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CENTER CHECKLIST
(not inclusive)
- Complete your Due Diligence.
 (Check the sex offender website.)
- Check on licensing, zoning, sewer, water, fire and safety.
- Decide on business type
- For-profit
- Non-profit
- Partnership
- LLC
- Sub S-Corp
- Register with State
- Get an Employee Identification Number (EIN)
- Develop budgets—Start Up and Annual Operating. List Income and Expenses for each. Prepare Operating Budget first as it will help you see if your planned income and planned expenses allow for a financially stable program.
Operating Budget
Income:
- Parent’s fee*
- Registration fees
- Transportation fees
- Food Program
- Other fees (slot, activity, etc.)
- Misc. income
Expenses:
- Staff/owners wages/salaries (FT, PT, substitutes)
- Fringes (Social Security, FUTA, worker’s comp., unemployment)
- Staff raises or increases in minimum wage
- Outside services (accounting, payroll, cleaning, etc.)
- Rent (triple net or CAM)
- Loan payments
- Bank charges
- Insurance
- Utilities
- Supplies (food, kitchen, teaching, office, cleaning, etc.)
- Equipment and furniture
- Continuing staff training
- Annual license/inspection/permits
- Reserve/replacement/contingency fund
- Cost of field trips, special events, etc.
- Office supplies
- Computer, software and internet fee
- Telephone/fax/copier
- Consumable supplies (crayons, paper, glue, etc.)
- Books, toys, playthings
- Allowance for bad debt
- Advertising/marketing
Start-up Budget—helps you determine the amount of money you will need to get the business up and running.
Start Up Budget Income:
- Bank loan (debt financing)
- Personal money (equity financing)
- Other
Start Up Budget Expenses:
- Capital costs (building, land, equipment)
- Professional fees (architect, lawyer, CPA, contractor)
- Start up staff wages and fringes
- Staff training
- Board of Directors cost
- Rent/Lease payment
- Deposits (phone, electricity, natural gas, etc.)
- Utilities (while you are moving in)
- License and inspection fees
- Supplies
- Equipment (don’t forget the playground)
- Vehicles
- License and inspection fees
- Advertising
- Cash reserve
- Other
Keep in mind:
Utilization factor—you will never be at 100% capacity all the time. You need to allow for those drops. Suggestions on the utilization factor run 80% for new programs to 90% for established programs.
Utilization rate—your best guess (be conservative) as to the percentage of full time enrollments over a year. e.g.—your max capacity is 50 children. Your fee is $100/week/child. 50 X $100 equals $5000 per week. 52 weeks X $5000 equals $260,000 per year maximum total income. (assumed your only income is parent fees).
If you are a new program, using an 80% rate, your actual annual revenue will be closer to
$208,000. ($260,000 X .80) Prepare your budget using the $208,000 or come September/October you will be short of money.
Rule of thumb—To cover overhead and non-salary expenses, you need to double the amount you would charge per child from the amount that is needed to cover salary only. e.g.--If you pay an employee $20,000 per year to take care of 10 children ($2,000 per child); you will realistically need to generate $4,000 per year from each of those 10 children. $20,000 for salary and $20,000 for other expenses and overhead.
*Always charge based on enrollment, not attendance.
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