20 steps to Start A Profitable Preschool and Reduce Expenses

Congratulations on making the decision to start your own preschool! Whatever your reason, whether you’re a teacher with a vision or a parent who sees a need, opening a preschool isn’t easy. If you want to run a successful preschool, you need expert advice, a clear preschool business plan, and preschool software or a childcare management app to help you stay organized and streamline your operations.

A preschool business can be a good choice if you have a nurturing spirit, plenty of energy, and an interest in stimulating young minds. In this business, you will provide supervision, fun activities, and educational opportunities for small children. In most cases, starting a preschool business means working with 3- to 5-year-old children. You can run a preschool business out of your home, in many areas, or from a commercial space.

So does your community lack quality preschool and childcare programs that prepare them for kindergarten and beyond? Here’s a data source on the number of kids in your area.

Your success in opening a preschool will depend on careful management of the startup process. This guide will explain exactly how to start your own preschool, from writing a business plan and choosing a location, to marketing, hiring, and managing your day-to-day operations with the help of a preschool app.

Before starting any business, you need to determine if it is right for you both personally and professionally. Here are a few items to think about.

Looking to start a daycare? Read step by step guide on how to start a daycare

Related article: 10 common challenges faced by preschool teachers in 2022

1. Create a business plan

The very first step towards opening a preschool is thinking like a business, and a proven way to do so is by creating a business plan.

You’ll need to do your research, with a focus on understanding the costs involved in successfully launching a profitable preschool business.

Writing a business plan is a helpful exercise that forces you to plan ahead and anticipate many of the challenges that can often lead to failure when they are overlooked, such as:

Is there enough demand for a preschool in your area (e.g. are there more families with young children in your area than existing preschools can accommodate)?

  • Are there enough working parents or big offices in your area?
  • Are you able to get a favorable rental term?
  • How much will it cost to operate your business?
  • Validate your idea with your friends and families.
  • How much will you need to charge per child, and do you have enough space?
  • How will you promote your preschool business to get children enrolled?
  • How many families with young children live in your area? How many of them need child care?
  • Who else is providing preschool in your area? Is there a need for preschool for a specific age group?
  • What is the market rate for preschool in your area?
  • How much will it cost you to operate a program on an ongoing basis? What do you need to charge to have a profitable program?
  • How will you attract parents?
  • What will make your preschool or child care program stand out from the rest?
  • Are you using your own money, or are you seeking a small business loan? Have you looked into preschool grants?

2. Find a location for your preschool

Are you opening a small, home-based preschool, looking to rent an existing preschool facility, or starting a preschool from scratch with a brand new facility? In any case, you’ll need to find a home for your preschool. Check your city’s zoning laws and preschool licensing guidelines when you’re making this decision to be sure your location is compliant.

When making this decision, consider that home-based preschool businesses generally have fewer expenses and lower overhead, have more flexible hours, and are more convenient for you and, likely, the parents whose needs you will be serving. The legal requirements to operate a home-based preschool business are also generally less strict than those for a center-based preschool business.

On the other hand, a center-based business—while probably more expensive to establish and operate—will provide greater space so you can expand your business and earn greater revenue.

3. Competitor Research

You will be able to compare services provided by competitors must be considered and compared to your own services. For example, what kind of curriculum is being offered? Is it new and innovative? If not, how can this be capitalized on? Other concerns might be special services such as longer hours, pick-up and drop services for kids, special needs children, sick child care, or after-school program. Also, what are the rates for these services? The bottom line is provided the parents with the best value!

4. Curriculum

You need to spend a lot of time in research for a good curriculum for your preschool.

Your business plan should include a mission statement that will guide your curriculum and program philosophy.

Whether you adopt an existing pedagogy or create your own written framework, provide a learning environment that starts children down a road toward academic success and enhances their skills and knowledge. You should keep the following in mind before choosing a curriculum for your preschool

Based on current child development research. It is not acceptable to just throw out a program that is purely “fun.” You must actually research how children learn best and incorporate that into their model.

