.

During my career as a business coach and consultant I've helped dozens of business owners start their businesses, market, expand, get out of troubles, sell their businesses and do practically every other small business activity you can think of. You see, I have been there .... done it ... and bought the Small Business t-shirt! -- This free book contains techniques and strategies I've learned during my 31 year small business career.

Here's what you'll discover in the 'How to Start a Daycare Business' book:

Success Tip: Setting Goals

Good management is the key to success and good management starts with setting goals. Set goals for yourself for the accomplishment of the many tasks necessary in starting and managing your business successfully. Be specific. Write down the goals in measurable terms of performance. Break major goals down into sub-goals, showing what you expect to achieve in the next two to three months, the next six months, the next year, and the next five years. Beside each goal and sub-goal place a specific date showing when it is to be achieved.

Plan the action you must take to attain the goals. While the effort required to reach each sub-goal should be great enough to challenge you, it should not be so great or unreasonable as to discourage you. Do not plan to reach too many goals all at one time.

Establish priorities. Plan in advance how to measure results so you can know exactly how well you are doing. This is what is meant by "measurable" goals. If you can’t keep score as you go along you are likely to lose motivation. Re-work your plan of action to allow for obstacles which may stand in your way. Try to foresee obstacles and plan ways to avert or minimize them.

Click here! to download your Daycare Business plan PDF book for free

Here're other free books in the "how to start a business" series that may interest you:

Here's a Sample 'Executive Summary' for a Daycare Business plan :

COMPANY NAME is an organization that provides day care services to Irvington, NJ.  This mid-sized child care facility serves children from infancy to twelve years of age. Their services are safe and secure, providing the parents with an excellent place where their children can be taken care of. The Market The market is quite competitive. COMPANY NAME will employ two strategies to differentiate them. The first is a pricing structure where COMPANY NAME services will be priced at 5%-10% less than the larger commercial run facilities. The second differentiating effort will be benchmarked customer service. A customer-centric philosophy will be infused within the entire organization. COMPANY NAME will spend extra money to attract and train the best employees. This is especially important because it is the employees that interact with both the children and parents and will have the best chance to impress them enough to turn them into a loyal customer as well as to be vocal in telling their friends about their positive child care experience. The Customers COMPANY NAME will be concentrating on two different target customer segments. The first is full-time working couples. This group is forecasted to account for 80% of the company's business.  The second group of customers are drop in, customers who use COMPANY NAME sporadically, whenever the need arises. This group is growing at 20%. The purpose of this plan is to attain $650,000 in grant funding to build a new facility, upgrade equipment and furniture and hire new employees.  The new facility will house special needs classes for children, a recreation room and administration offices.

1.1 Objectives

The company's objective is to build quality, full-service that will command the approval of the predominate community which it serves. Our goals include:

• A 10% market share in the first year of this plan.
• An ability to construct a building to house special needs classes and expand the facility.
• An increase in our market share by a minimum of 10% for each of the first five years of this plan.

Currently, there are no quality child care and schooling centers in Irvington, or the surrounding areas (for a radius of 50 miles).  The company believes that by progressing in the marketplace first and by establishing quality facilities, it will become, and remain, a leader in the educational and community services in Essex County.

1.2 Mission

COMPANY NAME aims to offer safe and secure child care at all times. Close personal attention to each child is essential to providing a quality experience for all children; therefore, adequate personnel will be hired at all times to ensure each child has the proper supervision will in the company's care. COMPANY NAME seeks to construct a building to create seven Special Needs classrooms, a recreation room and additional administrative offices.

1.3 Keys to Success

Keys to success for the company will include:

• Maintaining a reputable and untarnished reputation in the community. 
• Quality care. 
• Competitive pricing. 
• Flexible hours.

COMPANY NAME is a company owned by OWNER’S NAME. OWNER’S NAME has extensive experience in the child care industry, and has maintained excellent reputations in this same industry. OWNER’S NAME is capable of handling the sales/management and finance/administration areas, respectively. [LIST OWNERS]

2.1 Company Ownership

This business is a C Corporation organized in the State of New Jersey, owned by OWNER’S NAME.

2.2 Company History

COMPANY NAME was established in 1999 by OWNER’S NAME.  COMPANY NAME   is a community-based organization that provides integrated and comprehensive services, in a sustained way, to the children and families of Irvington, New Jersey. The company's goal is to design and provide effective programs throughout the lives of families. COMPANY NAME's services touch on every aspect of a healthful, positive, and successful life—including education, family, community, health, arts, culture, and recreation—and are designed to sustain young people as they progress into adulthood and independent lives of their own. COMPANY NAME hopes to create a wellspring of community engagement and pride to break with the corrosive and desperate culture of street violence that, for decades, has been destroying lives and community in Irvington.  Irvington is a town dispirited by poverty, violence and apathy. COMPANY NAME brings quality services and mobilizes individuals and resources to create the necessary conditions to help people help themselves and their neighbors. The company also takes an integrative approach to strengthening the community by organizing neighborhood institutions from the bottom up. COMPANY NAME philosophy is to find the best practices and program models that address urban poverty and violence and adapt them to Irvington’s needs and particularities. The organization seeks to partner with other organizations, when possible, to maximize resources. COMPANY NAME has not had activity in the last few years and has not claimed any assets or liabilities.  COMPANY NAME still files tax returns each year although there has been no reported activity.

3.0 Services

COMPANY NAME offers child care services and community services for ages from infants to 12 years old. Hours of operation are from 6:00 A.M. to Midnight, Monday through Friday.

How to Motivate Employees in the Workplace

Supervising people involves more than telling them what to do. Effective supervision involves motivation from within the individual, not by externals.

1. Treat them as individuals, not merely as necessary cogs in a wheel. Remember their personal problems, find appropriate times to ask how they or their families are, how the big event went, whether the plumbing problem got fixed.

2. Acknowledge their contributions. Let them be confident that when you pass their suggestions and contributions up the chain of command you will acknowledge the members of your team as the source.

