Daycare Service Facility 10 Year Feasibility Study Template (Excel XLSX)

I really like building capacity models. It gives a great framework and sizing context for producing realistic financial projections. A daycare service is going to have capacity limits (max number of seats available) as well as seasonality. It took some research to understand the most common pricing structures of these businesses and once I had a good grasp on it, the model came together nicely.

My goal was to make the assumptions as flexible as possible and so you are getting three revenue streams:

1. Tuition Monthly Recurring Fees – Based on up to 11 care types (differentiated by age group, number of days per week, maximum seat capacity and monthly price. So, you may have a cohort of ages 2-4 that need care 3 days a week or 5 days a week, each would have a different monthly price. To plan for seasonality and growth, the user can also enter the starting capacity achieved as a percentage of the maximum as well as the annual improvement in that figure. Additionally, there is a capped stabilized capacity that can be defined for each cohort to eliminate the user from having to manually do the math on capacity growth.

2. Drop-ins (one-time fee) – The daycare facility may offer a one-time price for a drop-off or just a single week of care or 2 days / 3 days or what have you. I built two potential drop-in types, and each the user defines the number of drop-ins per month, the price per day, and the annual growth rate.

3. Registration Fees – Since the model runs off maximum capacity attained, there is no actual churn rate, but there is a 'turnover rate' which defines how many seats are turned over per month on average and the fee for registering new tuition seats.

To make things easier to analyze, the monthly and annual pro forma detail display the number of filled seats per month and the total filled seats across all cohorts as well as the total drop-ins per month. This will make it easy to understand if the assumptions that were selected are reasonable.

Another big part of this financial model is direct costs. This includes anything that is directly required to provide the service. Food / meals, diapers, toys, bottles, etc. To properly account for this aspect, the model has an input for the expected monthly costs of each seat per cohort. There is also a detailed schedule where the user can itemize all the individual direct cost components that make up the total monthly direct costs. A similar structure was done for drop-ins as well.

Another core component of daycare facilities is staffing. This model has a robust section to enter staff count by type, start month, monthly wages, and payroll taxes / benefits (set individually for each type).

After going through all the various assumption tabs, a monthly and annual 3-statement model auto-populates as well as a DCF Analysis, IRR, and the resulting cash flows. There is an option for this to be a joint venture or single operator funded as well as an option to finance some of the startup costs / net burn with a loan.

You can run the financial simulation for up to 120 months and include a terminal value at the end month if desired. It is based on a multiple of trailing 12-month EBITDA. I've also included some KPIs such as average monthly tuition per seat and DSCR.

Instructional video included in file.