Building Your Daycare: Design and Construction Secrets You Wish You Knew 9798987128121, 9798987128114, 9798987128107, 9798987128138

Table of contents :
Contents
Introduction
You are Not Alone
Building a commercial building isn’t rocket science.
Hiring it out is not the “easy button.”
This book is for you if . . .
Here’s a peek at the Table of Contents . . .
Part One - A Strong Foundation
The Elephant in the Room.
Get a ballpark figure.
Historical cost data example.
Site selection.
Flying by the Seat of Your Pants.
You don’t know what you don’t know.
You can’t find this on Google.
A cautionary tale.
How Much Time Will This Take?
Ten steps of daycare development.
Don’t go it alone.
Selecting the Right Location.
Choosing your community.
Market research.
Evaluating the competition.
Supporting Your Business Plan.
Reverse engineer your budget.
You found a great site; now what?
The Concept Site Plan.
Part II - Building the Dream
Your Vision Comes to Life.
Candid communication is key.
Design thresholds to know.
Selecting the style of building.
How the zoning process works.
The purpose behind zoning.
Four zoning review types.
How to apply for a zoning variance.
Permit Approvals
Design Documents.
Construction Documents.
Applying for permits.
Bidding your project.
The Construction Process
What to expect from your contractor.
Contractor payments.
Change orders.
Project closeout phase.
Part III - Moving In!
Moving into Your Facility
Receiving your equipment and furniture.
Temporary Certificate of Occupancy (TCO)
Train teachers while outfitting the building.
Becoming Licensed
Different inspectors, different issues.
Steps for opening to the public.
Profit From the Start
Jumpstart your website design.
The Coming Soon sign.
Market at elementary schools.
Marketing after you’re open.
Conclusion
Resources

Citation preview

To all my daycare clients.

Everything contained in this book I learned from you and discovered because of your willingness to include me in your building construction journey.

Let us all learn together for the collective good of the childcare industry.

First published by Save on Building 2022 Copyright ©2022 by Rebecca Calbert All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to the publisher, addressed “Attention: Permissions Coordinator,” at the email address below. Rebecca Calbert [email protected] www.SaveOnBuilding.com

FIRST EDITION Hard Cover

ISBN 979-8-9871281-2-1

Paperback

ISBN 979-8-9871281-1-4

Kindle

ISBN 979-8-9871281-0-7

PDF

ISBN 979-8-9871281-3-8

DISCLAIMER: This book contains advice and information relating to building design, construction, and real estate development. It should be used to supplement rather than replace the advice of your architect, engineers, and contractor. The publisher and the author provide this book and its contents on an “as is” basis and attest to the accuracy of the information within this book at the time of publication. To the maximum extent permitted by law, the publisher and the author disclaim any and all liability in the event any information, commentary, analysis, opinions, advice, and recommendations contained in this book prove to be inaccurate, incomplete, unreliable, or result in any investment or other losses. This book is for informational purposes only and is not intended to provide legal advice. You should never make any investment decision without first consulting with your own financial advisor and conducting your own research and due diligence. Rebecca Calbert has no responsibility for the persistence or accuracy of URLs for external or thirdparty internet websites referred to in this publication and does not guarantee that any content on such websites is, or will remain, accurate.

Contents Contents Introduction You are Not Alone Building a commercial building isn’t rocket science. Hiring it out is not the “easy button.” This book is for you if . . . Here’s a peek at the Table of Contents . . .

Part One - A Strong Foundation The Elephant in the Room. Get a ballpark figure. Historical cost data example. Site selection. Flying by the Seat of Your Pants. You don’t know what you don’t know. You can’t find this on Google. A cautionary tale. How Much Time Will This Take? Ten steps of daycare development. Don’t go it alone. Selecting the Right Location. Choosing your community. Market research. Evaluating the competition. Supporting Your Business Plan. Reverse engineer your budget. You found a great site; now what? The Concept Site Plan.

Part II - Building the Dream Your Vision Comes to Life. Candid communication is key. Design thresholds to know. Selecting the style of building. How the zoning process works. The purpose behind zoning. Four zoning review types. How to apply for a zoning variance. Permit Approvals Design Documents. Construction Documents. Applying for permits.

Bidding your project. The Construction Process What to expect from your contractor. Contractor payments. Change orders. Project closeout phase.

Part III - Moving In! Moving into Your Facility Receiving your equipment and furniture. Temporary Certificate of Occupancy (TCO) Train teachers while outfitting the building. Becoming Licensed Different inspectors, different issues. Steps for opening to the public. Profit From the Start Jumpstart your website design. The Coming Soon sign. Market at elementary schools. Marketing after you’re open. Conclusion Resources

If you’re looking for more resources and details than what I can include in this 100-page book, I highly recommend you take me up on watching my gift to you.

I created a video-based training module just for readers of “Building Your Daycare.”

The Daycare Owner’s Blueprint: A Step-by-Step Guide to Designing Your Building’s Floor Plan

My Free Gift to Childcare Owners

You can also find more helpful links at the end of this book in our specially curated “Resources” section.

You are Not Alone

I’m Rebecca Calbert, architect and founder of Calbert Design Group, an Architectural firm that specializes in building daycare centers. For over the past decade, I’ve been helping daycare business owners throughout the United States transition from daycare facility renters to daycare facility owners. One-by-one, I’ve been guiding my clients through the land acquisition, building design, and construction process, and now it’s your turn to learn the ropes. Imagine no longer having to worry about your landlord raising your rent, offering you a new lease, or telling you that the building you run your business out of is up for sale and you must vacate at the end of your lease. Building or buying your own building may be the most costly investment you will ever make, but it’s an investment that will pay off for a lifetime. Full disclosure: Large amounts of money and many moving parts are involved. But that’s not a good enough reason not to do it! Because if you know what you’re doing, and you will by the end of this book, the benefits are enormous! Here’s a sampling of why our clients have decided to build their buildings. Independence: As the owner, you are the ultimate decision-maker. Freedom: You make choices based on your own philosophies and priorities.

Wealth: You don’t have to be born into wealth to get started, but it sure will generate it. Creativity: You get to implement the ideas you like best and guide the building design to be the way you’ve always envisioned the perfect daycare center. Financial Stability: You save money on taxes, build wealth through increased equity, and build a strong credit history. Personal Satisfaction: You get to enjoy serving the community you choose in a way that offers more satisfaction than any job. Confidence: You don’t have to go it alone; you can join a group of like-minded entrepreneurs just like yourself going through the same process of building commercial buildings. You can find us on Facebook, “Save on Building: Insider Secrets.” Legacy: When you own your building, paying rent becomes a thing of the past. Imagine how financially stable you will be when your monthly mortgage payment stays the same year after year! A Bright Future: Once you learn and go through the commercial building process, you will have the confidence to build as many buildings as your finances allow. You will become more than a daycare owner. You will become a property developer!