3. Back them up. When things go wrong, the buck stops at your desk. Do not deal with problems by telling your superiors how awful your supervisees are. Tell how you will go about preventing a re-occurrence.

4. Take time for them. When a supervisee comes to you, stop what you are doing, make eye contact. If you can't be interrupted, immediately set up a later time when you will be able to pay full attention to them. Otherwise people may feel that they are bothersome to you, and you may someday find yourself wondering why no one tells you what is happening in your own department.

5. Let them know that you see their potential and encourage their growth. Encourage learning. Help them to take on extra responsibility, but be available to offer support when they are in unfamiliar territory.

6. Explain why. Provide the information that will give both purpose to their activities and understanding of your requirements. Providing information only on a need-to-know basis may work for the CIA, but it does not build teams.

7. Don't micro-manage. Let them know the plans and the goals, that you trust them to do their best, and then let them have the freedom to make at least some of the decisions as to how to do what is needed. Morale and creativity nosedive when the flow of work is interrupted by a supervisor checking on progress every two minutes.

8. Let them work to their strengths. We all like to feel good about our work. If we can do something that we do well, we will feel proud. If you believe supervisees need to strengthen areas of weakness, have them work on these, too, but not exclusively.

9. Praise in public, correct in private. NOTHING undermines morale as effectively as public humiliation.

10. Set reasonable boundaries, and empower your supervisees to set theirs. Once set, respect them. This is not a challenge to your power, it is their right as human beings.

Copyright © by Bizmove Free Business Guides. All rights reserved.

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The urgent need for humanitarian assistance intensifies with famine imminent in Gaza.

For working mothers in Ethiopia, a better life starts with affordable daycare

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Tirungo struggled to find work while caring for her young child.

In the same city, Emebet struggled to keep her affordable daycare afloat.

Both women knew there had to be a better way, but overcoming both economic and social challenges seemed overwhelming, if not impossible.

Challenges for working mothers in Addis Ababa

Addis Ababa, Ethiopia is one of the largest cities in Africa. Its population is growing quickly, exceeding more than 4.6 million people in 2019. Thousands of Ethiopians are flocking to the capital in search of a better life and, particularly, better jobs.

Despite the growth and wealth of Addis Ababa, there are a significant number of people being left behind, specifically mothers. Traditionally in Ethiopia, mothers are not meant to work — they're expected to stay home and raise their children. This discrimination stems from traditions that date back centuries, leading to many mothers who want to work being disadvantaged within the workforce of Addis Ababa.

Even once they find work, getting affordable and accessible childcare is yet another hurdle to overcome.

Emebet saw this struggle first hand among mothers in her community.

“Daycare is very expensive. Poor people can’t afford daycare — most Ethiopians can’t afford daycare,” Emebet says.

A different type of daycare

Emebet is an Addis Ababa native and a mother who knows just how hard it can be to work and care for children. That’s why she left her job as a social worker and decided to start her own daycare, Sitota Daycare. “Sitota” means gift in Amharic.

Emebet started Sitota Daycare in 2018 after borrowing a loan from the government for more than 100,000 birr, equivalent to roughly $3,000 — a huge sum of money for the average Ethiopian. Emebet risked everything she had to start Sitota Daycare — the first affordable daycare service in her community. Despite meeting all the government requirements to open it, Emebet struggled to keep Sitota Daycare open.

Because she was providing affordable daycare to working mothers in her community, Emebet was not making a profit and failed to pay rent for one year. As the situation worsened, Emebet lost hope in ever achieving success.

Keeping the daycare dream alive

Emebet urgently needed help. The LI-WAY program approached her just in time. (Mercy Corps is one of the implementing partners of the LI-WAY program.)

LI-WAY was interested in learning more about Sitota Daycare because it was not only the sole daycare in the community, but also because it offered an affordable option. Emebet explained that there were hundreds of mothers struggling to find work because of this need.

“I didn’t want materials to make my daycare look nice. I don’t want to become rich,” Emebet declares. “I wanted subsidies to allow the working women in my community to bring their children here at a low cost.”

After completing an assessment and better understanding the need for affordable childcare services, the LI-WAY program committed to supporting Emebet through subsidizing childcare for mothers who need it most.

“As soon as the LI-WAY program said they could provide subsidized payments, I called back the mothers that had initially come to my daycare but could not afford the monthly payment. I asked them if they were still interested. They all came running,” recalls Emebet.

With the support of the LI-WAY program, Emebet has paid off her loan completely and now has seven full-time workers at Sitota Daycare — six nannies, one nurse and 35 children.

Starting over in Addis Ababa

Tirungo is one of those nannies. She’s been a part of the Sitota Daycare family for three months. She’s also able to keep her two-year-old daughter Dana at the daycare for a subsidized monthly payment of 200 birr per month, about $6 — a fraction of the cost that Emebet could previously offer without the support of the LI-WAY program.

The job opportunity arrived when she needed it most.

Tirungo returned to Addis from Dubai, where she was abused and imprisoned while working as a domestic worker. When Tirungo finally moved back to Addis Ababa, now with a child, she was unemployed for a year, as she had no place to keep her daughter while working.

“I looked for work for one year but no one would hire me with my child on my back,” Tirungo recalls. “As I was crying because I couldn’t find work, a neighbor told me about Sitota Daycare. I came and Emebet let my daughter in despite the daycare being full. I found a job that same afternoon that my daughter started staying at the daycare.”

Tirungo now works as a part-time laundry woman in the morning and as a nanny at Sitota Daycare in the afternoon. With her income, Tirungo says she is able to pay for rent and save money for her daughter’s future.

“God willing, in the future, I hope to one day open a daycare like Sitota Daycare in other parts of the city,” says Tirungo. “Now I realize how important daycares are for working mothers in Ethiopia.”

Looking ahead

Despite the success of Sitota Daycare through the support of the LI-WAY program, there are still difficulties ahead.

