Effortlessly Manage Your Daycare Invoice Template for NPOs

Daycare invoice template for NPOs

hey this is Kyle at projection hub and today I'm going to be talking about how to create a business plan for a daycare facility so what this video is not going to be is I'm not going to write an entire business plan right in front of you what I'm going to do is I'm going to scroll through a free business plan template specifically for a daycare so if it's filled out with example information you can get that template in the description of the video no strings attached because the business plan is only going to be as good as the information you put in it so you can use this as a guide some inspiration as you're filling it out but the purpose of this video primarily along with showing you the the structure of the business plan is going to be to focus on five key points that really could make or break the business plan's success when you're trying to get approved for a business loan so who is projection hub we have helped more than 50 000 entrepreneurs and small businesses create Financial projections for their business plans for their business loan applications for raising investment actually daycares are one of the most common businesses that we work with we we help a lot of daycares create their financial projections for their business to be used in their business plan and my experience apart from you know working with all these businesses here at projection hub I previously spent nearly seven years as an SBA lender for an SBA micro lender and and we reviewed applications for daycare centers very often and so I saw a lot of business plans and financial projections for daycares to get a lot of that experience so again I'm going to scroll through here in the structure using this template as a guide and then as we come across these areas of the five key points that are most important about your business plan I'll dive in a little bit deeper and show some examples and highlight a few things there so let's go ahead and jump in okay so here we are we're gonna go through and kind of scroll through this two quick things I'll mention one is if you stick around I'll demonstrate a little bit later but we we offer a daycare specific Financial projection template so that you'll be able to create projections if you need to at the very end of the video I'll give you a promo code that you can grab that template for a discount if you don't need it this will still be very important information you know you can ignore that piece of information and if at any point you're enjoying the content here please like the video that really helps us feel free to subscribe as well we release other daycare Finance related content as well just in general running your business and and how that can help you so here we go we're gonna go through this now you can see from this quick table of contents the overview of the structure get your executive summary a little bit more description about the business market analysis um service and product line you know is probably a little bit too formal you know essentially what type of amenities and and you know programs and that kind of stuff is your daycare going to offer the marketing and sales strategy and the operation structure and then of course the financial plan projections which is kind of our expertise and then you'll wrap it up with the conclusion so as we go through here um the executive summary so this is really just it's like a cover letter for a resume so it's the short and sweet description if you're let you hand this to your lender if you can imagine physical paper or even a PDF and they open as the first page they see kind of want to give them the highlights of everything they're about to read so that can include you know obviously the name we're going to be located are you going to have a specific focus is there going to be something that really stands out that you know you want to make sure you that comes across at the beginning maybe the total startup costs that kind of stuff so really hit the high points in your executive summary the company description is just a little bit of an elaboration of that so maybe you know this is where you're going to talk about yourself or maybe your experience as you're going through that and we'll do key Point number one your lender especially for daycares this is actually one of the industries that is it's extra particular about this is your lender is going to want to see and know that you have the experience or your team has the experience to actually be successful with the daycare because it is a sensitive business topic you know people trusting a daycare center with their kids you know if when I'm taking my son to daycare I'm picking out daycare I really want to have people feel confident that these people know what they're doing same thing is true from a from a lender perspective there has to be that confidence there so this is a good section the company description describe yourself a little bit if you're going to be doing this in your home for example and it's going to be just you then you really need to drill down like why can you do this have you done this before to give the lender some confidence if you're going to have other people working for you what is their education what's their background what's their experience so that's one of the five key points there has to be relevant experience that you can demonstrate in your business plan and really make sure you focus on that something I I forgot to mention at the beginning of this is contrary to popular belief a lot of people think like man my business plan needs to be 40 pages long and I assure you that is not the case as a lender if someone handed me a 40 page business plan which did happen often let's just say there's no way we're going to read 40 pages of that for industries that maybe are more novel or there's not many of them or It's a Brand New Concept okay the business plan does need to do the job of Education as well as demonstrating the plan for success for an industry that has existed for a little while or a concept that's not novel like a daycare facility the job of the business plan is not to educate what you're doing you know or what the opportunity or what the industry is it's to focus on your specific plan to succeed why is your daycare going to to grow and pay back the loan and you know generate the money that you think it's going to so that's that's really what the key focus of this so a five to ten page business plan as