Practical to implement. It should have guidelines for not only how to structure the learning activities themselves, but also on how to set up the learning environment, how to interact with parents (if you are a classroom teacher), and how to adapt lessons to meet individual’s needs.

Provide support and training. This is especially important in the beginning when teachers and support staff are learning the materials themselves.

Appealing to children. Of course, the activities that the children participate in should be engaging, as well as be instructional.

Broadly there are these curriculums which are followed the most in the world

Ace childcare marketing with these actionable strategies Download the ebook now!

The Montessori program

Founded by pediatrician/psychiatrist Maria Montessori in 1907, Montessori school programs (there are over 5,000 in North America) emphasize the importance and connection of all living things, and the need for each person to find meaningful work and his or her own place in the world. Children learn about other cultures, animals, and plants in addition to reading, language, and mathematical skills.

Who it’s best for

“Kids who want a hands-on learning environment suited to their own needs,” says Chelsea Howe of the Montessori Foundation. Special needs children thrive, especially those with attention deficit disorder (ADD) or other learning or psychological problems, because of the individual attention teachers pay to each student.

The Waldorf approach

According to Rudolf Steiner, founder of the first Waldorf school at the Waldorf Astoria cigarette factory in Stuttgart, Germany, in 1919, a person is made up of three aspects — spirit, soul, and body. The more than 750 Waldorf programs around the world aim to stimulate and develop these three elements in young children by immersing them in nurturing surroundings. Kids are encouraged to engage in creative free play rather than watching TV and videos and playing computer games because those activities get in the way of using all five senses to absorb and actively engage in life.

Who it’s best for

Waldorf programs tend to be more group-oriented than those at Montessori schools, for instance. If your child thrives on order and rhythmic repetition, this may be the best option. But a Waldorf education can benefit almost any child, says Patti Regan of the Waldorf Early Childhood Association of North America. Waldorf teachers believe that even children with special needs can bring something important to a group. However, the program is not recommended for children with severe developmental disabilities.

The HighScope approach


The HighScope program is based on the theory that children need active involvement with people, materials, ideas, and events. It is a curriculum of “shared control” in which adults and children learn together. Like Montessori, the core belief is that children learn best by pursuing their personal goals and interests. In HighScope, however, children are encouraged to make their own choices about materials and activities — teachers are trained to support this independence and decision-making. The HighScope approach is newer than the Montessori approach but has four decades of research proving its effectiveness in promoting children’s development

Who it’s best for

The HighScope program is a good fit for any child who needs individual attention. It was originally created for at-risk urban children and used successfully in conjunction with the government’s Head Start program. Today it is more widely used in a variety of preschool settings. It’s also effective for children with developmental delays and learning disabilities because it is tailored to each child’s individual level and pace, explains Ann Epstein, a developmental psychologist and director of the preschool department at the HighScope Educational Research Foundation. If you want your child in a very structured, adult-directed environment, HighScope may not be the way to go.


In a nutshell, hundreds of independent preschools and childcare centers around the country don’t follow any one of the preceding approaches to the letter, but instead, mix and match various elements of them to form their own program. Activities and curricula based on the work of Jean Piaget, a Swiss development/education pioneer who died in 1980, are also popular, as are schools modeled after hugely successful preschools in Reggio Emilia, a town in Italy.

4. Invest in preschool software

One of the best ways to start a successful preschool in 2019 is to take advantage of the amazing preschool technology at your disposal. Streamline your administrative tasks with the best preschool app and you’ll have more time to focus on providing your families a top-notch preschool experience–which is your whole goal anyway, right?

Illumine is an easy-to-use child care app that will help you manage your preschool and stay in touch with families. Your staff can use illumine for recording and tracking daily events and activities, and parents get real-time updates delivered to their mobile devices throughout the day. Delight parents and bridge the gap between learning that happens in your program and learning at home using our preschool app for parents. Our powerful preschool app also offers secure, digital check-in/check-out, live streaming, and an automated paperless preschool billing system. This is a great way to keep your families looped in on daily activities.

