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How to Start a Kindergarten Business

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Opening a kindergarten can be a rewarding career path for those who enjoy working with children. This type of business will allow you to shape young minds and make a difference in your community. Plus, it can be a profitable venture, considering that more than 422,000 children were enrolled in private kindergartens in 2017.

TL;DR (Too Long; Didn't Read)

Research the market and the legal requirements for opening a kindergarten in your state. Look at what other kindergartens around the world offer and use them for inspiration. Determine whether you want to implement your own business model or purchase a preschool franchise.

Research the Market

Kindergartens play a crucial role in children's transition from home to school. This type of education usually starts at age 5 and lasts for one year. Children are encouraged to play together and learn basic activities like subtraction, addition and skip counting. They have access to educational resources such as picture books, toys, board games and more.

If you're planning to start a kindergarten business, research the market thoroughly. Study the different types of kindergartens in the United States and other countries so you can come up with a unique business model. If you offer the same facilities as everyone else, you'll find it difficult to attract clients. Analyze your competitors, learn from them and seek areas of improvement.

Read materials on how kindergarten looks around the world. For example, some facilities in Canada and Germany use parks and other outdoor areas as classrooms. Those in China emphasize singing, dancing and physical education. Kindergartens in the United Kingdom assign one teacher to every eight students, which allows children to work closely with their supervisors and receive personalized attention.

Choose Your Niche

Children who attend kindergarten develop skills that they can apply to all parts of their life. They learn the difference between right and wrong, build connections and make decisions independently. They also learn how to use words to express their needs and wants rather than screaming or throwing things. Kindergarten also instills a sense of curiosity in children, giving them an opportunity to play, learn and try new activities.

Try to find your niche before opening a kindergarten business. Again, it's important to come up with something new to make your business stand out. For example, you could launch a kindergarten for gifted children or one that specializes in arts and crafts. Another option is to create playgroups that offer specific classes such as drama, painting, foreign languages or yoga.

Research kindergarten programs in your area and across borders for inspiration. Focus on those that help children develop literacy, numeracy and language skills, emotional skills, social skills and self-awareness. Try to incorporate outdoor activities in the curriculum. Seek ways to expose students to new ideas and concepts so they can broaden their horizons.

Assess the Costs Involved

Opening a kindergarten isn't cheap. You'll need to pay for business licenses and permits, buy or rent a building, set up classrooms and purchase educational materials. On top of that, it's necessary to hire an accountant, teachers, janitors and administrative staff. You may also need to hire web designers to create a website for your kindergarten.

The exact costs will depend largely on how you choose to operate your business. Consider the rent and utilities as well as salaries and employee benefits. The average cost of starting a child care center, which is similar to a kindergarten, is around $95,485. The primary expenses include:

  • Child care cost (toys, books and other educational supplies): $4,715
  • Indoor furniture: $19,780
  • Outdoor equipment: $10,810
  • Office furniture: $2,300
  • Fencing: $3,795
  • Insurance: $3,450
  • Working capital for eight months: $31,280
  • Licensing: $575

How much you'll pay depends on the location of your business. Licensing fees, for example, vary from one state to another. Renovations can significantly increase your startup costs. If you purchase the building, you may need to pay for electrical work, plumbing, building and inspection permits, site improvements, landscaping and more.

Look for Kindergarten Franchising Opportunities

As a startup founder, you may not have enough money to open a kindergarten. Sure, you may apply for grants and loans, but you may still lack the experience needed to operate this kind of business. Kindergarten franchising opportunities abound and can make it easier to get your business off the ground.

Lightbridge Academy, for instance, provides franchisees with 134 hours of training and ongoing support through a dedicated business coach. Its facilities are equipped with cutting-edge technology, from iPads and whiteboards to internet monitoring. The company has had 10% revenue growth every year since 1999. The initial investment ranges between $730,000 and $5 million, which isn't cheap, but you'll receive ongoing training and access to a proven business model.

A more affordable option is Kiddie Academy. Franchisees need $250,000 to $500,000 in liquid capital, a net worth of $740,000 to $1 million and a credit score of 650. The staff at Kiddie Academy can help you design a kindergarten business plan, prepare loan applications and choose one that meets your needs. Training starts from day one, making it easier to learn the ins and outs of this business model.

Make a Kindergarten Business Plan

Next, write a kindergarten business plan that covers your vision, goals, financial projections and other key aspects. Start an executive summary followed by a brief overview of the preschool industry. The executive summary should describe your mission statement, objectives and strategy in a few paragraphs. Keep it short and to the point.

A kindergarten business plan should include the financial, legal and organizational aspects of running this type of business. Outline your goals and describe how you're planning to achieve them. Also, provide an overview of your competitors and target customers and offer information on the company's ownership and management as well as its location, facilities, services and technology. Brainstorm marketing strategies and seek creative ways to get your message across and attract clients.

If you're not sure where to start, look for preschool business plan templates online. Use them for inspiration and tailor them according to your needs. Consider forming a planning committee to discuss what it takes to start this kind of business and make a plan. At the very least, this document should include the following:

  • Executive summary
  • Market overview
  • Competitive comparison
  • Target audience
  • Company description
  • Management team
  • Mission
  • Short-term and long-term goals
  • Products, services and facilities
  • Operating policies and procedures
  • Strengths, weaknesses, opportunities and threats (SWOT analysis)
  • Funding needs, pricing strategy and financial projections
  • Legal requirements
  • Marketing strategy
  • Expansion strategies

Satisfy the Legal Requirements

Like any other business, opening a kindergarten involves several legal steps. First, you'll need to brainstorm kindergarten school names and choose one that reflects your vision. Register it with your state and then choose a business structure, such as a limited liability company or a partnership. Apply for an employer identification number online through the IRS website so you can open a bank account, get business licenses and pay your taxes.

Be aware that each state has different guidelines and requirements regarding education. Contact a child care licensing agency in your state to determine what business licenses and permits are needed for opening a kindergarten.

In addition to business licenses, you will need an insurance plan. Ideally, reach out to a company that offers policies designed for kindergartens and day care centers. Contact the insurance department in your state to find an agent who can help you. Discuss your licensing and insurance needs with an attorney or a state representative to make sure your facility complies with the law.

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About the Author

Andra Picincu is a digital marketing consultant with over 10 years of experience. She works closely with small businesses and large organizations alike to help them grow and increase brand awareness. She holds a BA in Marketing and International Business and a BA in Psychology. Over the past decade, she has turned her passion for marketing and writing into a successful business with an international audience. Current and former clients include The HOTH, Bisnode Sverige, Nutracelle, CLICK - The Coffee Lover's Protein Drink, InstaCuppa, Marketgoo, GoHarvey, Internet Brands, and more. In her daily life, Ms. Picincu provides digital marketing consulting and copywriting services. Her goal is to help businesses understand and reach their target audience in new, creative ways.