Building a commercial building isn’t rocket science. If you’re reading this book, you probably recognize that there are a lot of steps in the building design and construction process and that you don’t know what you don’t know. Maybe you understand financing well but aren’t sure about building design. Or perhaps you know the construction process well but aren’t sure how to select the right piece of land. Lack of knowledge and understanding are serious problems because what you don’t know could render your project dead in the water before you even

get your building out of the ground. If you’ve attempted internet research hoping to find out what it will cost to build your dream building and what is involved in making it happen, you already know there’s not much information out there, and that’s by design. Real estate developers don’t write about this in their blogs because if you learned how to do it yourself, it would put them out of business. Every community has its own set of rules and regulations that you must meet to make your vision a reality. And you may have also noticed that there is no guidance on the internet on how to verify that your business can support the cost of the building before you begin construction. That’s why I created this step-by-step guide to walk you through the process and share the knowledge and secrets I’ve learned in my tenure as a licensed architect specializing in early childhood education buildings. I’m going to break it down into bite-sized pieces and lay it all out for you in chronological order, so that this book can be your go-to resource for your building project. First, repeat after me, “I am not alone.” That’s right: you do not have to navigate your building project alone. Welcome to “Building Your Daycare: Design and Construction Secrets You Wish You Knew.” I have secrets for each step of the process that will guide you. But be prepared to challenge all your assumptions about what you think you know about building design and construction. This information will dispel myths embedded in our culture and introduce you to concepts that will blow your mind. Here’s the great news. The secrets I’ll share will reveal what keeps you from leaping into building ownership. And once you discover and remove the mental roadblocks standing in the way of building your own daycare center, your life will change. You see, I’ve found there is a common cause for why most owners shy away

from building their own buildings. It is based on my years of experience working with daycare clients and includes my own journey into building ownership as well. Have you ever mentioned to a friend or business associate that you were thinking of building a daycare, only to be told, “It’s too complicated; just find some place to rent”? Please don’t listen to them! Ask yourself, has this person built a daycare? Why would you listen to someone who hasn’t done it? Thanks to the financial incentive of cost appreciation, you’ll discover that it pays to learn the real estate development process and own the building you operate your business out of. Have you ever noticed how many daycare owners own multiple locations? It’s because when you’ve done it once, there’s no more fear and mystery. And building ownership is so lucrative that repeating the process to add more locations becomes a “no-brainer.” Once you know how it all works and see first-hand how much cash flow and security your investment offers you in return, you’ll find that building ownership is addictive.

Hiring it out is not the “easy button.” Once you get a glimpse of the complexity of building a commercial building or remodeling an existing building, it’s tempting to look for someone to take over and handle it all for you. But here’s the rub. As the owner, you still have to make all the critical decisions. You still must attend all the Owner/Architect/Contractor (OAC) meetings. You still have to sign all the paperwork and write all the checks. It’s not as simple as giving a development management company a big fat check, and two years later, you just show up on move-in to your dream

facility. But don’t worry; this process can quickly be learned and implemented by anyone willing to follow the system step-by-step. This book is for you if . . . • •

•

You’re an individual owner or a small group of owners who want to build or remodel commercial real estate for the first time. You don’t have the extra budget money ($75,000 - $100,000) to pay for a development management company to handle the project for you. You recognize it’s a complex adventure that can have severe financial consequences if you go it alone without understanding the steps needed and the order to take them in.

While working with our clients, we’ve been through this process hundreds of times. We help business owners escape the tenant rent trap. In this book, I’ll teach you how to act like a professional owner. I’ll give you key insights, teach you what to look for, what to pay attention to, and what important questions to ask at every critical stage - from selecting the site to filling enrollment. You may be in a rush to start your construction project ASAP, but I’ve found that my clients are far more likely to succeed in staying within budget when they understand the business plan behind their decisions. So, before we get to the “solution,” I’ll spend the first few chapters explaining the often-shocking costs and frequently overlooked beginning steps that will be the foundation of your success. When you get to Part 2, you’ll learn the chronological steps to designing, permitting, and constructing your building. Knowing the chronological steps is essential so you don’t waste time having to backtrack to steps you didn’t know about until you’re well into the process. Once you’ve made it through the construction phase, you’ll move on to Part 3, which becomes your marketing blueprint for opening your daycare with a waiting list that’ll make your competitors green with envy.

Once you start experiencing the confidence that comes with this new-found knowledge, you’ll understand the remarkable life-changing effects of building and owning your own daycare center facility. As an added reward, you will simultaneously eliminate the high rent increases and gain a lifetime of financial security and multi-generational wealth. Here’s a peek at the Table of Contents . . .

PA R T 1 – A S t r o n g F o u n d a t i o n The Elephant in the Room. There is no “average” or “normal” budget. The budget can feel like a moving target because every element has its own variable costs. The good news is as you nail down the cost of the land and the cost of construction, budget accuracy becomes more stable. Flying by the Seat of Your Pants. What you need to know can’t be found on Google. Every project is unique and must conform to your community’s standards. You don’t know about many of these until you dig into your community’s zoning and architectural design approval requirements. How Much Time Will This Take? You’re already running your business 50 hours a week; how will you manage this project? Don’t worry. I’ll break it into easy-to-consume bitesize tasks that are achievable in just four to eight hours a week. Selecting the Right Location. The most critical element in building your daycare center is selecting the right location. The first and most expensive mistake happens when the wrong location is purchased. Supporting Your Business Plan. Your total student enrollment has everything to do with whether or not your business location will be successful. With the right plan, you can easily create a business proposal that will support the lender’s decision to give you a loan.

PA R T 2 – B u i l d i n g t h e D r e a m Your Vision Comes to Life. How to get your vision out of your head and down on paper. Maximize your time by consulting with a designer who will turn your idea into a set of drawings used to create the blueprint that is the foundation for getting your building built. How the Zoning Process Works. Learning the ins and outs of navigating your community’s zoning requirements and the required order of each step will prevent the zoning process from becoming a time-consuming money pit. Permit Approvals. With the zoning approval process behind you, it’s time to solidify your design details. Your architect and engineers will complete your construction documents, and you’re ready to apply for your building permits. The Construction Process. Know what to expect from your contractor during construction. Be prepared to be flexible for the inevitable changes that only reveal themselves during construction.

PA R T 3 – M o v i n g i n ! Moving Into Your Facility. Have a plan of action for ordering equipment, outfitting the building, and staff training to make your move-in as smooth and exciting as possible. Becoming Licensed. Every state has its own specific childcare licensing regulations for daycare centers. You need to know yours to avoid hiccups in your certification process. Profit From the Start.

Learn powerful secrets that will boost your pre-enrollment before you even open. The revenue difference between opening with a 20% or 50% enrollment is enormous! Marketing is the key!

What Qualifies Me to Guide You Through the Process? I’m transparent in that I’ve never run a daycare center, but I’ve done something even better! I’ve worked with hundreds of daycare owners across the country, and I’ve witnessed firsthand what works and what doesn’t what’s more important to what’s less important - where the value is to spend money and where the value is to be as economical as possible. I’m excited to share with you all I’ve learned so you can successfully navigate and manage the risks of building your own dream-come-true daycare center. I want you to come out to the other end of this experience thrilled with the result and excited to be a successful new daycare building owner.

Rebecca Calbert Atlanta, Georgia [email protected]

P.S. – I enjoy receiving readers’ helpful feedback, and reviews help other daycare owners know how useful this book is. Would you please take a moment to leave a positive book review on Amazon or your point of purchase.

And if you feel I’ve overlooked something vital, don’t be shy; email me suggestions. I’d love to hear from you!

The Elephant in the Room.

I know you want to get straight into the details of how to put your project together in the most effective way, but before we do that, we need to address the elephant in the room - the budget. When it comes to planning the construction of a new commercial building or remodeling an existing building, the problem with budgets is that there’s no such thing as a “set-in-stone” budget. It can feel like the budget number is a moving target because it is! There’s no easy answer to the question of the bottom-line cost at the start of planning your dream daycare center. But don’t worry! With each step closer to completion, the budget will be more and more accurate. Here’s why it’s not possible to have a guaranteed project cost before you start. Just like there’s no guarantee on the cost of toilet paper tomorrow, the same is true of construction costs. Here are a few examples of volatile cost variables in the construction industry: Labor costs Cost of materials The ups and downs of the economy Trade agreements between countries Trade tariffs Shipping fees Even if you put up the same building at the same time of year, thirty miles away, there would still be a cost difference between them, depending on the value of the location.

