Obtaining Financing When Opening a Day Care
Opening a day care is a dream nurtured by many people for many reasons. Some of these individuals may work in a day care center and believe they could do a better job with the added benefit of becoming self employed. Many stay at home parents figure they are already doing child care what difference would a few extra kids make except an increase in income. And lots of people are just straight tired of nine to five working for a boss who doesn’t care about them. So they dream. But, most of these people that want to establish a child care business never succeed in doing so due to a lack of funding. However, there is hope and this article will introduce you to ideas on how to obtain the financing required to start a day care business.
The first method that is involved in obtaining financing when you want to open a daycare center at home is to develop an effective business plan. Every business has to have a plan, even if it is a business that will be operated from home. A business plan is basically the methodology behind your daycare business. It may include the general purpose of your daycare, how you plan to separate your home life from your business life, how you will use your home effectively to operate the child care services that you will provide, as well as how much money you expect to gain from your daycare at home.
The second method involved in order to obtain financing when you want to open a daycare at home is to structure your business appropriately. It is important to detail how much it will cost to prepare for the daycare center, how much the supplies for the center will cost, and how much it will cost to open the doors for the first time. Many people also include the expected continual expenses that are associated with operating a daycare in the home on a consistent basis. This may include utility costs, food costs, and costs related to games and activities that may be provided in your daycare.
Every lender will want to see you put your money where your mouth is so you will need to be prepared to invest a certain percentage of your own funds in your day care business. This applies to starting any business and child care is no different. If you are willing to make the commitment of investing your own money in your day care business then a lender is going to be more willing to provide you with the funds you request. Remember, from the financial institutions point of view you are a huge risk, many new businesses fail every year so if you believe enough, and have committed to saving towards opening your day care then they will be more likely to entertain your application.
The fourth method in obtaining financing in opening a daycare center at home is to offer some sort of collateral. This is a very important, yet risky step. You must be certain that you are confident in your ability to own and operate a daycare at home prior to handing out items for collateral. This is especially true because many of these items are high priced such as the home itself, and vehicles. However, many lenders are comfortable in financing a business if they have a promise of something in return if the home business fails.
As a daycare owner and parent Fiona Lohrenz has extensive knowledge of childminding which she writes about on her child care website. She has also used this knowledge to produce a ‘Start a ChildCare Business’ DVD guide: StartChildCare.com You can find her at her website: ChildCareOnly.com
- Rene Sandan
:: Aug.28.2008 :: Business :: No Comments »