5. Prepare your preschool facility

When you are starting a preschool business, you could expand or renovate an existing facility, open a small home-based program, or find a new site. Whichever option you choose, evaluate the site and neighborhood, verify with your city’s zoning laws and preschool licensing guidelines that your location is compliant, and check your state standards to learn how much space you will need based on the number of children you plan to accept.

Depending on type and size of your preschool and the state it is located in, you’ll need a different type (or types) of insurance. This will include general liability insurance, property insurance, professional liability insurance, and workers’ compensation insurance. Contact an insurance agency or your state insurance commissioner’s office for more information.

Now the fun part.

Transform your center into a place that is safe, clean, comfortable and inviting to parents and children. Purchase child-size tables and chairs, nap mats, art materials, educational toys and games, books, outdoor play equipment, and other furniture and educational supplies for your preschool or child care business. Don’t forget safety equipment such as fire extinguishers, smoke detectors and locked medicine cabinets.

6. Live Streaming / CCTV access

In our last blog, we had highlighted why allowing preschool and childcare parents to give access to school’s cctv is a good idea.Parents are full of anxiety, apprehension, and doubts when they leave their children in a school. The best way to relieve them of their anxiety is to give them live access of the classroom. You can buy preschool software that has an integrated live streaming feature so you can control the access of the parents.

Schools realized the parental concerns and apprehensions. Over time these reduce too once the child gets comfortable. But research has shown that parents prefer to put their kids in schools which has live streaming access for them. The modern chains realized that and now even smaller ones have started following it. Some of the schools that were the first movers in this were

7. Obtain necessary licenses.

In the vast majority of cases and countries, you will have to apply for and be granted the proper licensing in order to care for children. The type of licensing you will need will depend on your jurisdiction and country. Your local municipal government office should be able to tell you what licenses you will need to obtain in order to run your preschool business. Your state’s licensing office should also be able to provide you with an overview of the licensing requirements applicable to you, which you should read carefully. This process will likely involve some or all of the following.

Attending an orientation session where you will learn about state and local requirements for operating your business and complying with applicable state law.

Filling out a licensing application.

Paying a licensing fee.

Working with the licensing agency as it reviews your business plan, inspects your facility, and completes the licensing process.

Taking classes focused on CPR, first-aid, and the like. Have these instructions pasted on the prominent locations of your preschool facility?

Undergoing a background check (and fingerprinting) for you and any prospective employees.

Undergoing medical testing/immunizations for you and any prospective employees.

Get a license from the fire safety department. You should have a fire evacuation plan as well as fire-extinguishers in place.

Parents always appreciate transparency since they are leaving a piece of their heart with you. If you explain to them your process and that you have met all the safety requirements then they will have a sense of assurance.

8. Market your preschool business and seek applicants

At the very least your child care center will need marketing collateral and an online presence. Make sure you register yourself in the google business directory. You should hire a digital agency to make sure your business is marketed to parents who are searching schools for their kids. You should create a Facebook page. The Facebook page should have your business philosophy and pictures of your facility. List your business in local child care directories and participate in preschool enrollment fairs in your community. You should definitely have a professional design your website and also install live inquiry software on the website.

Let others know about your new preschool business by posting fliers in places parents frequent, such as libraries, grocery stores, and community centers. Place ads in local newspapers and phone directories as well. In addition, ask local schools that do not have preschool programs to refer parents of preschoolers to you or allow you to post fliers on their bulletin boards.

Starting a preschool center can be challenging, but running a successful childcare business is extremely rewarding. Make things easier for your preschool with the best preschool app for kids, teachers, and parents. Wishing you the best of luck on the journey to open your own preschool.