And even the contractor that bid’s your project can’t guarantee to hold their bid price for very long. A contractor can only hold a price for about thirty days and sometimes only for as short as seven days. There are just too many moving parts: the price and availability of materials, the cost of labor, government regulations, and so on. But here’s the secret. While no one can know with any level of accuracy what the construction budget will be at the very start of your project, you can create a general startup budget with some research. Then as project drawings become more detailed, materials are sourced, and permits are approved, the budget becomes more and more accurate. You’re not left with vagueness forever. One purpose of this book is to show you where the budget “landmines” exist so you can avoid blowing money on costly mistakes caused by not knowing what you don’t know. And how could you know if this is your first time through the building development process?

Get a ballpark figure. Keeping in mind that no two projects are exactly alike. For now, the best we can do is come up with a ballpark figure based on historical data. If the ballpark figure fits your budget, it’s safe to say your financial situation will likely support your project. At the time of the printing of this book, we are still in COVID chaos. Global supply chain issues and shortages of employees are occurring in all business sectors, and construction costs are trending upward. While it’s still unclear what the construction environment will look like postCOVID, let’s look at data from the pre-COVID time. To arrive at a good ballpark figure, let’s look at the averages for land cost, building cost, and the “soft” costs for architects, engineers, bank financing fees, etc. The table on the next page, “Example Daycare Design and Construction Costs,” illustrates the average commercial daycare project size we completed for our clients in 2020. The average building size was 12,000 square feet and

supported a child enrollment of 184 children. To estimate a total project’s cost, you will add up the following: 1. 2. 3. 4.

Land Costs Hard Costs Soft Costs Financing Costs

Land Costs include: Land Purchase Price Closing Fees Realtor Fees

Hard Costs include: Site Construction Work: Clearing and Grading Retaining Walls Parking Lot Sidewalks Landscaping Drainage Playground Equipment Fencing Trash Enclosure Building Construction Work: Building Structure Interior Finishes Classroom Furniture Soft Costs include: Site Engineering: Surveyors Civil Engineers Soil Testing Traffic Engineers Architects & Engineers: Architects Structural Engineers Mechanical Engineers Electrical Engineers Plumbing Engineers.

NOTE: Total Building Costs are the hard and soft costs added together. When you approach your lender, they will ask what your building costs are. They will expect you to supply both of these

budgeted amounts. As you begin estimating your costs, use the table shown on the facing page, “Example Professional Fee Costs,” to get a general idea of how much you should budget for each of the professional services you will need during your design and construction journey. This table breaks it down into a percentage of the Hard Costs so that you can interpolate the fees according to your own project size and requirements. For example, if your land costs are $500K, you can expect the Real Estate Broker fee to be 6% of $500K, which equals $30K. Financing Costs include: Lender Fees NOTE: Lender fees are a percentage of the loan amount and are included in the total loan amount you are financing. For example, you take out a loan for $100,000, and your lender fees are 12%. Your total financed loan amount will equal the original $100,000 plus the added lender fees of $12,000 for a total of $112,000. Owner Cash includes: Loan down payment Incidental expenses Keep in mind that the amounts in the chart are average figures with a big spread between the lowest and highest-cost projects. The average includes projects ranging from $2,000,000 to $8,000,000, with many price points in between.

You can build a perfectly suitable daycare in the $2,000,000 range by going minimalist and inexpensive, or you can pull out the stops and make it your dream facility for $8,000,000. It’s about making smart choices and sizing your facility to fit your budget. Either way is good as long as it is supported by a solid business plan. Analyzing the project data from above using the 2020 figures, if you combine your estimated land cost plus hard costs and multiply by two, you will get a ballpark figure for the entire budget. One of my favorite ways to back into a project budget is to look at the amount of cash available and mathematically determine what size facility you can afford to build. For example, say you have $200,000 in cash available for a 20% loan deposit. That means that you can afford a $1,000,000 loan amount. Breaking down the cost percentages of the average project, you will notice that the building construction hard costs are about 44% of the total loan amount. So your total loan amount of $1,000,000 times 44% allows for a $440,000 building cost budget. Now that you know your building cost budget, you can see from the chart that the building breaks down to an average cost of $166 per square foot. So your building budget of $440,000 divided by $166 per square foot equals 2,650 square feet; this is the building size your budget will allow you to develop. Looking at the number of kids per gross square foot averaged in our historical data, you can extrapolate that the average building size requires 65 gross square feet per child. So dividing your building size of 2,650 square feet by 65 square feet per child equals 40 children. The conclusion you can make from all of these calculations is that in 2020 with $200,000, you can afford to build a 2,650-square-foot building that will support the enrollment of about 40 children.

Historical cost data example. The single most accurate way to determine your overall budget is to find out the costs for similar buildings. The charts I just reviewed are an average of projects completed in 2020 and can be very useful in providing you with general ballpark figures to give you an idea of what you might expect. You will need to add in each year’s cost of inflation since 2020, but this gives you a great starting point of reference. While we can learn plenty by looking into the past, it is also helpful to be aware that new and possibly better alternative building materials and construction methods are coming to market. There’s the promise that some of these new technologies will stabilize construction costs or lower them. Time will tell.

Site selection. The first success factor is the construction site you choose. Multiple considerations go into the design and building of a daycare center. This complex bundle of variables greatly influences the ideal location, the arrangement and configuration of the site elements, and the building design. All of these items need to come together to accommodate the land’s uniqueness while fulfilling the stringent regulations associated with daycare facilities. When you’re building a house, it’s just to have a place to live. But when you’re building a commercial daycare center, it is not just a place to run your business; it’s also a marketing asset. It’s where you advertise your business with your visibility, signage, and overall curb appeal. In residential development, lot size and configuration are standardized with only a few exceptions. For the most part, lots are rectangular. You may find some odd shapes here and there, but there are fewer variables. With a house, you have only a driveway to contend with, while a commercial building requires a driveway and a parking lot and needs to accommodate

access for service and emergency vehicles such as a firetruck, ambulance, delivery trucks, and trash service. Commercial buildings specific to daycare centers must also consider connectivity to the streets that parents are likely to travel for convenient child drop-off and pick-up on their way to work and back. There are many things to consider when shopping for land. How easily does the land layout? How conducive is it to being developed? Some parcels have huge minimum setbacks from the street, reducing the amount of buildable land; others don’t. It’s possible to buy a two-acre piece of land and have only half an acre that can be built on due to many conditions – setbacks, buffers, easements, wetlands, bedrock, or the presence of endangered species, to name a few. When you research on Google to learn how much land a typical daycare center needs, you’ll likely get a figure of 1 to 1½ acres of land. The danger is that if you take that information at face value and don’t consider everything that’s going on with that piece of land, you could make a huge mistake. For instance, I had a client who found a two-acre piece of land and what seemed like a great location, but the problem with this piece of land was that it was triangular in shape instead of a typical rectangle. By the time all of the setbacks were determined, the total buildable area was relatively small because rectangular parking lots and rectangular buildings do not fit neatly within the triangular-shaped property. Fortunately, they had not gone beyond a Letter of Intent (LOI) on the land. They invested only some deposit money before they found out whether it would work for what they wanted to accomplish. Luckily they weren’t stuck with a piece of land that wasn’t large enough to support their business goals. You can speculate about your building costs, the cost per child, and the cost per square foot, but you are really shooting in the dark until you have your site selected. That’s why you don’t purchase land without first doing your due diligence and having a concept design created. Always including a sufficient option period to thoroughly analyze the site feasibility is a fail-safe tactic to avoid a budget-busting disaster.

At the end of the day, your costs are going to be unique based on the property you choose. But don’t worry too much about finding the perfect piece of land just yet. We’re going to cover that in detail in a later chapter. For now, let’s discover why you don’t want to take on this complex process by “flying by the seat of your pants!”

Flying by the Seat of Your Pants.