long as it can demonstrate that is great you know so don't don't get bogged down in the link of the business plan just make sure you're including what's necessary so keep scrolling through here on to key Point number two your market analysis so that makes it sound a little bit fancier than it needs to but really you're just trying to demonstrate that there is a need for your service where you're going to offer it cares is one of those industries that I think just in general most people especially if they have kids right now just know there's a great need for child care the pandemic impacted that quite a bit you know some day cares you know shut down when people were staying home and not as many have reopened up and so it's a bit of a transition period right now but I'm going to demonstrate a quick example of how you can do this section so it's not enough just to say like you know like here in this example it says 25 mile radius actually actually this is a little bit better meme than I expected but it specifically points out there are 12 other certified day cares within a 25 mile radius the proposed location so you know so let's say it's a major city and there's 12 and obviously there's going to be demand it's a really small town then maybe there's not a great you know Mark for this sample right here if this was going to one step further it might say in that 25 mile radius you know there's 400 000 people living there then that helps kind of set that table a little bit so something you can do a few things you can do to help demonstrate this is good old-fashioned Google here has some free tools that we can use so a few ways we can do this I'm on Google's Keyword Planner this is free you can make an adword you have to make a Google AdWords account it's totally free to do but you can use their Keyword Planner so I can look for something like daycare center near me so you can see or actually you can't see right here but I'm located in the Indianapolis area okay so let me let me pull that up I want to look in Indianapolis and it's doing kind of the greater Indianapolis area you can see that map so it's saying there's over 5 million people in that that area so it's gonna say if someone was searching for a daycare center near me and they're located in that how often is that being searched so let's see what it says here quite a bit you know so we see daycare near me almost 10 000 times a month you can see here look how that's growing as well 49 over a three months so it's growing year of a year up 22 so that's a pretty good indication okay there is definitely a need in the greater Indianapolis area so if I want to zoom in a little bit more go to good old-fashioned Google search I just search for the same thing Day Care is near me and so you can see I live on the northeast side of Indianapolis and I can see like you know okay there's a good chunkier you know me knowing the area I know that this number of daycares is probably you know it's probably still a lot of demand that these daycares aren't that aren't meeting now this doesn't include maybe you know the at-home daycare is probably not going to be included on this list nannies aren't going to be included on this list so this is more like certified daycare centers but this is the type of thing that you want to demonstrate to your lender that there's an opportunity that there is there is a market here's another quick study you just found from doing some Googling that you know shows how few how much the number of certified day cares is decreasing so we know that there is good need so that is a quick demonstration on like do that type of stuff include that grab screenshots put some numbers in your market analysis here okay moving along describe your daycare services are you going to offer extracurriculars are you going to teach you know a second language or are you going to have field trips whatever all the enrichment type activities the curriculum details include that here you have the experience with that so you'll you'll know what kind of detail you need to go into now coming up to point number three marketing and sales strategy in particular what's most important about this section is how are you going to acquire customers so saying like we're going to have a website and post on social media isn't good enough got to give some confidence that you're gonna have a good Head Start you know you're gonna you're gonna have no problem getting some kids in so examples of that might be maybe you're starting an at-home daycare you say I live in a neighborhood with 450 other homes there are a couple of hundred you know kids that are younger than school age and there's no daycare center within 10 miles of us I have talked to the other families in the neighborhood and I know that if I opened up I would have 10 kids tomorrow that's a great example of customer acquisition gives you confidence if you're going to establish a bigger Center um you might you know or facility you might need to be a little bit more than that you know you might have said like I've gained the signatures or I started a Facebook group and I had a thousand families joined that said that they would be interested in sending people so that's the type of stuff for customer acquisition it's not going to be good enough to say we're going to build a facility and people are going to show up now you know for an industry with this greater need as daycares that might actually still work but when you're trying to convince someone to give you money per lender going the extra mile and it's a helpful practice for you to give you confidence that what you're going to do is succeed to have that road map forward so that is key Point number three now let's continue to move through here a little bit operations plan this this kind of goes along with maybe the experience a little bit so you can elaborate a little bit more on the the makeup of your team the structure of the business here you see details on like trainings and certifications that's all good information included including here to make sure that you've thought about that type of stuff so okay and then Financial projections we are biased this is what we think is the most important part of your business plan coming from my experience as a lender this is what we spent 90 of the time looking at you know you read the business plan make sure okay they got these things including these other key points talking about but what you're really drilling into when you're making a decision is this financial data and a