How to Set Up Your Local Preschool Business

DEFINITION OF A LOCAL PRESCHOOL

Local Preschool: A preschool program held in a home, apartment, church building, or separate building where the owner teaches preschool classes for 2-3 hrs. per class throughout the week to children ages 3-5 and accepts monthly tuition payments for teaching.

While each preschool is unique in teaching methods, curriculum models, and policies and procedures among other things, most preschools do share a fundamental structure:

• The owner teaches a developmentally appropriate curriculum to 3- to 5-year-olds.
• The preschool classes usually run between 2-3 hours per class and are often organized into T_TH classes (sometimes morning and/or afternoon) and M_W_F classes (again, sometimes morning and/or afternoon).
• While the preschoolers’ parents pay a monthly tuition, the preschoolers are actually enrolled for a longer period of time: usually nine to ten months for the school year and two months for a summer camp. In essence, when you sign up one child, most likely you will be creating an income from that one child’s enrollment for at least nine months. That’s a great business if you ask us!

When you start a preschool in your home, you will not only be able to stay home with your kids (if you have children at home) but you should also be able to make either a supplemental or a full-time income depending on how many classes (or children) you teach. This business has been so rewarding for us and our families, and we know it will bless your life as well!

INCOME OPPORTUNITY

First and foremost, let’s remember why we chose to start a preschool in the first place: We love children and we want to help them grow into their full potential. And while that will always be our driving force behind running our preschool, we cannot forget that we are still running a business.

If you fail to structure your business correctly, you run the risk of it failing. And if it fails, then you can’t bless children’s lives anymore. So pay attention. Our goal is to set your business up right the first time so it can support your family.

If you’re constantly worrying about money, you won’t be able to be fully present as a preschool teacher, business owner, wife, and mother. As you take care of your needs, you free yourself up to take care of everyone else’s needs as well.

Without further ado, let’s jump right in and design a class structure that works for your family’s schedule, your budget, and your teaching abilities. Every preschool owner has different needs, so we’ll try to discuss as many options as possible so you can really get brainstorming on which classes you’d like to teach.

Be sure to notice as we go along that by simply doubling your classes (from teaching just one class in the morning to teaching a second class in the afternoon), you can double your income and bless twice as many students!

To give you a working example, we’ll show you how we started out in the very beginning. We had four different preschool classes, each with six children enrolled (i.e. 24 children enrolled). We preferred a class length of 2.5 hours so that we could teach two classes per day.

HOW TO STRUCTURE YOUR LOCAL PRESCHOOL

CLASS TIMES

• T_TH 9-11:30 a.m.
• T_TH 12-2:30 p.m.
• M_W_F 9-11:30 a.m.
• M_W_F 12-2:30 p.m.

We chose this specific schedule for many reasons. The school district started before 9 a.m. and ended after 2:30 p.m. This allowed parents to not run into transportation conflicts with older siblings in school. Also, let’s say your child is in elementary school, and you wanted to ensure you weren’t teaching when they were home.

Each day, after they go to school, you would teach your morning class. After those children leave, you have lunch, then teach your afternoon class. By the time your child walks home at 2:35 p.m., the preschoolers are already gone and it’s time for family time!

As for younger children, two preschool classes every day could prove to be too much for them. To keep them happy and loving preschool, they could come to preschool with you in the morning, but during the afternoon class, they can either take a nap, play in their room, or watch a movie (and sometimes all three!).

While our situation was considered “full-time” (because it provided us with a full-time income), by no means were we really working full-time hours. We only worked 25 hours per week, and yet we made a full-time income all while teaching, staying home, and playing with our younger children.

What family activities do you have during the day that you need to work around? The best part about this business is that you get to choose what hours you want to teach during the day so you can make it work around your family’s schedule.

If you have a child in elementary or middle school, you can start your class after they leave in the mornings and be done with class before they arrive home.