I’m guessing that if you’re reading this book, it’s because you have researched what it takes to build your daycare center and discovered there’s a lot more to it than you could have imagined! Even if you’ve found a few first steps and gotten the needed zoning applications, you’ve likely discovered that it’s not exactly clear how to answer the questions. The problem is that if you give an answer that isn’t quite right, you can really complicate things for yourself later down the road. Maybe you’ve already had the experience of calling the local zoning and building departments asking for help, and they’ve told you that you need to hire a professional. If so, you’ve come to the right place. And if not, you’ve still come to the right place.

You don’t know what you don’t know. The most dangerous situation to be in when navigating the complex process of building a commercial building is not knowing what you don’t know. There are so many puzzle pieces of vital information involved in the process that it is impossible to thoroughly inventory what you don’t know as you go into this. One of the biggest budget-busting landmines is implementing steps in the wrong order. Those missteps can set you back months in the process. The missteps may be huge or slight, but they always become expensive obstacles that become big problems downstream. For example, if you make a childcare compliance mistake after construction

has started. The delay will not only have your contractor divert staff to other projects while waiting for you to sort things out, but you’ll also increase the carrying costs on the land and construction loans. To put it in perspective, here are a few examples of how much a single day of delay will cost you in loan carrying fees: A $1,000,000 loan equals an $ 8,400-a-month mortgage payment - a cost of $280 for each day of delay. A $3,000,000 loan equals a $ 25,000-a-month mortgage payment - a cost of $833 for each day of delay. A $5,000,000 loan equals a $ 42,000-a-month mortgage payment - a cost of $1,400 for each day of delay. Additionally, any delay that causes you to miss open enrollment in July for an August start or in December for a January start means your classrooms will not be as full when you first open. Considering that the average cost of childcare in the United States is about $1,400 a month. An enrollment of 200 kids times $1,400 equals a gross revenue of $280,000 yearly ($23,333 a month). It’s common for daycare centers to open their doors with enrollments only at a 20% capacity, so you need to account for extra carrying costs while you grow your enrollment up to 80% – 90% and even close to 100% enrollment. If you miss your opening date and you’re only 20% full for the first three months as opposed to 50%, this means that for the first three months, you’re sitting on this brand-new building bringing in $252,000 fewer dollars because you missed out on some effective marketing moves. No worries about marketing, though; I spell out some effective preenrollment marketing moves in the final chapter of this book.

You can’t find this on Google. You need to know more to successfully build your daycare center than just selecting the right site and figuring out what construction will cost.

You will also need to learn your municipality’s building regulations. Your building department is looking for conformance to their code. It doesn’t take long to discover that you can’t just build anything you want. Your daycare center must comply with your community’s building codes and business ordinances. You could search Google all day long and not find what you need to know because things like permitting or zoning approval information are not readily available on the city or county government agencies websites. Or if it is, it’s written in a technical language not easily understood by the layperson. If you don’t know what puzzle pieces you need to find, Google searches become a massive waste of time. You’ll be spinning your wheels trying to put together fragments of puzzle pieces only to discover later that you’re missing some critical to the process. For example, consider general zoning requirements. Suppose you don’t understand the ground rules and hire the wrong architect or engineer to design your building. And they follow along with your personal vision of the perfect daycare center instead of researching what you’ll be allowed to build by code. In that case, you’ll end up spending money on a pipe dream that you’ll never see built. The zoning laws can limit features you want in your daycare center and, conversely, require minimums on design elements you don’t care about, like the number of parking spaces required. It’s great to be creative, but compromises to comply with the building code will be necessary. The point is, if you don’t know what you don’t know, you risk wasting undue amounts of time and money. When you don’t know every detail of the process and requirements, you can’t be sure whether you’re on target or missing a crucial step. You’ll find out when you run into a regulation roadblock that requires you to take a few steps back to handle the missing piece before moving forward.

A cautionary tale.

I had a client who had already bought a piece of land for $600,000. She then hired us, the architects, and other various professionals - engineers, consultants, a zoning attorney, and the building contractor to the tune of another $150,000 or so for professional services. Against our advice, she skipped the zoning architectural review step because her contractor said he had checked and didn’t think she would need it. Later, when the time came to apply for a building permit, the building department rejected the project submittal because daycare use was not allowed on the property! It seems her zoning attorney hadn’t read the land documents thoroughly enough because it was listed as an excluded use as part of the area’s masterplanned development. She was now stuck owning a piece of land on which she would not be allowed to build a daycare. NOTE: Land use exclusions are a common occurrence.

As a requirement of the purchase of their parcel of land, one business may require that no other competing companies be located within the same development. That’s why you don’t see more than one grocery store in a single shopping center. Don’t believe me, go ahead and look around the next time you’re out running errands. No compete clauses are everywhere if you know what you’re looking for. After getting over the outrage of it all, it was back to the drawing board. Starting from scratch, she eventually built a fitness center on the land. The switch from building a daycare to a fitness center set her back more than an entire year while she went through all of the development steps all over again, but this time making sure to include the architectural zoning review step in the right order. And all the while, she still had to make her monthly mortgage payments on the land loan! In hindsight, had she followed the appropriate steps, she could have discovered this information much sooner. Following the steps in the proper

order would have saved her over a year of wasted time, tens of thousands of dollars, and the anguish of having to start at square one with a building type she didn’t plan to use as a daycare center. She could have prevented this heartache by: • • •

Thorough due diligence by herself and a zoning attorney. Applying for zoning review at the beginning. Applying for architectural review immediately after the initial concept design.

The fear of making a significant mistake is legitimate. As the owner, you’re making decisions in unknown territory where it’s easy to make costly mistakes by making irreversible decisions that could delay your project for months at the cost of some serious money. The process of building a commercial building is one of systematically moving through regulatory approval gates. When you’ve met a particular benchmark, you’re allowed through that gate, and only then can you move on to the next phase. If you jump ahead out of inexperience, you risk being sent back to the last gate to start over. In the meantime, you will have wasted a lot of your resources. For the consultants involved, their time is a precious commodity. If you’ve got to go back and redo parts of the design, maybe they can use characteristics of the earlier design, but often it’s back to square one. If the change requires input from more than one consultant, your bill will be multiplied by the number of people needed to correct a deficiency. For instance, if the architectural review board requires a brick facade, but your original design used siding, and you’ve already skipped ahead to completing your construction document set. The architect would have to change the site plan, the floor plan, building sections, wall sections, window details, and door details. Then the architect would hand the changes off to the civil engineer to update the site drawing and the electrical engineer to complete a new energy analysis. Then the electrical engineer would communicate to the mechanical engineer about any

heating and air conditioning loads that would have changed. Then the mechanical engineer would re-evaluate and re-design the HVAC system and ductwork layout. The ductwork change would have to be altered on the ceiling plan, so this would get sent back to the architect so that they could update the reflected ceiling plan as well. Do you see how a single change, brick to siding, has a domino effect? Instead of jumping ahead, the correct choice is to get the proper approvals before moving forward. It may seem like a long and cumbersome process, but it will save time, money, and stress in the long run. My goal is to see to it that you have your eyes wide open to the pitfalls and landmines scattered throughout the whole commercial building process. And to be a guide walking you through the process as efficiently and economically as possible. I want to clear you of unnecessary sidetracks that cost a lot of time and money. I’ll point out the things you need to watch out for and provide assurance on items where there’s nothing to worry about. Keep reading because the worst thing would be to go into the process uneducated. That would certainly cost you in ways you can’t imagine early on in the process. In the next chapter, you’ll see how to find the time to manage the ins and outs of building your dream daycare

How Much Time Will This Take?

