Childcare Center Financial Model (10 Year Financial Forecast)

This Childcare Center Financial Model Template has been built for use by any Childcare Center owner or executive looking for a simple to use 3 way financial model (Income Statement, Balance Sheet and Cash Flow). This model also incorporates a company valuation assessment to give the owner an idea of what their business is worth. The Model offers financial forecasts for 10 years and has been purposefully built to suit any Childcare Center. Detailed assumptions are included on Capacity of each Room (Nursery (0-2 years), Toddler (2-3 years), Pre-School (3-5 years)), as well as Worker To Child ratios per room (i.e. # of childcare workers required to work for a set amount of children based on age/room). The Model has also included Wages assumptions for Worker staff depending on Level of qualification and Leave entitlements. For each Room (Nursery, Toddler, Pre-School) we have provided detailed assumptions on the capacity of each room by children, the attendance growth, the churn, and the utilization % in order to measure how efficient each room is. Other ratios, charts and summaries are also provided throughout the model and users will easily be able to navigate the model with all input fields highlighted in Blue font. These models are designed to be the perfect financial tool for business owners looking to make decisions for their Childcare Center, forecast their Centers expectations and also look to see what their Childcare Center is valued at based on future cash flow projections. This model can also be a perfect tool to give to external stakeholders or investors that want a snapshot of how a business is currently performing and what the forecasts look like.

General Assumptions

Starts with basic model questions on start date of the model, tax rate assumption, working capital assumptions and funding assumptions.

Revenue and Direct Cost Assumptions

Revenue assumptions are the anticipated factors that drive a company’s income generation over a specific period. These assumptions form the basis for financial projections and are crucial for planning and decision-making. In our model we have included detailed assumptions on the Capacity of each Room (Nursery (0-2 years), Toddler (2-3 years), Pre-School (3-5 years)), as well as Worker To Child ratios per room (i.e. # of childcare workers required to work for a set amount of children based on age/room). For each Room (Nursery, Toddler, Pre-School) we have provided detailed assumptions on the capacity of each room by children, the Room Daily Charge Per Child, the attendance growth, the churn, and the utilization % in order to measure how efficient each room is..

We have also included Direct Costs of running a Childcare Center with Wages assumptions for Worker staff working in each Room provided, along with the # of Workers required depending on the Worker to Child ratio for each Room. We have also included different levels of pay for Workers depending on their Level of qualification.

Operating Expenses Assumptions

Operating expense assumptions are typically based on historical data, industry benchmarks, market trends, and management’s judgment. They are crucial for estimating the total cost of running the business and for determining profitability. Like revenue assumptions, it’s important to regularly review and adjust operating expense assumptions to reflect changes in the business environment and ensure the accuracy of financial forecasts. In our model we have included detailed inputs on Staff costs (Center Manager, Chef, Other), and Typical Operational Expenditure items likely for a Childcare Center business including Rent, Supplies & Equipment costs, Food & Nutrition costs, Cleaning & Maintenance, Utilities, Licensing Fees & Insurance, Professional Services Fees and Other costs, however, you can add any other expenses you think may be relevant to your business in this sheet. 

Funding, Capex and Other Assumptions

Capital expenditure (Capex) assumptions refer to the anticipated investments a company plans to make in long-term assets, such as property, plant, equipment, and technology, over a specific period. These assumptions are crucial for financial planning, budgeting, and forecasting, as they impact the company’s cash flow, profitability, and growth prospects. We have included an ‘Initial Costs’ schedule which shows the main costs in operating a Childcare Center business including Renovation + Improvements, Playground equipment, Educational Materials & Toys, Furniture, Technology Systems and Other Costs (including Goodwill if you have purchased a Childcare center).

We have also included a Capital Structure assumption section (showing the % of Initial Costs funded by Equity vs Debt).

A Fixed asset schedule has been included showing the main items likely to be on a company’s capex sheet, the total costs and the assumed useful life of each asset. 

Monthly Projections (10 Year period)

We have broken down projections on a Month by Month basis when projecting Income Statement, Balance Sheet and Cash Flow Statement items. The monthly projections are provided over a 10 year time frame. This is particularly useful for businesses looking at month-on-month trends and insights in the business, which leads to better decision making and also better budgeting should there be a need to either raise more capital, pursue growth opportunities from excess capital or pay down interest bearing debt. Monthly projections also help a business ascertain what performance may be seasonal in nature when looking at growth projections on a month-over-previous-year’s-month basis.  

Annual Projections (10 Year period)

The model has Annualized Financial Projections of Income Statement, Balance Sheet and Cash Flow Statement over a 10 year time frame. Annual projections provide an excellent overview of expected revenues, expenses, profits, cash flow, and other key financial metrics for the upcoming year. Annual projections are essential for strategic planning, budgeting, fundraising, and performance evaluation for any company at any stage of their business cycle. 

Childcare Center Financial Metrics & Other Metrics

Childcare Center Financial metrics and Ratios have been included which highlights Revenue by Room (Nursery Room, Toddler Room, Pre-School Room), Utilization % by Room, Gross Margin % by Room, Direct Costs and Operational Costs as a % of Revenue, Profitability Ratios – all over a 10 year time frame. 

Summary of Financial Statements (10 Year period)

Summarized Financial Statements over a 10 year time frame helps for better snapshots of financial performance. Income Statement, Balance Sheet and Cash Flow Statement all provided. 

Charts

Charts available including Profitability Margins (Gross Profit Margin, EBITDA Margin and Net Profit Margin), Revenue vs Direct Costs Projections, Revenue By Category and Cashflow Summary

DCF Valuation

We have included a Discounted Cash Flow (DCF) Valuation model showing the Net Present Value (NPV) of the Business based on a series of growth rates and assumptions. Weighted Average Cost of Capital Assumptions also provided including Risk Free rate, Beta, Risk Premium and Equity Risk Premium. A DCF valuation is a method used to estimate the value of an investment, business, or asset by discounting its expected future cash flows to present value. It is based on the principle that the value of an investment is determined by the present value of its future cash flows. The DCF valuation technique is widely used in finance, investment analysis, and corporate finance for making investment decisions, determining the fair value of securities, and evaluating the worth of businesses.

Depreciation Schedule

Detailed Depreciation Schedule shows additions / disposals to the Fixed Asset Register of the business. Sections included for Renovation + Improvements, Playground equipment, Educational Materials & Toys, Furniture, Technology Systems, Others. 

Debt Schedule

Debt schedule provided with interest rate assumptions and payback period assumptions included. 

Equity Schedule

Equity schedule provided with assumptions on all investments into the business by investors or owners.