9. Arrange capital

  • Here are some tips for raising capital for your preschool:
    Maintain a good credit score. A positive balance in your business bank account is a good sign for your investors and comes in handy in a financial crisis.
  • Take a loan for investing in long-term assets like your preschool building, interiors, equipment, or furniture from the bank. Many banks fund small businesses by offering attractive low-interest rates and a long duration to return the money.
  • Remember that the bank cannot fund operational expenditures such as staff salary, bills, rent, and building maintenance. You can raise capital for these utilities by getting your investors to cover for you or relying on liquid funds.

10. Name the preschool

Choosing a memorable name for your preschool is significant as your domain name will reflect it. Here are some suggestions for preschool names:

  1. Miles of Laughter
  2. Play and Discover
  3. Smart Start
  4. Dawn Star
  5. Sacred Steps
  6. Smart Beginnings
  7. New Adventure
  8. Rainbow Sparks
  9. Happy Days
  10. Stepping Stones

When you’re buying a domain name, make sure you choose a trustworthy domain registrar like GoDaddy or A2. Secondly, use a domain availability checker tool like Namecheap to confirm that your business name is unique. If you can purchase the domain name you want, complete the registration and confirm ownership of your domain. If that domain name is owned by somebody else, find the owner’s information. Negotiate a fair price for which they’ll transfer the domain ownership to you. Opt for the former as it’s more cost-effective, and you get the bang for your buck.

Ace childcare marketing with these actionable strategies Download the ebook now!

11. Register your preschool

You can self-register your preschool, but getting an expert’s help understanding the law before applying would be beneficial. Consider hiring an advocate or a consultant. They will reach out to the business registration firm on your behalf and apply for your preschool’s registration.

The Private School Education Act has different regulations globally concerning opening hours, staff qualifications, taxes, etc. It can take 15-20 weeks to complete the registration process. Instead of sitting tight and waiting for your preschool’s registration, we recommend prioritizing other aspects of the business, like marketing and infrastructure in the waiting period.

12. Hire teaching and non-teaching staff

Concentrate on hiring trained staff who carry out their responsibilities efficiently and have experience looking after young children. Experienced teachers bring classroom knowledge to the table and show complete dedication and devotion to the role.

Here are a few things to keep in mind while hiring staff for your preschool:

Verify teachers’ educational qualifications and the preschool certification criteria of staff ratio.

  • Do a thorough background check, criminal check, and take down the staff’s biometrics. The safety and security of the children should be your utmost priority. If something goes amiss with a child, remember that word spreads fast in the neighborhood, and you’ll be subjected to harassment and humiliation.
  • The first day of school can be just as scary for moms and dads as it is for the kids. Transitioning from the comfort of the home to the unchartered school space where everything is uncertain and new can be overwhelming. Concerned parents want to ensure their kids stay safe.

To ease their worried minds, Illumine’s bus tracking feature ensures students’ safety. It lets parents track their children’s movement in real-time with a GPS on the driver’s phone. This feature enables two-way communication between the parent and the driver and smoothens operations.

13. Continual professional development

One of the ways to retain quality staff is to train them to keep up with the advancements in computers and technology. As the world has gone digital (aftermath of the pandemic), it is important to enroll teachers in workshops, activities, and seminars that hone their skills and expertise.

The teacher attrition rate has grown exponentially in the childcare industry. Preschools all over the US, India, and the world are facing low teacher ratios. Teachers are either pivoting to other fields or experiencing burnout, leading to resignations in mass numbers. Not to mention, hiring new staff can cost 1.5-2x more than retaining your staff.

Automating assessment recording, lesson planning, and observations can save teachers 45 hours monthly. With the time they save, you can arrange mental health workshops for them to show them you care. Consider investing in a childcare management tool like Illumine to un-complicate the administrative tasks teachers are haunted by.