If you’re like most daycare business owners, your most expensive business budget item is your facility rent. It’s a fact that when you run your business from a building you own, your monthly mortgage payment stays the same while your enrollment fees increase over the years. This means that as long as you’re a facility tenant rather than a facility owner, you’ll never get ahead on your profit margin because the rent will go up every year. Owning your own building makes excellent business sense, but buying an existing building that meets the specialized daycare center requirements is challenging. And the idea of building your dream facility can be overwhelming. You can do research and make notes and enjoy imagining the vision. You can spend hours daydreaming on Pinterest boards about what your ideal building will look like - what the classrooms will look like, the paint color, the bulletin boards, and so on. But unless you have a systemized process that you can follow in a managed way, you’ll spend enormous amounts of time dreaming and navigating through internet rabbit holes that don’t get you any closer to your end goal. It makes sense. To grow the profit margin of your business, you will need to build a building from scratch or buy a building and remodel it. But the idea of managing a project as big and complex as constructing a new school can be overwhelming - especially if you’re already working 50 hours a week running an existing daycare business. How will you find the time to manage such a project? Imagine having a step-by-step plan describing what to do and how to do it.

With a program that breaks it down into small steps, you can manage it in just four to eight hours a week! When you know the process, you can integrate your new project schedule tasks in a manageable way. You do not have to spend all day on the phone with people. You can have your work broken down into weekly meetings, and you’ll know who, what, and when to ask. A manageable weekly time commitment accomplishes your building construction goals one small bite at a time. Before you know it, you’ve “eaten the whole elephant.”

Ten steps of daycare development. The chart on the next page, “Example Daycare Project Schedule,” lists the ten steps in developing a new daycare center building and the average amount of time you can expect each step to take. This is an average schedule for you to get a general idea. Still, many variables could make this time frame longer or shorter, so speak to your design team about what they think is a reasonable expectation for your local area and the size of your project. Although these are typical estimates, to be safe, when planning your project, give yourself a little leeway and understand that the amount of time needed is unique to each project. To be safe, add a couple more months for a buffer.

For example, if you plan to open your daycare on August 1 to align with the start of the school year, back your finish date by two months and tell your design and construction team that you need the project completed by June 1. If unforeseen circumstances slow down your project, your stress will stay at a

manageable level. And if they finish on time, you will have the summer months to tour parents and enroll children for the upcoming school year. NOTE: This timeline does not consider how long it will take for you to find the right piece of land. I’ve seen the land search phase happen as quickly as one month and equally take as long as a year. That is entirely dependent on the availability of commercial land in the community you want to build in. What’s next? Your first hurdle is committing to take action; your second hurdle is to avoid major mistakes! There’s no denying it, taking on the task of building a commercial building is fraught with opportunities to make irreversible mistakes. I once had a client come to me after selecting a building site. He had me develop a concept plan for him as part of his due diligence process to confirm that the property would support his business plan. His business plan established that he needed 180 kids to support the site’s purchase price. No matter how we tried to lay that site out, when we included the minimum playground and parking spaces required, there was no way to put a 180-kid building on the site without building a two-story structure, which raised the cost of the construction. There was no way around it; the site wouldn’t work at the listing price the existing owner wanted. Ultimately the seller wouldn’t budge on the price. My client did the only reasonable thing and walked away from the deal. If he had bought the land first and then had us do a concept plan to prove or disprove the project’s viability after the purchase was completed, he would have been set up for failure for years to come. It would have taken him six or seven years of negative cash flow before enrollment rates increased enough to a level that offsets paying too much for a site that wasn’t ideal. You can save hours each week while avoiding mistakes. You can’t afford to waste time if you’re working a full-time job. And there’s no room for any wrong turn along the way that could set you back weeks

because you didn’t know what you didn’t know. Later in Chapter Five, we’ll explore what goes into a concept plan and how it is the foundation for avoiding mistakes. For now, just know that once you’ve gained the know-how (what to do and how to do it) and you have a systemized plan that lets you manage your project in just four to eight hours a week, you’re on track to realize your dream.

Don’t go it alone. It can look plenty simple from the outside when you don’t know what you don’t know (how could you if you’ve never been through the process). But beware! Once you start the process, the simplest change can activate a ripple effect throughout the project. And “ripple effects” are never cheap. To ensure your success, it is sensible to get a guide. For example, with the proper guidance, you won’t find yourself having gone too far on the design without getting the appropriate approvals from the proper government agencies. A mistake like that puts you behind and often requires changes to things you’ve already paid for. You can hire a development manager familiar with designing and constructing a daycare center for around $75-100k, or you can take an educational course that lays out the steps like ours at SaveOnBuilding.com for a fraction of the cost. What you’ll learn in this book will guide you in choosing the path most closely aligned with your current circumstances and readiness to take action. Whatever path you choose, you can count on it that going it alone is a fool’s journey.

Selecting the Right Location.

I bet your dream about your ideal daycare center has been mainly about what the building and the classrooms will look like. And you may have thought about what the playground would look like. That’s fine. But now that you are seriously thinking about actually doing it, it’s time to shift your focus from what the finished project will look like to selecting the site . . . from dreaming about it to doing it. Remember my previous example of the client who found a site he liked, but after designing concept plans, it became clear that the land could not support the size of a 180-kid building without making the building two-story? Keep this tale of caution in mind. When looking for land, you should not buy anything until you’ve had a concept site plan designed. This is the only way to ensure that the project you want to build will support the price of the land on which you plan to build it. In the next chapter, we’ll dig into concept planning and the importance of exercising due diligence. But first, let’s go shopping for land. Your goals as a business owner dictate what to do first. Choose the community you want to locate in or select the construction site you want to build on.

Choosing your community. Your “why you’re in business” aspirations play a significant role in choosing the type of community you intend to serve and the piece of land you choose to build on. Who do you serve?

Is it upper middle class? Is it families with children on the spectrum? Is it hard-working blue-collar parents striving to put food on the table? Is it the privileged elite who have the resources to give their children every possible advantage? There are as many daycare centers as there are tax brackets, communities, and individual needs. Knowing who you plan to serve will guide you in your property search. For example, underprivileged areas don’t have things the privileged kids have: food security, a safe outdoor play area, and a household with discretionary income to cover many basic needs. A low-income population daycare center will provide many services that well-to-do kids take for granted. The owner who picks a lower-class community has a different “why” for their business than the owner who serves the most advantaged neighborhoods. Getting clear on what you want to achieve with your business helps narrow the field of necessary demographics that drives the location you need.

Market research. When considering a building site, gather data about the surrounding area. There is no point looking for the perfect site until you thoroughly research the community you want to build in. If the demographics are not there to support your center, it won’t matter how perfect the land is. Scoping out the demographics. Demographics are a huge consideration when locating a daycare center. You’re looking for a specific age group for your type of daycare - typically young married couples planning to have children soon, moving into neighborhoods with other young families. You’re looking for areas in a community where there are:

new starter housing newly developed shopping centers newly-wed couples moving in lots of youth-related services nearby Is there a need in the community for another daycare option? To answer that question, do a Google search to locate the daycare centers in your chosen community and mark their location on a map. (Google maps lets you “pin” sites important to you on Google Maps.) Visit the website of each daycare in your search area. What are they offering? Who are they marketing to? What makes your business plan different from theirs? Drive by their locations and rate them on location and aesthetics . . . and while you’re at it, keep your eye out for vacant lots!

Evaluating the competition. There could be dozens of daycare centers in your chosen community, but whether or not they qualify as competition needs in-depth research. They are competitors if: Their facilities are attractive. They provide the same services you do. Their websites are professionally done. They market to the same demographic you serve. They are located near where you might like to build. They have low enrollments and are actively advertising. Their pricing structure is more affordable than your enrollment fees. The results of your research will tell you if the market is saturated or if it’s crying out for your type of services. If the market isn’t saturated, give yourself the green light to start shopping for a building site.