Or, if you have a little baby, you can set your preschool class to start and end during the baby’s nap time. (If that doesn’t work, you can always consider asking a preschool mom to watch your baby while you teach her child.) If your children are between the ages of three to five, let them come to preschool with you!

Try to determine which class times would be best for your family. While most preschools include T_TH or M_W_F classes, you truly can come up with any alternative that will work with your family’s schedule, i.e. T_TH and M_W or M_TH. If you have an open schedule, we suggest sticking with the traditional T_TH and M_W_F schedule.

Depending on your own situation, you might need a full-time income, or you might just need a supplemental income. Over the next few pages, We’ll show illustrations of different class schedules and sizes, as well as show you how much you might be able to earn. In these examples, we will use our class schedule of 2.5 hours per day.

The tuition amounts we use in these examples are the exact tuition amounts we charged at the time of this publication. Our preschool is in a small town on the outskirts of Boise, ID, with a population under 20,000 people. The majority of preschool owners have told me that their tuition rates are much higher (often $50-100/mo. higher per child) than this.

Please consider that the tuition rates we share will likely be toward the lower end of your tuition rates, unless you also live in a town with about 20,000 people in it. The tuition rates we’re using are also just for illustration purposes.

(1) CLASS PER WEEK

1 CLASS = $1,200/mo.

(10 Children x $120 each)

If you teach 1 AM class on T_TH and have 10 children paying $120 to come each month, then you would make $1,200/mo. just for working 20 hours per month to teach this class.

(2) CLASSES PER WEEK

2 CLASSES = $2,400/mo.

(20 Children x $120 each)

If you teach 2 classes on T_TH (AM & PM) and charge $120 per child, with 10 children in each class, you’ll multiply $120 by 20 children. That equals $2,400/mo. for working just 40 hours per month.

3 CLASSES PER WEEK

3 CLASSES = $4,150/mo.

(20 Children x $120 each) + (10 Children x $175 each)

If you add a M_W_F AM class to your schedule, you could charge $175/mo. because it’s a 3-day class, making an extra $1,750/mo. if you have 10 children enrolled in the class. Then you could make $4,150/mo.!

4 CLASSES PER WEEK

4 CLASSES = $5,900/mo.

(20 Children x $120 each) + (20 Children x $175 each)

By adding a M_W_F PM class, you could make an additional $1,750 each month if you have 10 children enrolled. In total, if you worked at these rates and during these times, you could make $5,900/mo.!

As we mentioned earlier, these illustrations were simply for you to see the business model at a glance. Your tuition rates and the number of children in your classes will likely be different. Now that you understand how to run the numbers to find out your preschool’s income potential, we’ll list a few more examples below without illustrations.

• Smaller Classes, Same Rates (4 classes = $3,540/mo.)
  • T_TH: 6 children x $120 each = $720/mo. per class
  • MWF: 6 children x $175 each = $1,050/mo. per class
• Smaller Classes, Higher Rates (4 classes = $5,100/mo.)
  • T_TH: 6 children x $175 each = $1,050/mo. per class
  • MWF: 6 children x $250 each = $1,500/mo. per class
• Same Size of Classes, Higher Rates (4 classes = $8,500/mo.)
  • T_TH: 10 children x $175 each = $1,750/mo. per class
  • MWF: 10 children x $250 each = $2,500/mo. per class

CLASS SIZES

As you can see, there are two main variables that determine your income potential: your tuition rates and the number of students in each class. Some preschool owners got carried away when they were enrolling students and immediately assumed that they should fill their classes with the largest number of students they could get licensed for. They quickly found out that was a bad idea.

NAEYC recommends a staff/child ratio of no more than 1:10, meaning there will be one teacher per 10 preschoolers ages 3+. I’ve listed the examples of 10 children in a class, but if you’ve never taught before, 10 children may be overwhelming to you.

That’s why we started our preschool our first year with only six students enrolled in each class. After a year, we felt confident enough to increase our class size to 10 children. So just keep that in mind when considering how many students to enroll in each class. We’ll go into more detail regarding class size later.