“Some challenges that we face at the daycare is the lack of diapers,” Emebet says. “Diapers are very expensive — about 800 birr per day.” That is more than what most of these mothers make in a month.

“This is too expensive for mothers. We are using traditional diapers right now, but are struggling to maintain this.”

But despite these challenges, Emebet is hopeful for the future of daycares in Ethiopia.

“I want this daycare to continue to spread,” Emebet says. “I want other mothers to open more daycares in the future.”

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Strengthening WASH Business in Ethiopia: Financing for Small Enterprises

• Posted December 23, 2021
• Impact Area Water, Sanitation & Hygiene

Credit Crunch: Affordable financing options for WASH businesses are badly needed

In a series of posts, we will present the main challenges that businesses face when expanding the range of WASH products and services available to households in Ethiopia. After describing these challenges, we will recommend specific regulatory and/or policy actions to address those issues, and which also are intended to improve the overall business climate in the country – so that enterprises can more easily start up, grow, and serve their communities sustainably.

This seventh of eight planned articles addresses some of the challenges experienced by enterprises when seeking credit (loans) to finance their water, sanitation, and hygiene (WASH) product and service lines.

Why does this matter?

Currently, only nine percent of Ethiopians have access to basic sanitation services – a serious situation that affects public health, education, and many other aspects of the country’s economic and social well-being ( JMP, 2021 ). Achieving universal access to basic WASH facilities cannot be done by government or NGOs alone; it will require a strong contribution from the country’s private sector. The Government of Ethiopia recognizes this and is working to strengthen private sector businesses that offer WASH products and services (including household sanitation) as a key element of its greater focus on hygiene and environmental health ( FMoH, 2016 ). These measures are necessary because the current market only meets a small fraction of the country’s enormous needs.

To gain insight into how these challenges can be addressed, and to do so in a manner that ensures the solutions are affordable to all, the  USAID Transform WASH  team spoke with a wide range of experts – including business owners, government officials, and technical specialists in Ethiopia and other East African countries – to get their advice and recommendations on how to develop and expand Ethiopia’s WASH market. The post that follows is largely based on these experts’ reflections. To explore this topic in more depth, follow this link to the full  Learning Note .

The credit challenge

Small and medium enterprises (SMEs) in Ethiopia often cite the lack of access to affordable financing as one of their top challenges (others include taxes and tariffs, access to foreign exchange, start-up capital requirements, intellectual property rights, importing equipment and raw materials, and others discussed in the Learning Note referenced above). For enterprises offering sanitation and other WASH products and services, accessing loans is even more difficult than in other sectors of the economy. This is because financial service providers, including commercial banks, microfinance institutions (MFIs), and savings and credit cooperatives (SACCOs) typically have little or no experience working with such businesses (agricultural businesses are more frequently the recipients of financing). Additionally, finance institutions have seen the WASH sector as highly subsidized by the government and other agencies and, therefore, not profitable with high risk for lending. Potential investors and entrepreneurs may also be unsure about the magnitude of consumer demand for WASH products and services, so they question the ability of WASH-related businesses to start up and remain profitable.

However, observations from Transform WASH experience indicate that WASH businesses generally have acceptable rates of loan repayment, though these enterprises sometimes have problems with late payments due to the seasonality of their customers’ agriculture-based income ( Aboma, 2020 ). From a business’s perspective, even when loans are available, the high interest rates are a key disincentive to borrowing money needed for importing supplies and equipment, business expansion, or for other major expenses.

It’s important to keep in mind that the term “WASH business” refers to a broad range of enterprises, including small-scale masons, who make and/or install latrines; retail shops that sell latrine pans and related supplies; importers and wholesale distributors; and commercial manufacturing operations. Many such businesses not only offer WASH products and services, but also manufacture or sell other items. For smaller enterprises, borrowing from SACCOs or MFIs may be suitable options, but as mentioned above, these financing institutions may be unfamiliar with WASH business. For larger-scale WASH product manufacturing, financing will likely need to be secured through commercial banks (or brought in by foreign joint-venture partners).

How to address the financing challenge?

Part of the financing solution will require building a greater understanding within the financial sector of the scope and scale of business opportunities offered by the WASH sector. The government-led, multi-partner One WASH National Programme (OWNP) recognizes the importance of strengthening the private sector for WASH and has highlighted the importance of introducing innovative financing models through commercial banks and MFIs ( OWNP, 2019 ).

The Ministry of Finance and Economic Cooperation, a key OWNP player, is particularly well-positioned to increase the availability of loans to WASH businesses. There is a growing body of evidence from interventions carried out with OWNP (such as the USAID Transform WASH project and others) that demonstrate the positive influence of MFI and SACCO loans made to WASH enterprises ( Aboma, 2020 ).

Some potential WASH sector investors and entrepreneurs have expressed a desire for “demand guarantees” by the government or development agencies to ensure, for example, a minimum sales quantity or pricing level. Again, this may result from a lack of familiarity with the WASH sector, from perceptions that consumer demand and willingness to pay are not strong enough, or a concern that the WASH marketplace is still new and untested in the country. More effective communication and dissemination of WASH market information, sharing of the experiences of existing WASH enterprises, and giving a voice to satisfied household WASH customers who desire improved products and services could all contribute to strengthening financing opportunities for the growing WASH private sector.

Recommendations

• Collaborate with the Federal Cooperative Agency and the National Bank of Ethiopia to help commercial banks, SACCOs, and MFIs develop loan products suitable for businesses manufacturing or selling WASH products and services.
• Establish systems to track WASH market demand, sales, pricing, and other relevant data to help regulatory and finance institutions to support and manage more effectively the expansion of the WASH economy.
• Encourage national and development banks in Ethiopia to set a target percentage of their funding to provide low-interest loans to qualified WASH sector enterprises. In addition, establish a “loan guarantee” facility to help encourage financial institutions to engage with the private WASH marketplace.
• Address the perceived risk of making loans to WASH businesses through improved communication with the financial sector and by presenting evidence of consumer demand and loan repayment records.
•  Encourage OWNP partners to provide demand guarantees for WASH product orders and service contracts. Ensuring stability and profitability, especially in this early phase of the WASH market’s evolution, will help reduce start-up risks both for local manufacturers and importers.