Start your site search with a general idea of the size and shape of the site. (You’ll learn more in Chapter Five when we discuss preparing a concept plan.) When you find a site that’s about the right size and shape, stop! Before you go any further, find out if it’s zoned properly, and if not, is there a good chance the zoning could be modified? Every county has zoning maps with many zoning designations. Search for your zoning map online and look up the address. If it isn’t clear, call the zoning office and ask them to look it up for you. If the zoning classification checks out, look for the following land features: Is the topography building friendly? If it’s a hillside or heavily wooded, that adds to building costs. Are the wetlands on the property? If it’s wetlands, you will likely have to find out if there are any protected wildlife present. If not, you’ll spend money filling the wetlands with new soil. What’s the visibility from the street? You want your business to be easily seen and found. What’s the daily traffic volume? Can the site be easily accessed by traffic going in both directions? A main commuter street will make it easy for parents driving to and from work. If you are well-known and have a waiting list because of your reputation, mom and dad are willing to go out of their way to drop off and pick up their kids. If you are unknown to the community, having convenient drop-off and pick-up access is a big plus. What do the neighboring buildings look like? The surrounding properties are almost as important as your own property. It’s essential that they are well-kept.

Once you’ve narrowed it down to a few contenders, compare their physical features and available utilities, and begin the due diligence process on each of them. Due diligence is a period of time that allows you to thoroughly investigate the feasibility of the land you are considering for purchase. It is crucial to have as long of a due diligence time period as you can negotiate. The longer, the better. Anything less than 90 days puts you at risk of making an uninformed decision. While in due diligence, verify zoning, have the parcel surveyed, investigate future development plans for neighboring properties, and complete soil testing to reveal unseen and expensive construction obstacles like bedrock. You will also use your due diligence time to get your business plan written and your concept plans designed to prove or disprove that your business model will support the cost of the land. The cost of the land is separate from construction costs. Your project costs will be unique to you based on the property you choose. If you end up with two locations and are having a hard time choosing, select the one that will be easier to build on.

Supporting Your Business Plan.

Does your business plan support the cost of development? To see if your business model will support the cost of development, you need to get to your numbers in order. Begin with your business plan to determine if your projected earnings can support the land purchase and the construction cost. Get this crucial calculation wrong, and you’ll be setting yourself up for failure! We’ve all seen those buildings that get halfway built and then abandoned because of miscalculations along the way. Don’t let that be you. Keep your emotions and your pride in check. Commercial building design and construction decisions are business, not personal. Reverse engineer your budget.

The following information and calculations are going to get a little complex and tedious. If you find this portion of the book to be a little too tedious, I want to point out that there is a companion workbook for these and all of the calculations outlined in this book. If you would like extra examples and worksheets for more help, seek out the workbook for additional assistance, “Building Your Daycare: The Workbook.” And if video learning is your jive, check out the Resources section at the end of the book for a link to in-depth video courses to help you through it. Remember, you are not alone in this! That being said, let’s get started on reverse-engineering your budget! The future starts with the past. If you already own a childcare business, you are lucky enough to know and have access to in-depth operating expenses.

Just make sure to account for the size of the business you are planning by multiplying your current expenses by the new business size increase you are projecting. For instance, if you currently have a 50-student building and are planning a 100-student one, make sure to double all your expenses. Use the following equation to calculate how large of a mortgage payment your business plan can support. Operating Revenue – Operating Expenses = Mortgage Payment Your Business Can Support Start with determining your projected operating revenue by calculating the number of children you plan to enroll in your new building by the tuition rates you intend to charge. For example, 100 children times $1,400 tuition fees per month equal $140,000 per month. Make sure to consider each age group and the fact that you charge different rates and need more teachers for infants than preschool and after-school children. From that number, subtract your projected future operating expenses; payroll, utilities, insurance, maintenance, supplies, etc. Leave out your mortgage payment expense because that is what we are trying to determine. For example, $54,000 a month in payroll, plus $10,000 a month in utilities, plus $6,000 a month for insurance, plus $4,000 a month for maintenance, plus $6,000 a month for supplies and misc. That totals $80,000 a month. Our Example: $140,000 Operating Revenue - $ 80,000 Operating Expenses $ 60,000 Mortgage Payment Your Business Can Support The amounts in the example above are fictitious and are offered and simplified for illustrative purposes. Market research on enrollment rates, payroll, utilities, insurance, supplies, etc., varies by location. A full and more

complete accounting of all operational needs, as well as buffer amounts for variations in enrollments, should be included in your budget list. For instance, instead of planning to always be at 100% enrollment capacity when calculating your tuition revenue, prepare to be at 80% enrollment instead. This will account for a safety buffer built in. Now that you know the mortgage payment your business can support, the next step is to determine your construction budget. These are your big-ticket expense items: Land purchase costs Site construction costs Building construction costs Playground equipment costs Furniture costs. Soft costs Financing fees Reference the historical cost data in Chapter 1. You can also find my video explanation of these costs on my YouTube channel @SaveOnBuilding. Using the cost data from the table in Chapter 1, we can assign average percentages to each cost category. Another word of caution, the costs I use as an example in this book are fictitious simplified figures for illustrative purposes. Actual prices are based on your local market demands. Land purchase costs 20% Site construction costs 18% Building construction costs 36% Playground equipment costs 02% Furniture costs. 02% Soft costs 12% Financing fees 10% TOTAL 100% With these percentage breakdowns, you can divide the monthly mortgage

payment your business plan can support by the following percentages. In our example, we ended up with an allowable monthly mortgage payment of $60,000. Don’t stop here! Keep going! Now that you know your target mortgage payment, the easiest way to determine how much loan you can support with your business plan is to go online to a mortgage calculator. The below image is an example of what you’ll find when you search online. Set the calculator to a 15-year fixed loan. That is the most common type of commercial loan and is likely what you will be getting from your lender. Start inputting estimated loan amounts (on the online calculator, it will be labeled “Home Price”) until the result for “Total Monthly Payment” is nearly equal to the mortgage you can afford.

Congratulations! You have now determined your construction budget! Looking at the calculations filled out online for our example project, you will see that if you can afford a $60,000 monthly mortgage payment, then you can afford a $7.4 Million construction project. The next step is to determine how those $7.4 Million will be allocated across your construction project and what the estimated budget amount will be for the building portion of the project. That takes us back to the project cost data shared in Chapter 1 and reviewed again earlier in this section. Multiply your budget amount, in our example case, $7.4 Million by the following amounts to determine roughly where your

money will be spent over the course of the project. Land purchase costs 20% x $7.4M = $ 1,480,000 Site construction costs 18% x $7.4M = $ 1,332,000 Building construction costs 36% x $7.4M = $ 2,664,000 Playground equipment costs 02% x $7.4M = $ 148,000 Furniture costs. 02% x $7.4M = $ 148,000 Soft costs 12% x $7.4M = $ 888,000 Financing fees 10% x $7.4M = $ 740,000 TOTAL 100% x $7.4M = $7,400,000 Ta-da! Now you have an estimated construction budget! Include this information in your business plan when you approach banks about getting a loan, and they are guaranteed to take you seriously! I can’t move on to the next step without ensuring you understand that these are estimated costs. As you work through each project step, update your budget with actual costs to ensure you are still working within your estimates. For example, if your final land purchase costs are only $1,000,000, you now have an extra $480,000 in your budget to allocate to other items. Conversely, if your land purchase costs go over budget at $2,000,000, you now have to take $520,000 from somewhere else. As for your building costs, the final mathematical step is to determine how much building you can afford to build. In our example calculations, the Building Cost equaled $2.66 Million. With our example planned 100 child enrollment, and knowing from our cost data that each child accounts for about 65 square feet of building area, you can calculate the size of building you will need and the cost per square foot you can afford to build. The number of children x 65 sf per child = total building size. Example: 100 children x 65 sf per child = 6,500 square foot building. Building budget / Total building size needed = Cost per sf.

