Is It Time to Grow Your Child Care Business?
A 5-step checklist to decide if you're ready to expand
Expanding your child care business can increase revenue and serve more families, but growing too fast without proper preparation can weaken or even end your business. Use this checklist to determine if you're ready.
Step 1: Assess Your Demand
Do you have a waitlist? If your current seats are filled and you're getting inquiries, that's a good sign. But make sure your waitlist is accurate by contacting parents to confirm their interest.
Is there demand for your specific expansion? A waitlist doesn't guarantee instant revenue. Talk to families to ensure they'd actually use your expanded services. Location changes or program type changes might be deal breakers.
Does your plan align with community needs? Talk to current families, those on your waitlist, and others in the community. Understand what hours, services, and age groups are actually needed in your area.
Step 2: Consider Your Staffing Needs
You need staff before you have revenue to cover their costs. Start conversations with current employees about their interest in expansion and people they know who might want to work for you. You don't need every position filled, but you need a solid plan for attracting and retaining qualified staff.
Step 3: Develop a Clear Picture of Your Finances
Many providers don't realize their current business isn't financially stable enough to support expansion costs. You need both a budget and a cash flow forecast for the next 6-12 months.
The difference matters: A budget shows yearly spending, but cash flow shows monthly money in and out. Expansion has big upfront costs (staff, supplies, marketing, furniture, renovations) before you enroll any children. You must have enough cash to float your business until you break even.
Step 4: Create a Business Plan
Write a simple business plan that covers:
What you plan to do
How you'll get families to provide revenue
Your staffing strategy
Required permits and licenses
Cash flow projections for at least the first year
Step 5: Access Capital to Support Your Growth
Most expansions need additional funding. Make sure you can handle the costs associated with any loans or capital you access.
The Bottom Line
Growth should be sustainable and strategic. If you don't have enough current enrollment, a solid financial foundation, or clear demand for your expansion, focus on strengthening your existing business first. When you do have these elements in place, expansion can be a successful way to serve more families and increase revenue.