The next (and final) post in this series will address the critical issue of consumer financing to purchase WASH products and services.

Photo Credit: Monte Achenbach, Masons constructing toilet slabs

About Transform WASH

USAID Transform WASH aims to improve water, sanitation and hygiene (WASH) outcomes in Ethiopia by increasing market access to and sustained use of a broader spectrum of affordable WASH products and services, with a substantial focus on sanitation. Transform WASH achieves this by transforming the market for low-cost quality WASH products and services: stimulating demand at the community level, strengthening supply chains, and improving the enabling environment for a vibrant private market.

USAID Transform WASH is a USAID-funded activity implemented by PSI in collaboration with SNV, Plan International, and IRC WASH. The consortium is working closely with government agencies, including the Ministry of Health, the Ministry of Water, Irrigation and Electricity, the One WASH National Program, and regional and sub-regional governments.

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CAN DIGITAL LOCATOR TOOLS IMPROVE ACCESS TO HIGH-QUALITY HEALTH SERVICES AND PRODUCTS IN LOW-RESOURCE SETTINGS?

In the absence of a trusted and dedicated Primary Healthcare (PHC) provider, individuals often spend valuable time and resources navigating through a multitude of health facilities, visiting various providers in search of the right place to address their health concerns. Challenges navigating the health system can result in delays in assessment, diagnosis, and treatment, potentially leading to poor quality of care and adverse health outcomes. One promising solution is the digital locator, which can enable healthcare consumers to promptly find high quality, affordable health products and services when they need them. What are current applications of digital locator tools?  How can they be improved? What are the challenges faced in utilizing these tools?

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Better data for stronger health systems.

In the ever-evolving health landscape, a robust health management information system (HMIS) stands as a cornerstone of a strong health system. It not only guides decision-making and resource allocation but also shapes the well-being of individuals and communities. However, despite technological advancements that have revolutionized data collection, analytics, and visualization, health systems in low- and middle-income countries (LMICs) continue to grapple with a fundamental challenge: fragmented data and limited effective data use for decision-making. What are some promising solutions?

Advancing private sector reporting

Data fragmentation and use, view our short interviews.

In this video, Wycliffe Waweru , Head of Digital Health & Monitoring at Population Services International outlines three barriers to the use of data for decision-making in health in low- and middle-income countries. For each barrier, Wycliffe proposes some concrete solutions that can help overcome it.

In this video, Dominic Montagu , Professor Emeritus at the University of California, San Francisco, and CEO of Metrics for Management outlines the three levels of data from private healthcare providers in low- and middle-income countries that need to be sequentially integrated into a country’s health information system to assure that governments can manage the overall health system more effectively.

Join us in this illuminating session as we explore the evolution of the STAR self-testing project, sharing insights, challenges, and successes that have emerged over the years. By examining the lessons learned and considering the implications for future healthcare strategies, we hope to foster a deeper understanding of the transformative potential of self-testing in improving healthcare accessibility and patient-centric services.       

This enlightening session promises to  provide  updates from WHO guidelines and share insights on the journey toward viral hepatitis elimination. It will also  showcase outcomes from the STAR hepatitis C self-testing research and discuss how these findings could potentially inform hepatitis B antigen self-testing and the use of multiplex test kits in the   context of triple elimination. Join us in this crucial discussion as we work together to fast-track the global journey toward a hepatitis-free world by 2030.   

In this two-part session,  the Bill & Melinda Gates Foundation, PSI, and Population Solutions for Health will  share lessons and best practices from  rigorous research and   hands-on implementation  experience in Zimbabwe.  The session will  cover important topics  like  client-centered , community-led demand creation,  d ifferentiated  service delivery , sustainable financing, and digital solutions. The sessions will also cover lessons in the program.   

In this session, PSI and PSH will share lessons for optimizing access to comprehensive, culturally sensitive HIV and sexual and reproductive health services. Topics will include enhancing the accuracy and reliability of sex worker population data, improving HIV case finding among men who have sex with men (MSM) through reverse index case testing, and scaling differentiated service delivery models. The session will also cover integrating mental health and substance abuse in key populations (KP) programming and lessons in public sector strengthening.   

Additionally, the session will showcase solutions that MSMs have co-designed, highlighting how this collaboration has improved the consumer care experience. It will demonstrate the critical role of KP communities in establishing strong and sustainable HIV responses, including amplifying KP voices, strengthening community-led demand, and establishing safe spaces at national and subnational levels for KP communities to shape and lead the HIV response.

This enlightening session promises to provide updates from WHO guidelines and share insights on the journey toward viral hepatitis elimination. It will also showcase outcomes from the STAR hepatitis C self-testing research and discuss how these findings could potentially inform hepatitis B antigen self-testing and the use of multiplex test kits in the context of triple elimination. Join us in this crucial discussion as we work together to fast-track the global journey toward a hepatitis-free world by 2030. 

In this two-part session, the Bill & Melinda Gates Foundation, PSI, and PSH will share lessons and best practices from rigorous research and hands-on implementation experience in Zimbabwe. The session will cover important topics like client-centered, community-led demand creation, differentiated service delivery, sustainable financing, and digital solutions. The sessions will also cover lessons in program management. These insights are applicable beyond Zimbabwe and can be used to scale up HIV prevention efforts in the region.

Scaling Digital Solutions for Disease Surveillance

Strong surv eillance systems are essential to detect and respond to infectious disease outbreaks. Since 2019, PSI has worked alongside the Ministries of Health in Cambodia, Laos, Myanmar, and Vietnam to strengthen disease surveillance systems and response. Learn more here.

