New Here - Estimating Start Up Costs To Get a Loan

[Guest]

Hi Everyone!

I'm new on the forum. This is a question for those who started up a child care center.

I am putting together the business plan to get funding for a new child care center in Texas and one thing that seems to be missing in everything I read is the process of how to go about estimating the start-up costs so that you can go get a loan.

We are planning a facility that will serve somewhere between 30 and 50 pre-K kids.

We want to be able to qualify for the Texas Rising Stars program, so we want to design it from the ground up to comply with those regulations and requirements, but how do you do that?

Do you call an architect and get them to give you an estimate on how much it would cost to renovate and design a space? A mortgage broker?
How do you estimate the costs for equipment per child?

Can you recommend any book, website or organization that can help walk us through the costs?

Thank you very much for your assistance!

Best regards,

Susan

[Blackcat31]

Welcome to the forum!

[Sugar Magnolia]

My husband and I opened a center, we did it all ourselves.
Are you renting or buying the property? Include one year of rent/mortgage
Staff costs for one year
Renovations
Taxes
Insurance
Inspection/licensing fees
Furnishings
Toys/materials
Advertising
Professional services (lawyer, CPA)

You can either hire a professional planner, or roll up your sleeves and do the hard work yourself. There is no magic number per child. Go price commercial rental spaces, look through early childhood catalogs, make calls.

[SusanB]

Hi Sugar Magnolia,

Thank you so much for your response.

We are still exploring whether to lease or buy.

• How did you estimate the cost of renovations?
• Can you tell me the names of the early childhood catalogs that supply to the industry?
• What do you need the lawyer for? I know we can use Legal Zoom to fill out the information for incorporation or to become a non-profit, but is there anything else we need the lawyer for ? If so, what ?

We need to figure out an estimate for these costs before asking for a loan.

Best regards,

Susan

[Sugar Magnolia]

Susan,
Until you have a location picked, it's hard to estimate renovations. Basics like new paint, new flooring, etc, but some buildings may need other things, so I would estimate based on anticipated size of the proposed building.
Catalogs.....I like Discount School Supply, Early Childhood Manufactures Direct and Constructive Playthings. Kaplan too, but they are more expensive.
If you are buying a building, you will want a lawyer to review the contract. (trust me on this one!) If you are renting, I would have a lawyer review the commercial lease. If you need to apply for rezone or conditional use, you might want to consult a lawyer. You might want to have a lawyer prepare or review any contracts or documents you want parents to sign.

Good luck!

[ECEVA]

Sbdc

Hi - I was able to get preliminary numbers when creating my business plan. Have you visited your local small business development center (SBA.gov and search by zip code)? They usually have contractors, attorneys, accountants that are willing to review your needs and give you rough estimates.