How to start a daycare in the Philippines: If you wonder how to set up a daycare in the Philippines or even if a daycare center is a good business, then this article is for you. A daycare helps to improve the socialization skills of children ages 3 to 6. This is a way of preparing them for elementary school and, thus, an in-demand service across the Philippines.
In some areas, daycare centers are becoming more critical. This is because, in modern society, many Filipino parents are working full or part-time. Additionally, when children attend a formal school, they are expected to have some level of education. Therefore, daycare centers have become a need in many cases.
Is setting up a daycare in the Philippines a good business? The data shows that this business is growing. This may be due to population growth in a particular area or overall demand for the service. Nevertheless, you may be wondering how to set up a daycare in the Philippines? Today we will go going through a full step-by-step plan on this business. As well, there will be some special bonus tips for new business owners.
Table of Contents
How To Start A Daycare In The Philippines
Step 1: Build Your Daycare Business Plan
Writing a business plan is an important task when deciding to open up a daycare center. This is because there are often opportunities and threats within the industry that can be foreseen with a detailed business plan.
To guide you more in creating a business plan, you can download a free template from filipinowealth.com.
Your business plan will guide you on how to set up a daycare in the Philippines, especially in critical factors such as market research. Altanatlivty, here are some questions that will help build your business plan.
- General overview: What does your daycare center do? / How is it different from other daycare centers? (Your unique selling point & your emotional selling point).
- Target customers: What kind of families, parents, or children do you want to provide services to? / How does your business suit their needs?
- Market analysis: Who are your competitions? / How big is your target market?/ What are the opportunities or threats in the market?
- Management: Will you hire someone to handle day-to-day operations or run it yourself? / How much time and money is going to be needed?
- Marketing goals: How can you reach your target customers? / What marketing will bring in the best returns?
- Finances: What is the capital needed? / Are their other expenses? / What is the break-even account? (This will be discussed more in Step 5)
Step 2: analyze Competition & Extra research
What can your daycare offer? How can you be different from other daycare in the Philippines? These are essential questions that are answered within the business plan; however, competition can spring up much later down the line. Its, therefore, a great idea to spend time looking over your strengths, weakness, opportunities, and threats of the business.
During the research stage, you can look at the other daycare centers in the Philippines to see how they provide the services and what customers they are marketing too. If their daycare operating hours are different from usual, does this work for them? Can you introduce something similar?
You can also be unique with the services you offer. For example, if an educational environment is not offered in your area, you can consider focusing on something similar to your USP.
Deciding on the tuition fee, you can also refer to your competitions. Then, from their tuition fees, you can think of offering more or less depending on your situation.
Step 3: Expenses And Capital For A Daycare Business
Some daycare businesses are set up at home locations. This layout helps to keep the costs to a minimum. However, if you plan to rent or buy a space, expenses can add up fast.
One reason daycare centers struggle in the first six months is due to cost issues. Knowing the costs and prices is critical when building this kind of business in the Philippines.
The capital for setting up a daycare in the Philippines depends on how large the establishment is and the location. Here are some other important considerations:
- Rental, Renovation And Maintenance Costs
- The Number Of Children You Plan To Accommodate
- The Supply Of Food For Them
- Education Supplies And Equipment
- Furniture And Administrative Costs Such As Salaries And Office Supplies
Based on the estimates at the time of writing, an initial start-up cost can be up to 1 million pesos. However, this can be increased if setting up in metro areas or renting a large commercial property.
Keep in mind that your capital must be enough to support the first 3-6 months of business. Many new business owners aim for at least six months. This is also known as a survival budget.
Step 4: Choose Your Daycare Location
Setting up a daycare in the Philippines in a barangay will give you a smaller market, but the costs will be cheaper. On the other hand, setting up a daycare in the Philippines in a city will give you a much larger market, but the costs will be much higher. Therefore the location and accessibility for your customers are paramount.
Regarding the size of the daycare center, you choose to use at least 60% to 80% of your daycare for the classrooms. The rest will be used for the office, lobby, comfort rooms, and many others. More than half of the space is for classes since this is where your business earns income from.
To get a classroom size estimate, you can give at least two sq meters of space for every child. Furthermore, the total area should be at least 500 sq meters. This is because this is the requirement of the Department of Education (DepEd). It may be a good idea to use a building with growth potential.
Step 5: Registration Of Daycare Business Philippines
As any business owner, you must obtain licenses, permits, and certificates for a daycare in the Philippines. A daycare business in the Philippines is monitored and authorized by the Department of Social Welfare and Development (DSWD). It is also managed by local government units (LGUs).
If you plan to have complete ownership of the daycare, you will also need to obtain a business registration from the Department of Trade and Industry (DTI). Then, if you have a business partner, you can visit the local Securities and Exchange Commission (SEC). After this stage has been completed, you will be given an exclusive license to operate and permit from DSWD and the DepEd.
If setting up your daycare center in a barangay, You may need to obtain a barangay clearance. You also need a Bureau of Internal Revenue (BIR) certificate. You can get this at the nearest BIR office where your daycare is located.
Once you are hiring, there is another area to look into, such as; Phil Health, PAG-IBIG, and Social Security System (SSS).
These documents show that you can legally operate and take care of children. Therefore it is essential to obtain the correct information. We always recommend speaking to a local lawyer in terms of business registration.
Step 6: Find Supplies And Equipment
Equipment includes; tables, chairs, mats, cabinets, books, materials, educational toys, etc. The kinds of materials and equipment will depend on your daycare’s programs and the age of the children.