You could also tell your preschool parents you’ll have ten students in each class, but you could purposefully choose not to fill your preschool classes at the beginning of the year. Instead, perhaps you could start with six or eight students. As you feel more confident in your abilities later in the year, you can enroll more students until you hit the maximum that you set.

Once you tell preschool parents your class size for the year, never go above it during that year. If you want to raise class sizes, you have to wait until the next school year.

Each class will have its own unique dynamic depending on how many children are enrolled, the personalities of each student, and the ages of the children. For instance, for beginning teachers, a class size of six students will usually be more calm and easier to manage than a class size of ten children.

Surprisingly, we have found that a class of ten 3-year-olds are often calmer (but more difficult to manage) than a class of ten 4-year-olds, whereas the 4-year-olds are livelier (and easier to manage) than the 3-year-olds.

REGISTRATION FEES

You’ll likely be able to charge $75-$150 per child per school year for preschool, and $25-$50 per family per summer camp. These are one-time, non-refundable fees that save the spot for their child in your programs and pay for all needed supplies.

LENGTH OF PROGRAMS

We suggest a 9- to 10-month school year and a 2-month summer camp.

AGES OF CHILDREN

You’ll typically teach children ages 3-5, however sometimes you might get “Independent Almost 3-Year-Olds” (make sure they can handle separation easily and they are mature enough to handle preschool) and “older 5-year-olds” (whose parents want to hold them back another year.)

The great thing about having the “Independent Almost 3-Year-Olds” in your program is that other preschools won’t let them attend, so you could get them first and keep them for 3 years!

We do not recommend splitting your classes into exclusively 3-year-olds or 4-year-olds. That’s opening yourself up to a 4-year-old wanting a morning class, but they can’t enroll because it’s only for 3-year-olds, so then you lose a student.

OPENING DAY

When do you want to start your preschool, i.e. when is your opening day? The two driving factors that will almost always influence your answer are your need for income and your licensing requirements.

The best time for you to start your preschool is the time it works best for you. If you need to start quickly because you need money desperately, then you’ll need to start your licensing process immediately.

(Remember, not everyone will need to be licensed.) While you can start your preschool any time you want—and most likely be successful if you market it well—we will discuss below the two best times to open.

The best time to start a new preschool class is in September, with enrollment starting in March. Most of my preschool owners missed that early registration time frame when they were starting their preschools, so don’t worry if you advertise later than March.

In August, parents are naturally in the back-to-school mindset. They might have older children in elementary school, and as they look over their school supply lists, they might realize it would be nice if their preschoolers were in school during that time also.

For those who don’t have older children in school, they might be seeing all the back-to-school sales at Wal-Mart and Target and think about having their preschooler get ready for kindergarten. Regardless of their mindset, late July to mid-August is another great time to advertise and meet your target market when they are actively searching.

The second best time to start a new preschool class is mid-January, with enrollment starting in early January. When the new year rolls around, sometimes parents realize that they should have gotten their child enrolled in preschool four months earlier! Some reasons parents look for preschools in January are:

• Their child wasn’t ready to attend in the fall but is ready now.
• Other preschools were full in the fall, and they’re still full.
• They didn’t know if they could afford to do preschool for 9 or 10 months, but they know they can afford preschool for the next 5 months.
• Their child has been cooped up for months during the winter and needs something to keep them occupied and having fun.
• They moved to the area after the fall.
• Their child just turned 3 and wasn’t eligible for preschool before.

TIME COMMITMENT

It usually takes at least 30 days to get a local preschool started, and sometimes as long as 90 days if you’re getting licensed.

SUPPLIES

Preschoolers go through a lot of art and craft (and cleaning) materials each month that you’ll need to replenish.

LOCATION

Local preschools can be started inside your home, a church, a separate building. If you’re running it outside of your home, you’ll usually pay money to rent, lease, or buy the space.