14. Choose the right infrastructure

While equipping your preschool with child-safe furniture, keep these things in mind:

  • As children bring their fair share of food and drink spills, opt for durable furniture that offers water and stain protection. It will save you time and money in the long run.
  • Pick equipment with rounded or soft edges to avoid the children from getting hurt.
  • Use slipcovers on cushions and sofas to avoid reupholstering furniture in case of damage or tear.

15. Comply with tax regulations

Pay your tax on time annually to avoid incurring a late fee. The amount you pay for your income tax will depend on the type of entity you own, i.e., profit or not-for-profit. The following preschool items are exempted from service taxes in the majority of countries:

  • Preschool education
  • Education up to higher secondary
  • Vocational education classes

Note: Check your country’s service tax regulations to make an informed choice.

16. Set operational hours

Running your preschool in the morning and evening shifts would be a good idea if you want to boost enrolments. You can have AM and PM class options to double your capacity and add to the choices parents seek. The PM classes can be held for older students, while the AM classes can be reserved for young kids.

17. Invest in automation

Childcare automation allows you to be in control of your preschool instead of your preschool controlling you!

Source: Agility CMS

Extending your market reach to new parents may seem a daunting task, but in reality, it can be 10x simpler with automation. Automation tools reduce costs, improve efficiency, eliminate manual errors, and encourage organizations to go paper-free. They’re a godsend, really.

At Illumine, we aim to provide parents with a top-notch preschool experience by streamlining parent communication. Your teachers can use our app to monitor classroom activities, and parents receive instant updates about them throughout the day. Moreover, Illumine provides a safe, digital check-in/check-out and a paperless billing system. When teachers are free to focus on more productive and critical tasks, you spend less paying them to do mundane tasks.

Another advantage of using automation is student reporting. You can use student data to predict their performance and suggest data-driven measures to improve it. With Illumine, You will have visual charts and cues to support your feedback during parent-teacher meetings.

The data also allows you to increase your productivity. You can track student and teacher attendance, perform cost analysis, and generate bills on the Illumine app. Our app can also integrate with Razorpay, UPI, and other digital payment tools for managing student fees. When you’ve got data at your fingertips, anything is possible.

Teachers who are a message away from the parents inspire trust in families. Thus, Illumine provides teachers a seamless platform to converse with parents and solve their problems. Our communication feature ensures you can chat with parents quickly, effectively, and meaningfully.

19. Improve business efficiency

Regular day-to-day operations require you to be on your toes all the time. Every day, there’s a fire to blow out. Your pre-defined schedules are thwarted by a pandemic, errant students, non-responsive parents, and kitchen mishaps.

We’re here to tell you that while running a business, you’ll see both good and bad days. On the bad days, remember that childcare management tools are your friend and can help you nip a problem at its bud quickly. To file paperwork for day-to-day operations, look into childcare management tools like Illumine, Himama, and Brightwheel. These platforms can help you streamline operations and expand your efficiency in conducting business.

20. Stay organized

It’s difficult to stay on top of your daily tasks while managing children, operations, and staff. That is why we’re huge proponents of color coding. Color coding is an age-old productivity hack to streamline your work. The Illumine app allows you to manage your lead inquiries by filtering them based on color cards.

  • The advantage of color coding is you can filter the leads based on the creation month, status, and source, like a referral, online, etc.
  • You can also filter them by leads you have to follow up with, leads you have closed, or those you haven’t.
  • The best part is that you can customize these color cards, which makes it super convenient to remain organized. Unlike other childcare tools, you can track your leads on our app without spending money on another management platform to keep score. The feature is supported on the web portal for now.

Illumine is everything you need for your preschool business, in one simple app. Download it today!

The post How to Start a Profitable Preschool: An ultimate Step-by-Step Guide appeared first on Illumine.

2 thoughts on “20 steps to Start A Profitable Preschool and Reduce Expenses”

  1. Pingback: A Secret Tool to Help You Build Preschool Curriculum for Daycare - Illumine childcare software

Leave a Reply

Scroll to Top