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The Frontline of Epidemic Preparedness and Response 

Early warning of possible outbreaks , and swift containment action s , are key to preventing epidemics: disease surveillance, investigation and response need to be embedded within the communities. Public Health Emergency Operations Centers (PHEOCs) are designed to monitor public health events, define policies, standards and operating procedures, and build capacity for disease surveillance and response. Learn more here.  

HOW COULD PRIVATE SECTOR PHARMACIES AND DRUG SHOPS ADVANCE PROGRESS TOWARDS UNIVERSAL HEALTH COVERAGE?

Private sector pharmacies and drug shops play an important role in improving access to essential health services and products for millions of people living in low- and middle-income countries (LMICs), where healthcare resources are often limited. However, the way in which these outlets are, or are not, integrated into health systems holds significant importance. Do they serve as facilitators of affordable, high-quality care? Or have they become sources of substandard health services and products?

integrating pharmacies and drug shops into the health system

The Consumer as CEO

For over 50 years, PSI’s social businesses have worked globally to generate demand, design health solutions with our consumers, and work with local partners to bring quality and affordable healthcare products and services to the market. Now consolidating under VIYA, PSI’s first sexual health and wellness brand and social business, our portfolio represent s the evolution from traditionally donor – funded projects towards a stronger focus on sustainability for health impact over the long term . Across 26 countries, the VIYA model takes a locally rooted , globally connected approach. We have local staff, partners and providers with a deep understanding of the markets we work in. In 2022, we partnered with over 47 ,000 pharmacies and 10,000 providers to reach 11 million consumers with products and services, delivering 1 37 million products . VIYA delivers lasting health impact across the reproductive health continuum, from menstruation to menopause. Consumer insights drive our work from start to finish. Their voices, from product exploration to design, launch, and sales, ensure that products not only meet consumers’ needs but exceed their expectations. The consumer is our CEO.  

In 2019, our human-centered design work in East Africa explored ways that our work could support and accompany young women as they navigate the various choices required for a healthy, enjoyable sexual and reproductive life. Harnessing insights from consumers, VIYA is revolutionizing women’s health by addressing the confusion, stigma, and unreliability surrounding sexual wellness. Across five markets – Guatemala, Kenya, South Africa, Uganda and Pakistan – VIYA utilizes technology to provide women with convenient, discreet, and enjoyable tools for making informed choices about their bodies. The platform offers a wealth of high-quality sexual wellness information, covering topics from periods to pleasure in an accessible and relatable manner. Additionally, VIYA fosters a supportive community where users can share experiences and receive guidance from counselors . In 2023, VIYA will begin offering a diverse range of sexual wellness products and connect users with trusted healthcare providers, ensuring comprehensive care tailored to individual needs.   

Digitalizing contraceptive counseling to reach rural women and girls in Ethiopia

By: Fana Abay , Marketing and Communication s Directo r, PSI Ethiopia  

In rural Ethiopia, women and girls often face significant barriers in accessing healthcare facilities, which can be located hours away. Moreover, there is a prevailing stigma surrounding the use of contraception, with concerns about potential infertility or the perception of promiscuity. To address these challenges, the Smart Start initiative has emerged, linking financial well-being with family planning through clear and relatable messaging that addresses the immediate needs of young couples—planning for the lives and families they envision. Smart Start takes a community-based approach, utilizing a network of dedicated Navigators who engage with women in their localities. These Navigators provide counseling and refer interested clients to Health Extension Workers or healthcare providers within Marie Stopes International-operated clinics for comprehensive contraceptive counseling and services.   

In a significant development, PSI Ethiopia has digitized the proven counseling messaging of Smart Start, expanding its reach to more adolescent girls, young women, and couples. This approach aligns with the priorities set by the Ethiopian Ministry of Health (MOH) and is made possible through funding from Global Affairs Canada. The interactive and engaging digital messaging has revolutionized counseling services, enabling clients to make informed and confident decisions regarding both their finances and contraceptive choices.  

Clients who received counseling with the digital Smart Start tool reported a higher understanding of their options and were more likely to choose contraception (74 percent) compared to those counseled with the manual version of Smart Start (64 percent). Navigators also found the digital tool more effective in connecting with clients, leading to higher ratings for the quality of their counseling.  

By December 2023, PSI Ethiopia, working in close collaboration with the MOH, aims to reach over 50 thousand new clients by leveraging the digital counseling tool offered by Smart Start. This innovative approach allows for greater accessibility and effectiveness in providing sexual and reproductive health services, contributing to improved reproductive health outcomes for women and couples across the country.  

Building community health worker capacity to deliver malaria care

By: Christopher Lourenço, Deputy Director, Malaria, PSI Global  

Community health workers (CHWs) are critical lifelines in their communities. Ensuring they have the training, support, and equipment they need is essential to keep their communities safe from malaria, especially in the hardest to reach contexts.  

For example, in Mali, access to formal health services remains challenging, with four in ten people living several miles from the nearest health center, all without reliable transportation or access. In 2009, the Ministry of Health adopted a community health strategy to reach this population. The U.S. President’s Malaria Initiative (PMI) Impact Malaria project, funded by USAID and led by PSI, supports the Ministry with CHW training and supervision to localize health services.  

In 2022, 328 thousand malaria cases were recorded by CHWs ) ; 6.5 thousand severe malaria cases were referred to health centers, according to the national health information system.  

During that time, the PMI Impact Malaria project (IM) designed and supported two rounds of supportive supervision of 123 CHWs in their workplaces in the IM-supported regions of Kayes and Koulikoro. This included developing and digitizing a standardized supervision checklist; and developing a methodology for selecting which CHWs to visit. Once a long list of CHW sites had been determined as accessible to supervisors for a day trip (including security reasons), the supervisors telephoned the CHWs to check when they would be available to receive a visit [as being a CHW is not a full-time job, and certain times of the year they are busy with agricultural work (planting, harvesting) or supporting  health campaigns like mosquito net distribution].  

