Free Day Care Center BusinessPlan for Loans

Obtaining Business Financing

When obtaining a business loan for a day care center business, it isimperative that you have a properly structured business plan that will assistyou in showcasing how you intend to operate your Day Care Center, how thebusiness will operate, how you intend to market the business, the anticipatedfinancial results of your company, and how you intend to repay your debtobligations. This sample loan business plan will provide you with the frameworkthat you need in order to acquire a business loan for starting or expandingthis type of business.

Executive Summary

Introduction

When obtaining a business loan for a day care center, it is imperative thatyour business plan has a clear and concise executive summary that provides anoutline of what are seeking to accomplish, how much capital you are seeking toraise, the management biography of the business owner, and an overview of theanticipated profit and loss statements of the business. Here is an example ofhow the title paragraph should be written:

Day Care Center, Inc. (“the Company”) is seeking a business loan of 0,000 inorder to launch the operations of a day care center business that will be basedin San Francisco, California. The Company was founded in (Insert Year). Thebusiness was founded by Mr. John Doe.

Products and Services

In the next segment of the business loan and business planning document, youshould showcase the products and services that you will be providing to thegeneral public. For instance:

The Day Care Center will provide round the clock childcare services to thegeneral public of San Francisco. The business will serve meals, provide basiceducational services, and after-hours care services for parents that needassistance caring for their children during daytime hours. At all times, theDay Care Center will remain within the letter of the law regarding the sale ofDay Care Services especially as it relates to hiring individuals that work withchildren.

Business Loan Terms

Now it is time to discuss the anticipated terms of the business plan thatyou are seeking. An example paragraph of how this is stated:

At this time, Mr. Doe is seeking a conventional business loan in the amountof 0,000. The interest rate, loan terms, and loan covenants are to bedetermined during negotiation. However, this business plan assumes that thebusiness will receive a seven year business loan with a seven percent interestrate due on the outstanding principal balance.

Management Biography

Now that the summary of the business has been provided, it is time toprovide a brief overview of the owner of the business. An example paragraphsumming up the owner is as follows:

Mr. Doe is a highly experienced business person that has years of experienceregarding the direct ownership and management of business. He will be able toeffectively bring the operations of the Day Care Center, Inc. to profitabilitywhile ensuring that the business loan’s payments and its covenants are met atall times.

Financial Statements

The most important thing to your lender when applying for a business loan ishow you intend to repay the bank. In this section of the business plan, youshould provide an overview of the finance’s of the business discussing theanticipated revenues, expenses, and profits/losses. You can also discuss theapplicable collateral within the business plan that will be used to secure yourbusiness financing.

Expansion Plans

One of the most important aspects of your business plan is how you intend toexpand the business over a three to five year period. Banks and financecompanies always want to see that the business will experience a moderate tostrong level of growth. This is especially true in business lending because asyour business grows the cash flow that secures your business loan will decreaseproportionality against your monthly credit obligations. An example of how thisis stated is as follows:

The Day Care Center will continue to expand through organic means includingincreasing the Company’s advertising budget via the reinvestment into the aftertax cash flows of the business. Additionally, if the business is highlysuccessful then the Company may seek to establish additional Day Care Centerlocations after the third year of operations.

The Financing

Use of Business Loan Proceeds

In this section of the business plan you should focus on how the proceeds ofthe business loan will be used. An example of this would be as follows:

Day Care Center Establishment – ,000 Day Care Center Licensure andProfessional Fees – ,000 Working capital – ,000

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Management Equity

In this section of the business plan you should discuss the percentageownership of the business among the owners of the business. For example:

Mr. Doe will own 100% of the Day Care Center.

Board of Directors

When applying for business financing, the bank will also want to know whoserves as the board of directors. For small businesses, usually the ownerserves as the director of the business. An example of how this is worded:

Mr. Doe will be the sole director of Day Care Center, Inc.

Exit Strategy

Any bank or financing company is also going to want to know what you intendto do with the business over a set period of time. Many business owners willdevelop and expand a business with the intent to sell the company to a thirdparty at a later time. When drafting this part of the business plan you shouldfocus on what you intentions are in regards to potentially selling thebusiness. This is often worded as:

Mr. Doe would most likely sell the Day Care Center to a third party for asignificant earnings multiple. Day Care Centers usually sell for approximatelyone to three times earnings given the financial strength of the business. Inthis event, the business would be sold by a business broker and the businessloan sought in this plan would be repaid according to the covenants of thebusiness loan agreement.

Products and Services

When developing a business plan that is appropriate for obtaining a businessloan or other business credit facility you need to clearly showcase theservices or products that you will be offering to the general public. Anexample of how this section is worded goes as follows:

As stated in the executive summary, the Day Care Center will provide a broadspectrum of daycare services to the general public including round the clocksupport for parents that cannot care for their child on a full day basis. TheDay Care Center will serve meals, provide general education services, andprovide transportation services for children when needed.

At this time, the business is seeking to obtain the appropriate licensure toensure that the business can commence operations as soon as the Day Centerreceives the financing sought in this business plan.