narrative around that so don't be afraid to include you know more text describing what you're you're seeing here so all of these charts you're seeing so we've got startup costs here and a five-year breakdown of you know some of the key line items from the financials including plan for profitability so you can see 23 all the way out to 2027. most lenders are probably going to want to see at least three years especially if you're a startup you can see some greater detail on little kids and the rooms and all that kind of stuff sales growth and then key ratios then you'll see full-blown financial statements financial performance uh lenders like to call them I'll do a quick plug here all of these were generated with our daycare specific projection template so this is built to be very doable on your own as DIY if you do purchase it and you have questions of course we'll help you answer those questions and make sure you get taken care of but I just want to give you the confidence that we've had a few hundred people use this template to create projections for for their daycare so be able to include the types of rooms you're going to have how many rooms including the the ratio so that you can make sure the ratio is correct um per year States you know requirements how much it's going to cost for those kids and it's going to generate all of this Revenue data for you be able to put in your expenses that you plan for over the the first five years and any employees you plan to have and then it's going to generate all of that information for you all the financial statements tidied up exactly how your lenders are going to need so that's just a quick plug I'll go ahead and Link this in the description as well and give you a promo code at the end of the video for that so key Point number four now is are your financial projections realistic So within the industry standards so if you kind of come in and your revenue is way higher your profitability is we're going to be 70 profit and that's going to raise that's going to raise some eyes eyebrows for your lender so you want to make sure you're not an outlier right so the best way to do that this is not that surprising when answered again is to do Google searches some of the key things Revenue profitability tuition rates that kind of stuff you want to be within not only the maybe National Industry standards but but also like in your community you know what are other day cares charging you want to be too high you don't want to be too low and so you can do things like what's an average profit margin for a daycare center around 15 you know so when I'm making my projections I want to see am I going to be around 15 so this you know not gross that was net so after you know you backed out of these things so seven percent twenty percent that's within reason right so that's really important is to make sure it's going to be in line with that when is the business going to be positive cash flow and then your lender is also going to want to to know the debt service coverage ratios that you know they'll probably calculate that based on your projections but they're going to only see that be 1.2 or higher and what that means is that they want your projections to see that you're going to have a dollar and 20 cents in free cash flow monthly or annually for every one dollar of debt payment because they want to see that apart from all the other things you got to pay you also you're gonna be able to pay back the loan okay so hopping back over to the business plan now the the projections are going to round it out apart for the conclusion here but I have one more key point to make and that is what we like to call skin in the game in the lending industry so your lender is going to basically they're going to expect you or invite you in to take some mutual risk so say you show up and you're like I need 150 000 to build out this facility for a daycare you are going to be expected to contribute some percent of that just like putting a down payment on a house you're buying into the risk a little bit you're mitigating the risk for the lender a little bit so you're probably expected to put in 10 or 20 of the cost of that now maybe you don't have cash or not enough cash or you know maybe the lender is concerned about a credit score or something like that um they'll try to further mitigate that with collateral so if that's a title to a free and clear car a second mortgage on your home you know something like that now I a lot of people don't have a lot of sympathy for lenders and I totally understand that but just putting the lender hat on you know when I was a lender where that's coming from is they don't want to do that to wreck your life if you don't pay back the loan and chase you down forever they just want to have some assurance that you know they're not throwing away their money and so you got to keep that in mind that's where they're coming from a lot of people get the advice of like well I want to keep the business separate from personal that makes sense when it comes to bank accounts but anyways they like to keep that separate keep things tidy from a bookkeeping accounting standpoint I totally understand that but when it comes to actually getting a loan you just be prepared that that is going to be an expectation you're going to your your personal life is going to be wrapped up in this because the lender is going to want to have assurances they're going to give it pay back so that's the quick run through of the business plan again grab this template for free down in the description if this was helpful to you at all please like the video feel free to subscribe to our channel for more tips about just being an entrepreneur in general and growing your business and staying on top of your financial components of that but also feel free to reach out if you have questions grab this template I promised you a discount code you can use ph20bp to enjoy a 20 discount on the template this template I believe is 79 and so it'll bring that cost down a little bit I assure you that's much cheaper than if you were to have a CPA prepared it you're going to have to have Financial projections if you plan to get a loan for a daycare and and we also are happy to provide a complimentary review of your projections if you already have some you want an expert to take a look and give you feedback for some potential pitfalls feel free to send it to us at support projectionhub.com we'll give you some feedback and yeah thank you so much for sticking around best of luck foreign