Supervisors directly observed how CHWs performed malaria rapid diagnostic tests (RDTs) and administered artemisinin-based combination therapy (ACT). They recorded CHW performance using the digitized checklist, interviewed community members, reviewed records, and provided on-the-spot coaching. They also interviewed the CHWs and tried to resolve challenges they expressed, including with resupply of commodities or equipment immediately or soon afterwards.   

Beyond the observed interactions with patients, supervisors heard from community members that they were pleased that CHWs were able to provide essential malaria services in the community. And the data shows the impact.  

In IM-supported areas of Mali, 36% of CHWs in the first round were competent in performing the RDT, which rose to 53% in the second. 24% of CHWs in the first round compared to 38% in the second were competent in the treatment of fever cases and pre-referral counseling. Between both rounds, availability of ACT increased from 80 percent to 90 percent.  

Supportive supervision with interviews and observations at sites improved the basic competencies of CHWs between the first and second rounds, and additional rounds will help to understand the longer-term programmatic benefits.

Taking a market-based approach to scale sanitation in Ethiopia

By: Dr. Dorothy Balaba, Country Representative, PSI Ethiopia  

In Ethiopia, PSI leads the implementation of USAID Transform WASH (T/WASH) activity with consortium partners, SNV and IRC WASH. Contrary to traditional models that rely on distribution of free or heavily subsidized sanitation products, T/WASH utilizes a market-based sanitation approach. This approach creates sustainable and affordable solutions, by integrating market forces and supporting businesses to grow, while creating demand at the household level. 

During the last six years, T/WASH has worked alongside the private sector and government (Ethiopia’s Ministry of Health, Ministry of Water and Energy, and Ministry of Labor and Skills), among other stakeholders, to increase household access to affordable, quality sanitation products and services. For example, more than 158 thousand households have invested in upgraded sanitation solutions with rapid expansion to come as the initiative scales and market growth accelerates. 

T/WASH has successfully trained more than 500 small businesses, including community masons and other construction-related enterprises, with technical know-how in sanitation product installation, operational capacities, and marketing and sales skills needed to run successful, growing businesses. The Ethiopian government is now scaling the approach to all districts through various national, regional, and local institutions with requisite expertise. T/WASH has also worked the One WASH National Program, Ministry of Health, Ministry of Water and Energy, and Ministry of Labor and Skills to examine policies that influence increased household uptake of basic WASH services, such as targeted sanitation subsidies, tax reduction to increase affordability, and increased access to loan capital for business seeking to expand and households needing help to improve their facilities. 

To share the journey to market-based sanitation, representatives of the Ethiopian Ministry of Health and the USAID Transform WASH team took to the stage at the UN Water Conference in 2023.

“Rather than relying on traditional aid models that often distribute free or heavily subsidized sanitation products, market-based sanitation creates sustainable and affordable solutions, integrating market forces and supporting businesses to grow.”  

— Michael Negash, Deputy Chief Party of T/WASH  

Promoting self-managed care like Self-testing and Self-Sampling

By: Dr Karin Hatzold, Associate Director HIV/TB/Hepatitis

Building upon the success and insights gained from our work with HIV self-testing (HIVST), PSI is actively applying this approach to better integrate self-care, more broadly, in the health system beginning with Hepatitis C and COVID-19. Self-testing has emerged as a powerful tool to increase access to integrated, differentiated, and decentralized health services, accelerating prevention, care, and treatment for various diseases, while also increasing health system resilience against COVID-19.

Here’s how we got there.

Seven years ago, the landscape of HIV self-testing lacked global guidelines, and only the U.S., the UK and France had policies in place that allowed for HIV self-testing. High disease burdened countries in low-and-middle-income-countries (LMICs) lacked evidence and guidance for HIVST despite major gaps in HIV diagnosis.

However, through the groundbreaking research from the Unitaid-funded HIV Self-Testing Africa (STAR) initiative led by PSI, we demonstrated that HIVST is not only safe and acceptable but also cost-effective for reaching populations at high risk with limited access to conventional HIV testing. This research played a pivotal role in informing the normative guidelines of the World Health Organization (WHO) and shaping policies at the country level. As a result, more than 108 countries globally now have reported HIVST policies, with an increasing number of countries implementing and scaling up HIVST to complement and  partially replace conventional testing services. This became especially significant as nations tried to sustain HIV services amidst the disruptions caused by the COVID-19 pandemic.

By leveraging our expertise, PSI is conducting research to identify specific areas and populations where the adoption of Hepatitis C and COVID-19 self-testing could significantly enhance testing uptake and coverage. This research serves as the foundation for developing targeted strategies and interventions to expand access to self-testing, ensure that individuals have convenient and timely options for testing for these diseases, and are linked to care, treatment and prevention services through differentiated test and treat approaches.

Using peer coaches to counter HIV stigma in South Africa

By: Shawn Malone, Project Director, HIV/AIDS Gates Project in South Africa, PSI Global

In South Africa, where the HIV response has lagged in reaching men, PSI’s Coach Mpilo model has transformed the role of an HIV counselor or case manager into that of a coach and mentor who provides empathetic guidance and support based on his own experience of living with HIV. Coaches are men who are not just stable on treatment but also living proudly and openly with HIV. Situated within the community and collaborating closely with clinic staff, they identify and connect with men struggling with barriers to treatment and support them in overcoming those barriers, whether that means navigating the clinic or disclosing their HIV status to their loved ones.

PSI and Matchboxology first piloted the model in 2020 with implementing partners BroadReach Healthcare and Right to Care as well as the Department of Health in three districts of South Africa. Since then, the model has been rolled out by eight implementing partners in South Africa, employing more than 300 coaches and reaching tens of thousands of men living with HIV. To date, the model has linked 98 percent of clients to care and retained 94 percent of them, in sharp contrast to the estimated 70 percent of men with HIV in South Africa who are currently on treatment.

Given the success of the program, South Africa’s Department of Health and the United States President’s Emergency Plan for AIDS Relief (PEPFAR) have each embraced the Coach Mpilo model in their health strategy and are embedding it in their strategies and programs. 