Example: $2,666,000 budget / 6,500 sf = $410 per sf. Now our example project calculations have determined that the size of the building you can afford equals 6,500 square feet. And that the construction cost budget you can afford is $410 per square foot. For a total building construction budget of $2,666,000. Try your own calculations and see how your project fares. How did your calculations work out for you? If your cost per square foot is below $250 per square foot, I do not recommend you move forward. As of the time of this book publishing, the average daycare building construction costs range from $238-$286 per square foot. To see current construction costs, go to the following webpage: www.saveonbuilding.com/currentconstruction-costs. I’ve heard of only a few things from my childcare clients that allow them to make more money beyond tuition fees. You could add weekend or 24-hour care to your business offerings. You could rent you’re your building to various organizations during off hours. Would you want to be forced into those situations to cover your mortgage? Daycares are unlike restaurants that can add outdoor dining or To-Go options to increase revenue capacity. Once your building is built, you can’t squeeze in more kids than what you’re licensed for! Bottom line: Does your planned daycare business have the budget to support the required number of students to justify the cost of buying the land and building this facility? If you can answer that question with a “yes,” then go for it!

You found a great site; now what? You’re not wrong to dream about how you will use the site and what it will look like when it’s finished. But you can’t ignore the process you must go through to get there.

The Letter of Intent. The first step in buying the property is to submit a letter of intent (LOI). This is a non-binding document that outlines the general terms and conditions of the purchase agreement between you and the seller before the formal purchase agreement is finalized. It’s intended to start as a draft agreement and become a completed contract later. It specifies the amount of time following the seller’s acceptance of the letter that you have to conduct a due diligence investigation of the property to see if there’s any reason why you shouldn’t move forward with the purchase of the land or the building. Some of the things you’ll be checking on are: Will the current property zoning allow for daycare use on the property? Will your daycare fit on the land? Does the location match your ideal demographics? Although the LOI is typically non-binding, there are rare occasions when the document may contain terminology that states the parties are legally bound to the terms. Read carefully before signing! A letter of intent in a commercial real estate transaction is similar to when you make an offer to buy a house. The initial offer to purchase a home typically contains certain contingencies that must be met before the offer is finalized. The contingencies allow time to do the due diligence in getting satisfactory inspection reports like the condition of the roof, the foundation, the electrical, plumbing, etc. The buyer has a specified time period to conduct the inspections. If the inspections reveal a negative condition severe enough to call off the deal, the contingencies let the buyer off the hook. A letter of intent (LOI) does the same thing as contingencies when buying a house. It gives you time to perform your due diligence, especially the crucial part of creating a concept plan, which should begin as soon as you have your

signed LOI and definitely before you purchase the land. The purpose of the concept plan, which includes conducting a viability study, is to ensure that what you want to build will fit on the land and that your business plan supports the cost of the land and construction. Your due diligence period begins when you sign the LOI and give a deposit to the seller. Sixty days is a typical due diligence time period to perform a viability check on the suitability of the land for the project you want to build. But it never hurts to ask for 90 days or even more if you think the landlord will allow the longer due diligence period. 90-120 days gives you more time to have inspections completed and analyzed and decisions made about whether to move forward. Don’t let a landowner push you into a short due diligence period. That’s a red flag that they may know something is wrong with the property and don’t want you to find out about it. 90-120 days may seem like a long time to check out the property’s suitability, but most land owners don’t have a survey, so you must have the property surveyed, which can easily take six weeks. It can take a while to get all of those reports completed and reviewed and there’s more research to do. After your LOI is accepted and before you close on the property, immediately begin a Feasibility Study and a Concept Site Plan simultaneously

The Feasibility Study. The feasibility study and your due diligence aren’t necessarily going to report that you absolutely can’t build at the site you like. The report details significant high-dollar issues requiring remediation, meaning you’d have to add that cost to your budget if you want to use that land. That could prevent the site from being financially feasible to build on. For example, things like: Bedrock (solid rock under the soil) could easily cost $50,000 to $100,000 to remove (which would blow your budget out of the water).

Sloping land increases the cost of construction because of the requirement to install expensive retaining walls. A wetland in a flood zone requires you to raise the land elevation and get the FEMA flood zone map changed. That could take months and thousands of dollars. A liquor store located within 200 feet. You can’t have a school and a liquor store next to each other; daycare is technically a school. There could be any number of other incompatible uses that would prevent zoning approval that you must investigate. Environmental issues can be a deal breaker. For instance, if the site used to be a gas station, it’s likely underground gas storage tanks have contributed to soil contamination. Mitigating the contamination can run into hundreds of thousands of dollars. If it’s bare land, you’re checking for soils that could be unsuitable for building on. You want to combine the feasibility study with your due diligence to ensure there’s no reason why your new building won’t work in that location. What about a feasibility study on an existing building? If you find an existing building, your feasibility report and due diligence will include all the items previously mentioned for a new building but will also involve looking for the presence of structural damage, water damage, asbestos, mold, and lead paint. These are the most common issues in older buildings like churches or warehouses. If the building was built in the 70s, one thing you can be sure of is you can’t just slap on some fresh paint and move some kids in. Rehabilitating or remodeling an existing building into a daycare can quickly become just as expensive as building a brand-new facility. The biggest advantage to finding and using an existing building is if it is in a high-traffic popular location within the heart of your community. If the site is a prime location, but the building is in too poor of a condition to rehabilitate, it can easily be more economical to tear down the old building

and build a new one.

The Endangered Species Laws. Many states have endangered species laws that prohibit disturbing natural wildlife habitats. Be sure there are no such habitats on the site you’re checking out.

The Concept Site Plan. The concept plan is typically a one-page drawing laying out the building footprint, parking lot, playground, landscaping, setbacks, retaining walls, stormwater detention, and curb cuts for driveway access from the street. The object of the concept site plan is to show just enough detail to give you a realistic picture of how your building and all of the required site elements will fit on the property. Here are a few examples of the things that need to be considered in a concept plan: Is there turn lane access to the facility? Is there a side street or main road entrance? Is there enough space for the correct sizes of playgrounds needed? Can the children access the playground directly from their classrooms? Can you fit a large enough building to support your expected students? Will there be enough parking spaces to meet zoning requirements? Will the required landscape and planting islands fit? The site plan typically contains a simple line drawing. Building set-back dimensions are usually added to this document. In the final draft, all items are drawn to scale, and for planning purposes, the building entries and exits

are located. Not much detail is put into things that can’t change or will evolve during the design process. It is in no way permit ready. Remember, this plan is created to prove or disprove that the land being considered for purchase will or will not work for your business needs. Example Concept Site Plan:

Now for the fun

stuff! Move on to Part 2, where it’s all about seeing your vision come to life!

Your Vision Comes to Life.

You’ve got a lot of great ideas of what your ideal daycare center will look like. When you hire your building designer (aka Architect), their job is to transfer your vision into an actual building. The more specific and detailed you are on what you want your building to look like, the more closely your designer will deliver a building that will look like your vision. You need to communicate to get your vision of what you want to build out of your head and into your designer’s head. And the best way to communicate ideas is through sharing pictures. While you may have gotten some of your ideas by poring over architectural magazines and taking pictures of design ideas, it’s more likely you began gathering ideas online with a Google search that offered up multiple platforms such as Pinterest and Houzz. Now’s the time to organize your collections, especially if you have a few different ideas and haven’t decided which direction to go. At this time, you may have more clarity on what you don’t want, which is also as good a place to start as any. I suggest you use the following categories: Floor Plans Interior Finishes and Furnishings Exterior Building Playground My best advice is to keep your images all in one place and organized in

different categories, like inside versus outside, contemporary versus traditional. I’ve had clients come up with a few different ideas and were not sure which direction to go. Keeping it all in one place helps you communicate with your designer and makes it easier to see all the ideas that appeal to you at once.