Industry and Market Analysis

The Current State of the Economy

It is important to let your financial institution know that you are wellapprised of the financial situation of the general economy when you areapplying for a business loan. This is especially true in today’s environmentwhere lending has become more difficult and will remain more difficult in theforeseeable future. Specifically, you should gear this section of the businessplan analysis towards the industry that you are operating within. Forexample:

The current economy has remained difficult over the past few years. However,Day Care Centers typically operate with a strong level of economic stability asparents will continue to require to have their children cared for on a regularbasis despite the current state of the economy. As such, the Day Care Centerwill be able to remain profitable and cash flow positive during any economicclimate.

The Day Care Center Industry

In addition to providing your business loan officer with an understanding ofthe general economy, it is important that you showcase that you have an equalunderstanding of the industry in which you are operating within. As such, youwill need to provide you business loan institution of a brief overview of yourindustry and any potential changes that may affect the way that your companydoes business. An example of how an industry overview is as follows:

There are over 62,400 childcare establishments in the United States. Thesebusinesses produce over billon dollars a year in gross receipts. Additionally,the business employs over 628,000 people, and generates payroll figures of .2billion dollars a year. Approximately 42,000 of these businesses operate as forprofit businesses with the remainder of these companies providing services in anot-for-profit setting, such as a religious institution.

The industry has experienced a tremendous rate of growth over the last tenyears. The industry from 1999 to 2005 experienced growth of more than 18% overthe five year period. This industry is one of the fastest growing industries inthe United States. This is primarily attributable to the extremely high divorcerate in this country. As single parent families have become normalized, theneed for daycare services has grown immensely as the traditional nuclear familyhas become a rare breed. Additionally, many more families are two incomefamilies, and as such, the need for daycare centers among these demographics isimmense.

Target Market

In this section of the business loan application and business plan analysis,you should focus on the demographics of your localized market (or nationalmarket if applicable). This section should discuss how many people live in yourarea, the anticipated number of people that would require the use of Day CareCenters, the median household income of people living in the area, poverty linestatistics, and any applicable laws that would apply to your operation of DayCare Centers.

Competition

Many people that are developing new businesses or expanding existingbusinesses often feel that their business does not have any competition orlimited competition at best. However, this is almost never the case. Unless youhave re-invented the wheel – you will have competition. When applying for abusiness loan, you should clearly showcase your competition in your businessplan. This is especially important to your banker as they will be able to gaugeyour ability to be successful in your targeted market. Many business loanunderwriters will aggressively confirm that competitive nature of your localmarket and your local industry.

When drafting this section of the plan you should heavily discuss thecompetitive advantages that you intend to have over your competition.

Marketing Plan

In addition to all of the above information that we have covered, yourbusiness loan officer is also going to want to know how you intend to marketyour business to the general public. Most people do not quite understand how toeffectively market their business outside of prominent signage or flyerdistribution. When applying for a business loan (again in this difficultlending climate), your banker is going to want to see that you have a clearmethodology of how you intend to market your services or products to thegeneral public. In this section of the business plan – we will overview how toshowcase your services/products to the general public.

Marketing Overview Example

The Day Care Center will place prominent signage on the facility to draw asignificant amount of foot traffic. The business will maintain listings in theYellow Books. The Day Care Center will also maintain an internet website thatshowcases the Company’s operations, hours of operation, and relevant contactinformation. The Day Care Center will also work closely with local schools forreferrals to the Company’s services.

Marketing Strategies Overview

Additionally, you will be required to further drill down (in your businessplan) how you intend to implement your strategies when you launch or expandyour business’s operations. In this section of the business loan and businessplan documents, you should amplify the bullet points from the section above.For instance:

The Day Care Center intends to use a number of strategies that will createinstant traffic and customer flow to the Company’s location. These strategiesinclude not only using prominent facility and road signage, but alsodistributing flyers to people that fall into he Company’s targeteddemographics. The business will also regularly take out advertisements inlocalized newspapers that showcase the Company’s hours of operations, day carecenter services, and other information relating to the operation of the DayCare Center.

The business will also maintain a highly informative website that showcasesthe Day Care Center’s services, its hours of operation, licensure information,and other relevant information in regards to the Company’s services. Thiswebsite will be listed on major search engines such as Google as many peoplenow use the internet to locate local businesses such as Day Care Centers. Thebusiness will also develop ongoing referral relationships with local schoolsthat have children that need after-hour childcare needs.

The Financial Plan

Beyond any other part of your business loan application or business plan,the financials section of these documents are what matters most when applyingfor a business loan or any other type of credit facility. Ultimately, thissection of the business plan showcases not only what your anticipatedprofitability will be, but also how you intend to repay the funds that you haveborrowed through your business financing facility. An example of how thissection is structure is as follows:

Assumptions

Day Care Center, Inc. will have an average annual growth rate of 10% peryear. Mr. Doe will acquire 0,000 through a business loan in order to launch theoperations of the business.

Proforma Financials for a Business Loan

Now it is time to showcase how you intend to repay your loan, generate aprofit, and increase the book value of your business over a three to five yearperiod. BusinessPlansForLoan.com has developed an easy to use financial modelthat you can use when drafting out the financial model for your business planand business loan application. Through your business loan application, you willbe required to have the following:

Profit and Loss Statement for your Day Care Center Cash Flow Analysis forthe Day Care Center Balance Sheet for the Day Care Center Business LoanAmortization Tables

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