“The men we spoke to [while I was traveling to South Africa for a PrEP project with Maverick Collective by PSI] were not only decidedly open to the idea of taking a daily pill…many were willing to spread the word and encourage friends to get on PrEP too. We were able to uncover and support this new way forward because we had flexible funding to focus on truly understanding the community and the root barriers to PrEP adoption. This is the philanthropic funding model we need to effectively fight the HIV epidemic, and it’s beneficial for all sorts of social challenges.”

– Anu Khosla, Member, Maverick Collective by PSI

simplifying consumers’ journey to care in Vietnam

By: Hoa Nguyen, Country Director, PSI Vietnam

In late 2022, with funding from the Patrick J. McGovern Foundation, PSI and Babylon partnered to pilot AIOI in Vietnam. By combining Babylon’s AI symptom checker with PSI’s health provider locator tool, this digital health solution analyzes symptoms, recommends the appropriate level of care, and points them to health providers in their local area. The main goal is to support people in low-income communities to make informed decisions about their health and efficiently navigate the healthcare system, while reducing the burden on the healthcare workforce. The free 24/7 service saves people time and subsequent loss of income from taking time off work and from having to pay unnecessary out-of-pocket expenses. Under our global partnership with Meta, PSI launched a digital campaign to put this innovative product in the hands of people in Vietnam. By the end of June 2023 (in the nine months since product launch), 210 thousand people accessed the AIOI platform; 2.4 thousand people created personal accounts on the AIOI website, 4.8 thousand triages to Symptom Checker and linked 2.2 thousand people to health facilities.   

Babylon’s AI symptom checker and PSI’s health provider locator tool captures real-time, quality data that supports health systems to plan, monitor and respond to consumer and provider needs. But for this data to be effective and useable, it needs to be available across the health system. Fast Healthcare Interoperability Resources (FHIR) standard provides a common, open standard that enables this data exchange. PSI’s first consumer-facing implementation of FHIR was launched in September 2022 as part of the Babylon Symptom Checker project in Vietnam, enabling rapid alignment between PSI and Babylon’s FHIR-enabled client records systems. PSI already has several other consumer health FHIR implementations under active development in 2023, including PSI’s collaboration with the Kenya MOH to launch a FHIR-enabled WhatsApp national health line for COVID-19 health information. PSI will also look to adopt and scale health workforce-facing FHIR-enabled tools, such as OpenSRP2, which will be piloted in an SRH-HIV prevention project in eSwatini in partnership with Ona by the end of 2023.

— Martin Dale, Director, Digital Health and Monitoring, PSI

Engaging the private sector for disease surveillance in Myanmar

By: Dr. Zayar Kyaw, Head of Health Security & Innovation, PSI Myanmar

Under a three-year investment from the Indo-Pacific Center for Health Security under Australia’s Department for Foreign Affairs and Trade (DFAT), PSI is enhancing disease outbreak surveillance and public health emergency preparedness and response capacities in Myanmar, Cambodia, Laos, and Vietnam. When PSI conducted a review of existing disease surveillance systems in Myanmar, it identified several gaps: although the Ministry of Health had systems in place for HIV, tuberculosis, malaria and other communicable diseases, they were fragmented, with different reporting formats and reliance on paper-based reporting. In addition, private sector case surveillance data were not routinely captured, yet private clinics and pharmacies are the dominant health service delivery channel in the country. This hindered effective disease prevention and control efforts.

Building on our extensive private sector malaria surveillance work under the BMGF-funded GEMS project in the Greater Mekong Subregion, PSI implemented a case-based disease notification system using social media channels to overcome the limitations of paper-based and custom-built mobile reporting tools. These chatbots, accessible through popular social media platforms like Facebook Messenger and Viber, proved to be user-friendly and required minimal training, maintenance, and troubleshooting. The system was implemented in more than 550 clinics of the Sun Quality Health social franchise network as well as nearly 470 pharmacies. The captured information flows to a DHIS2 database used for real-time monitoring and analysis, enabling rapid detection of potential outbreaks. Local health authorities receive instant automated SMS notifications, enabling them to promptly perform case investigation and outbreak response.

In 2022, private clinics reported 1,440 malaria cases through the social media chatbots, while community mobilizers working with 475 private providers and community-based malaria volunteers reported more than 5,500 cases, leading to the detection of two local malaria outbreaks. Local health authorities were instantly notified, allowing them to take action to contain these surges in malaria transmission. During the same time, pharmacies referred 1,630 presumptive tuberculosis cases for confirmatory testing – a third of which were diagnosed as tuberculosis and enrolled into treatment programs.

Training health workers in Angola

By: Anya Fedorova, Country Representative, PSI Angola   

The shortage of skilled health workers is widely acknowledged as a significant barrier to achieving Universal Health Coverage. To address this challenge, PSI supported ministries of health to develop a digital ecosystem that brings together stewardship, learning, and performance management (SLPM). The ecosystem enhances training, data-driven decision-making, and the efficiency of healthcare delivery.

Here’s what it looks like in practice.

In July 2020, PSI Angola, alongside the Angolan digital innovation company Appy People, launched Kassai , an eLearning platform that targets public sector health workers in Angola. Through funding from USAID and the President’s Malaria Initiatve (PMI), Kassai features 16 courses in malaria, family planning, and maternal and child health – with plans to expand learning topic areas through funding from ExxonMobil Foundation and private sector companies. A partnership with UNITEL, the largest telecommunication provider in Angola, provides all public health providers in Angola free internet access to use Kassai.

Kassai’s analytics system to follow learners’ success rate and to adjust the course content to learners’ performance and needs. Kassai analytics are integrated with DHIS2 – the Health Management Information System (HMIS) of Angolan MOH, to be able to link learners’ knowledge and performance with the health outcomes in the health facilities.  The analytics track learners’ performance by course and gives visibility by health provider, health facility, municipality, and province. Each course has pre-and post-evaluation tests to track progress of learning, too.