Aside from ensuring that the play area outside is safe, a business owner is required to check to see if the toys are secure and reliable for children to play with.
You can construct fences with locks to give additional protection. Purchasing swings, slides, and other play equipment is also a good idea. Aside from safety, all equipment should be age-appropriate.
For your suppliers, it is necessary to have a good relationship with them. Networking can result in better service and potential promotions. A few well-known suppliers for a daycare business in the Philippines include Furniture Network and Keywest Internationale.
Step 7: Find Your New Teachers And Staff
It is always essential to pick the right staff as this person will help take care of the children. However, managing children is challenging, and a business owner does not want to upset customers. Therefore full screening and background checks will need to be carried out on each staff member.
Your daycare needs codes of conduct to ensure that your teachers have the appropriate mindset in handling children. You can use this when you start doing interviews. Although checking their credentials (as mentioned above) is essential.
Step 8: Deign Your Contract & strategy
Before launching your daycare center in the Philippines, it’s time to get the contract written and signed. The contract explains the things you will and will not provide in your daycare. This helps to set the expectations of the parents.
Here is some information you can include in the contract:
- Pick-Up Time For The Children
- Consequences If There Are Any For Being Tardy
- Items You Will Provide, And The Things Parents Will Provide
- Policies If A Child Is Sick
- Policies For Late Payments
Its always recommended to seek out legal advice for this. Nevertheless, it’s always necessary to complete the contract first before looking for clients. This is part of your larger daycare strategy. Still, spending time on your growth strategy separately is also recommended as this is an important area of any business in the Philippines.
Step 9: Marketing and Promotion
This step is simple but often not given enough importance in setting up a daycare business in the Philippines. The key to effective marketing is keeping the marketing local and focused on your potential customers.
Making a Facebook page to announce the opening of your daycare is a great start. You can share this with everyone in your network and ask them to share it in their accounts for a bit of free marketing. You can also add photos of your daycare on your page so that people can see what your daycare has got.
Facebook is one of the cheapest ways to advertise for this business model because users can easily share this on their page or send it directly to their friends/family members. Therefore you might obtain more awareness of business at a lower cost per 1000 impressions.
If your daycare is in a subdivision, you can post or give out flyers in the local coffee shops or supermarkets. There are many different routes open for this kind of business. It is great to analyze the return on your time and money to see which marketing strategy is best for you.
Although it may seem contradictory since you are just starting, it will help to give some parents, you know, free tuition for their kids. Enrolled children are needed to make your daycare work, and no parent wants their child to be the first in a new daycare.
This is also an excellent way to promote and trail your services. Word of mouth from satisfied parents is the key to succeeding in a daycare business. You can also ask them for support by asking for reviews.
5 Bonus Tips For Opening A daycare In The Philippines
1. Empathize With Parents
Setting up a daycare in the Philippines can make a business owner so busy that the entrepreneur may not consider putting themselves in the parent’s situation. But if an entrepreneur can do this, then opportunities may be highlighted to them.
For Example, you could think like the parents (your new customers) do…. such as can the location be easily found? Are there enough parking spaces? Does the daycare feel welcoming? Is the enrollment process complicated? Again, empathizing with the customers puts you in a much better place.
2. Love The Staff
Positive testimonials from parents and excellent customer service are essential to succeed in your daycare business. Nonetheless, you can lose both if you hire the wrong people.
Business owners need to invest time and money in training and giving continuous education to their staff. You also make your team feel they are respected and appreciated.
This sometimes requires more effort, but you will unquestionably have people who deliver high-quality work. As a result, you can consistently make the parents happy. Parents often feel less worried and stressed if they know they leave their children to be friendly, professional, and sensible individuals.
3. Safe And Clean Environment
Safety and cleanliness are crucial in operating and setting up a daycare in the Philippines. In the first few months, your daycare will be clean. However, as time passes by, your daycare center may need maintenance or a ‘spring clean.’
Setting up regular and scheduled maintenance and cleaning is often a wise move. In addition, many owners have a weekly task of walking around their daycare from time to time, inspecting different elements. This will help to safety check any hazards.
4. Online Access
You could make your business growth more consistent by making your customers’ lives easier ( Convenience = Value = Wealth). One of the many options you can try is having a website or Facebook page which accepts the online booking.
Online profiles can also include the location and contact details for accessibility. In addition, some business owners also upload relevant documents such as handbooks, licensing credentials, and enrollment forms to their websites and social profiles.
To set up a daycare in the Philippines, a business owner will decide activities and events that are generally child-appropriate. Once you start operating, you can adjust the activities to the children’s interests.
The learning experience will be more enjoyable for them if they can explore. This can also make it less stressful for you and the teachers. Your daycare is created for children, so you can ask them what they like or observe them. You can plan more quickly after you gather this information.
Some owners also speak to the parent to see if there is a specific thing they wish them to know. For Example, the English language or new animals. The list is limitless. This puts you into a great place to offer more than just a daycare experience and an education.
Setting Up A Small Childcare Business Philippines
Setting up a daycare in the Philippines is indeed challenging. Aside from being a business owner, you always play the role of a care provider to children. You have to balance both roles effectively when running your daycare. There are many essential elements when looking at setting up a daycare center in the Philippines. Still, if you can provide safety and accessibility and a few other essential factors, you stand a good chance of building a successful business.