How to Pay for Your Preschool Start-Up Costs

If you’re looking for ideas on how to pay for your preschool start-up costs, you’re in the right place!

SPEND MONEY TO MAKE MONEY

Sometimes our preschool owners get frustrated with the start-up costs associated with starting their online or local preschool. It would be amazing if you could just make money and never have to pay for a single expense… ever. But we haven’t found a business like that yet, so until we do, we’re here to remind you of the popular saying, “Sometimes you have to spend money to make money.”

Let us remind you first that we’re not just spending money without a purpose. We don’t view start-up costs as depreciating purchases (like spending money on clothing, food, or cars… those have value, yes, but their value goes down over time.) Rather, when you spend money on your business, you’re investing IN your business! You’re investing in YOU so you can increase your talents and skills, and therefore increase your ability to create income in the future. You’re investing in your future EARNING potential!

When you have a job for an employer, you’re “capped” at a certain earning potential, whether that’s $30,000/yr. or $60,000/yr. or even $100,000/yr. Regardless of what that is for your education and experience level, you’re at the mercy of someone being willing to hire you at the rate you want to be paid. It’s been said that “your budget does not determine my worth…” and yet that’s exactly what happens when you get a job.

On the contrary, when you create your own business, there is no cap to your earning potential. There is no standard that says your level of experience and education warrants x salary. YOU determine your worth… YOU determine your rates… and YOU are the only thing standing in your way of millions of dollars.

YES, we said millions of dollars, because our preschool business generated $1.75 million… even though we didn’t have any experience teaching in a preschool classroom, and even though we hadn’t taken a single college class in business, teaching, or early childhood education. By all accounts, we should never have succeeded. With that level of experience and education, we might have only been able to get a job for $10/hr. at a daycare teaching preschoolers.

So if you’re sick of others telling you how much your time is worth, and you want to be in charge of your financial success… then it’s time to play a different game, my friend. Come and learn all about the game of entrepreneurship… where your weaknesses turn into strengths… where your past becomes your fuel… and the only limit is your imagination!

When you invest in yourself, your business, in mentors, and in tools… you fast track your success. What might have taken you years on your own can now happen in a matter of weeks or months with the right system to follow. And let’s be honest: If you do this on your own, you’ll likely give up long before you ever find success, simply because there is too much to learn and do. So you’re in the right place! And now… let’s learn how to play this new game called “spend money to make money.”

If we told you that we would give you $10.00 for every $1.00 you gave us, and we would do that every day, would you do it? Of course you would! You would do that every day of your life! It’s the same way with starting a business. Your small investment now will reap giant rewards soon. We put about $2,000 on our credit card to start our preschool when we first started.

Within 30 days, we had not only paid off our credit card, but we also had enough money in our bank account to pay our mortgage and our living expenses that month. By the second month, we were actually putting money into savings!

By our second year of preschool, we were making about $50,000 (granted, this was ten years ago, so our tuition rates have since gone way up!) But if you were us, and we said to you: If you spend $2,000, we’ll help you build a business that will make you $50,000 the next year. Would you do it? Of course you would! You would do that every year! What could that kind of money do for your family? What stresses would it relieve? What opportunities would it open up?

Here’s one last example. If you were us, and we said to you: If you spend $2,000, we’ll help you build a business that will make you $1.75 million over the next ten years, would you do it? Of course you would! (And you’d probably keep us pretty close, too, to ensure that your business kept doing great year after year.)

We use these examples because for some of our preschool owners, it was difficult for them to spend money initially. When they started, they were just like you. They didn’t have a preschool business yet, so they couldn’t justify spending money logically. What it came down to was them believing we could get them the result we were promising them.

We’ve shown that I (a single mom with three kids with no preschool degree and no real teaching experience) could grow our preschool from just 24 students the first year to making $1.75 million in ten years… And we’ve also shown how we’ve helped thousands of women create successful preschools, too! Now it’s your turn!

PAY FOR YOUR START-UP COSTS

Most businesses take years to be profitable and require a huge investment to start, but a preschool business is easy to start, quick to become profitable, and requires only a small investment for start-up costs.

Before we discuss what supplies and start-up costs you may incur, we want to explain how we believe you should pay for your start-up costs. We don’t believe in getting business loans (you don’t need that much money) or grants (you don’t need to waste your time writing one) to start businesses. Rather, we’d like you to get resourceful to pay for your start-up costs.

One way to be resourceful is to try these 37 Fast Ways to Get Money to Start Your Preschool.

Or you can pay for your preschool start-up costs by:

• Charging registration fees when you register students
  • One-time, non-refundable (also known as supply or enrollment fee)
  • Don’t charge an additional “supply fee” – just charge monthly tuition + 1-time registration fee per student per program, i.e.:
    • $25-$50 per family per summer camp 2-month program
    • $75-$150 per student per preschool 10-month program
• Having your preschool families pay their first month’s tuition up front with their registration fee
• Creating a raffle fundraiser using our $10K Raffle Mania strategy
  • Preschool owners have made as much as $6,000 in 1 month!
• Selling a preschool-related service/product to your fellow preschool owners that solves one of their problems
• Getting creative in how you save money or make extra money
• Using your credit card or savings and then paying yourself back

If you work it the right way, you’ll be able to use all (or some) of the strategies above to pay for your start-up costs before you even start teaching. That way, when you start teaching your first month, all of the tuition will go to you instead of paying off some business loan! With all these strategies, you’re sure to be successful!

LIST POTENTIAL START-UP COST AND SUPPLIES

Did you know that almost every product or service you purchase for your preschool is a tax write-off? That means that you can deduct those expenses from your preschool income so it reduces the amount of income you need to pay tax on.

For instance, in the example below, even though you made $50,000 (gross income or revenue) you would only need to pay taxes on $45,000 (net income or profit). Your net income (i.e. taxable income) is your gross income minus business expenses.

• GROSS INCOME: $50,000: tuition and fees received
• BUSINESS EXPENSES: – $5,000: start-up costs, expenses, and supplies
• NET INCOME $45,000: taxable income

Here are several preschool start-up costs you will likely incur:

One-Time Costs

• $20-$40: Business name registration
• $100-$300: LLC registration/formation (if choosing LLC)
• $300: City zoning special use permit (if required for licensing)
• $20: Occupancy permit (if applicable)
• $50: Building permits (if renovating property)
• $1,000+: Renovation costs (if renovating property)
• $10,000+: Parking lot/landscaping/ADA accessible (per zoning rules if doesn’t have it already)
• $55: State background check (if licensed)

Recurring Costs

• $20/6 mos.: Business address (if choosing USPS)
• $12/yr.: Website domain (GoDaddy)
• $6/mo.: Business email (Google Workspace)
• $40/mo.: Liability insurance
• $300/2 yrs.: State daycare license app. (if licensed)
• $35/2 yrs.: State health inspection (if licensed)
• $25/2 yrs.: City fire inspection (if licensed)
• $50/2 yrs.: State CPR/1st Aid Certification (if licensed)
• $20/yr.: City business license (if licensed)
• $1,000/mo.: Lease (if applicable; usually requires multiple year contract)
• $500/mo.: Triple Net (if doing a lease; NNN: real estate taxes, building insurance, maintenance)
• $30/mo.: Water, sewer, garbage
• $50/mo.: Electricity
• $100/mo.: Natural gas (heating/cooling)
• $200/mo.: Repairs

To see all the other start-up costs you might incur, check out this article about Materials & Supplies Needed for a Preschool Classroom.