By the end of 2022, there were 6,600 unique users on the Kassai platform and 31,000 course enrollments. PSI Angola’s partnership with UNITEL, the largest telecommunication provider in Angola, allows for free internet access to learn on the Kassai for all public health providers in Angola. Building on its success for malaria training, Kassai now also provides courses in family planning, COVID-19, and maternal and child health. This reduces training silos and provides cross-cutting benefits beyond a single disease.

Implementing the SLPM digital ecosystem brings numerous benefits to health systems. It allows for more strategic and efficient workforce training and performance management, enabling ministries of health to track changes in health workers’ knowledge, quality of care, service utilization, and health outcomes in real time. The ecosystem also supports better stewardship of mixed health systems by facilitating engagement with the private sector, aligning training programs and standards of care, and integrating private sector data into national HMIS. Furthermore, it enables the integration of community health workers into the broader health system, maximizing their impact and contribution to improving health outcomes and strengthening primary healthcare.

WHISTLEBLOWER AND ANTI-RETALIATION

PSI does not tolerate retaliation or adverse employment action of any kind against anyone who in good faith reports a suspected violation or misconduct under this policy, provides information to an external investigator, a law enforcement official or agency, or assists in the investigation of a suspected violation, even if a subsequent investigation determines that no violation occurred, provided the employee report is made in good faith and with reasonable belief in its accuracy.

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Global Code of Business Conduct And Ethics

PSI’s code sets out our basic expectations for conduct that is legal, honest, fair, transparent, ethical, honorable, and respectful. It is designed to guide the conduct of all PSI employees—regardless of location, function, or position—on ethical issues they face during the normal course of business. We also expect that our vendors, suppliers, and contractors will work ethically and honestly.

The Future of Work

With overarching commitments to flexibility in our work, and greater wellbeing for our employees, we want to ensure PSI is positioned for success with a global and holistic view of talent. Under our new “work from (almost) anywhere,” or “WFAA” philosophy, we are making the necessary investments to be an employer of record in more than half of U.S. states, and consider the U.S. as one single labor market for salary purposes. Globally, we recognize the need to compete for talent everywhere; we maintain a talent center in Nairobi and a mini-hub in Abidjan. PSI also already works with our Dutch-based European partner, PSI Europe, and we’re creating a virtual talent center in the UK.

Meaningful Youth Engagement

PSI is firmly committed to the meaningful engagement of young people in our work. As signatories of the  Global Consensus Statement on Meaningful Adolescent & Youth Engagement , PSI affirms that young people have a fundamental right to actively and meaningfully engage in all matters that affect their lives. PSI’s commitments aim to serve and partner with diverse young people from 10-24 years, and we have prioritized ethics and integrity in our approach. Read more about our commitments to the three core principles of respect, justice and Do No Harm in the  Commitment to Ethics in Youth-Powered Design . And read more about how we are bringing our words to action in our ICPD+25 commitment,  Elevating Youth Voices, Building Youth Skills  for Health Design .

Zero Tolerance for Modern-Day Slavery and Human Trafficking

PSI works to ensure that its operations and supply chains are free from slavery and human trafficking.  Read more about this commitment in our policy statement, endorsed by the PSI Board of Directors.

UNITED NATIONS GLOBAL COMPACT

Since 2017, PSI has been a signatory to the United Nations Global Compact, a commitment to align strategies and operations with universal principles of human rights, labor, environment and anti-corruption.  Read about PSI’s commitment to the UN Global Compact here.

Environmental Sustainability

The health of PSI’s consumers is inextricably linked to the health of our planet. That’s why we’ve joined the Climate Accountability in Development as part of  our commitment to reducing our greenhouse gas emissions by 30 percent  by 2030. Read about  our commitment to environmental sustainability .

Affirmative Action and Equal Employment Opportunity

PSI does not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, age, marital status, genetic information, disability, protected veteran status or any other classification protected by applicable federal, state or local law.  Read our full affirmative action and equal employment opportunity policy here.

Zero Tolerance for Discrimination and Harassment

PSI is committed to establishing and maintaining a work environment that fosters harmonious, productive working relationships and encourages mutual respect among team members. Read our policy against discrimination and harassment here .

PSI is committed to serving all health consumers with respect, and strives for the highest standards of ethical behavior. PSI is dedicated to complying with the letter and spirit of all laws, regulations and contractual obligations to which it is subject, and to ensuring that all funds with which it is entrusted are used to achieve maximum impact on its programs. PSI provides exceptionally strong financial, operational and program management systems to ensure rigorous internal controls are in place to prevent and detect fraud, waste and abuse and ensure compliance with the highest standards. Essential to this commitment is protecting the safety and well-being of our program consumers, including the most vulnerable, such as women and children. PSI maintains zero tolerance for child abuse, sexual abuse, or exploitative acts or threats by our employees, consultants, volunteers or anyone associated with the delivery of our programs and services, and takes seriously all complaints of misconduct brought to our attention.

Diversity and Inclusion

PSI affirms its commitment to diversity and believes that when people feel respected and included they can be more honest, collaborative and successful. We believe that everyone deserves respect and equal treatment regardless of gender, race, ethnicity, age, disability, sexual orientation, gender identity, cultural background or religious beliefs.  Read our commitment to diversity and inclusion here.  Plus, we’ve signed the CREED Pledge for Racial and Ethnic Equity.  Learn more.

Gender Equality

PSI affirms gender equality is a universal human right and the achievement of it is essential to PSI’s mission.  Read about our commitment to gender equality here.

Engaging the Private Sector

From ministries of health to regulatory bodies and purchasers, we partner with private and public sector players to provide seamless health services to consumers – no matter their entry point to care.

Scaling Digital Health Innovations

Across 40+ countries, we scale digital solutions that make it easier for people to take ownership of their own health, and health systems to use resources efficiently and increase health impact.

Supporting People to be Active Agents in their Healthcare

We support health systems in shaping the policy and regulatory environment for self-care interventions and ensuring self-care is included as an essential part of healthcare services.

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