Candid communication is key. Getting your vision into your designer’s head takes way more back-and-forth conversation than you might think. For instance, you may have an idea about some element of design that is not structurally sound, is a budget buster, violates some building department code, and so on. There will be many instances when your designer will have to tweak your vision for practical or structural reasons. Architects are like any specialized profession because they have industry jargon only understood by other architects. That’s why it can take some back and forth for you to get your ideas across. The important thing to remember is that the more candid you are with your feedback (criticism), the happier your designer will be. So don’t be afraid to speak up. If you can’t openly communicate back and forth, you will not get anything close to what you want. In my experience as a designer, I’ve rarely had a client say “No. I don’t like that. Do it differently.” If you think about it, that’s pretty shocking. I think it’s very unlikely that I’ve perfectly guessed what they wanted every time. That’s got to be impossible, yet nobody ever returns and says they don’t like something.

Don’t let that happen to you! The challenge most clients face is that while the vision in their head is clear, it’s not easy to translate it into everyday words. You can be clear in your mind what you want but not have the words to describe it in a way your

designer gets it.

What if you don’t like the design? Some of my most successful clients didn’t come out and say they didn’t like something. They just kept asking questions. For example, I was working on the design of an awkward hallway. My client kept asking over and over, “What’s that going to look like?” Again and again, I tried different ways to explain to him what the finished hallway would look like. It took me a couple of weeks to realize that he knew exactly what it would look like, and he didn’t like the way it was going to look! Had he just spoken more plainly and candidly, we would have saved weeks of back-and-forth questions and answers. If your designer shows you an idea you don’t love, plainly say, “That’s not exactly what I want. Let me find a picture that is more like what I want.” When you communicate that you don’t like an idea, please don’t leave your designer guessing. Share ideas of what you would rather see in its place. Likely you already gave your designer an image of what you wanted, but their design looks completely different. Don’t respond with the original image because there was probably a practical reason why the finished design didn’t look like that. Come back with a second image of “can it look more like this?” Or ask, “Is there a reason it can’t look more like my inspiration photo?” More example phrases to use when you don’t like the design: “It’s not my favorite. Can we use something else?” “Wood paneling is not my favorite. Is there something else we can use that won’t dent when kids bang into it?” “It’s so expensive. I don’t like it enough to spend extra money on it.” “Brick is so expensive. I would rather spend my budget on nicer classroom furniture.”

“It’s not my thing. Please remove this item.” “Curtains are not my thing; they collect dust; please remove them. I only want blinds on the windows.” “To be honest, I’d prefer…” “To be honest, I’d prefer a neutral wall color since all of the toys already add so much color to the classrooms “I’m not a fan of …” “I’m not a fan of gingerbread trim and details. I want to keep the trim simple.” “I’m not crazy about …” “I’m not crazy about using vinyl floor tile. You have to wax it too often. What can I use that is easy to clean and take care of?” “I’d rather not …” “I’d rather not hear crying babies all day.” “What can we do to solve this problem?” “What can we do to keep the classrooms from being so noisy?” The key takeaway is to speak up about what you want and not settle for something out of fear of hurting the designer’s feelings. As an architect, I can promise that designers desperately want to hear your feedback and develop solutions that will make you happy. As a general rule, architects are idea-generating machines that are people-pleasers and problem-solvers. So bring them your ideas, your problems, and most of all, your feedback!

Style drives cost. When making decisions about your building design, be aware that every design decision you choose has a cost impact, either up or down, on your budget. Sooner or later, your vision’s pretty picture will likely clash with your budget. The critical thing to know is that it’s OK to show inspirational photos of buildings that you know are outside your budget and ask your architect to develop a way to get a similar look or feel while staying within your budget. For example, consider the design choice of a one-story structure versus a

two-story structure. A two-story building needs a smaller footprint than a one-story building. But when you’re building a two-story commercial building, it’s not like building a two-story house. The house only requires one set of stairs to reach the second story. Your two-story commercial building will need two sets of stairs and an elevator. The extra stairs and the elevator not only add to your construction costs but also add time to your construction schedule and long-term maintenance and inspection costs. I don’t discourage my clients from making these types of choices. I just verify they’re aware of the long-term costs and maintenance of a design choice so they can account for it. I never want a client to be surprised later and wish they had known about these issues ahead of time. There will be an endless supply of design choices as you go through the project’s design and construction process for every feature of your building. For instance, what kind of ceiling do you want? Do you want a drywall ceiling, or do you want acoustic ceiling tiles? If you respond “drywall,” the next question is, “do you want round recessed lights or surface-mounted linear lights”? To stay on top of your budget, you must understand the cost associated with every decision you make. Your architect can help you discover which items cost more or less, but the ultimate price is not determined until the contractor bids on the project. Some styles just cost more than others. There’s a direct correlation between the building style you envision and the cost of building it. For example, you may love the look of specialty windows, but there’s a reason why everybody (mostly) uses the same windows. “Standard” is more economical than “specialty. A good rule of thumb is “the more detail, the more money.” A more ornate siding detail or a more ornate roof structure will cost more than something simpler. When it comes to style choices, it’s not just the cost consideration. There’s the approval of the appearance of your building from the planning commission or zoning board. You can’t just build whatever you want. City

zoning departments have been burned by rogue business owners with no regard for design standards in the past, and they tend to be strict. For instance, if you’re in an all-brick area with strict size regulations for (like Connecticut), you will not be allowed to put up a billboard-sized structure with a giant Vegas-style neon sign. When you’re designing your building, it must fall in line with established “community standards.” So even if you could afford a specific modern style or something more unique, you still have to get approval from the zoning architectural design review committee.

Design thresholds to know. You need to be aware of critical zoning and building code thresholds unique to each city. If you don’t pay attention and your design exceeds a threshold your design team isn’t aware of, that can dramatically impact the construction cost! Or the likelihood of approval. NOTE: Many towns have a historic district. If you want to build there, you must be triply careful! As the owner, it’s essential for you to hire designers that understand that certain design elements come up against zoning thresholds. The consequence of being as little as one foot over the size or building height threshold or choosing the wrong exterior paint color can be measured in construction dollars. Sadly, it’s easy to hire an inexperienced consultant who isn’t aware of certain thresholds. Just because they probably should be aware does mean they will be aware. Be careful. Hire someone with daycare center design experience. Otherwise, you’ll be paying for their mistakes while they learn a new building type. As the old saying goes, nobody watches your money as well as you do. That’s why you want to know the thresholds so you can ask for a small change in the design to avoid crossing a threshold that could cost you tens of thousands of dollars.

Here are a few threshold examples common to most communities:

Required fire sprinkler system. One of the most expensive threshold triggers is when the size of your building requires a fire sprinkler system. Be sure to question whether the size of the building will trigger that requirement. For example, the daycare building can generally be less than 13,000 square feet before it triggers the requirement for a fire sprinkler system, but sometimes the town is more strict, and it’s required for a daycare building as small as 6000 square feet. For example, in California, if you build a building less than 9,000 square feet, you don’t have to meet the requirement of a fire sprinkler system. If it’s 9,001 square feet, installing a fire sprinkler system is required, which can double the per-square-foot construction cost! Literally, if you are one square foot under the trigger square footage, you will save thousands of construction dollars. Each building type has a different square footage threshold for the fire sprinkler requirement. The requirement for daycare use is different than for office building use, so make sure you hire an architect that knows daycare use well. Being clear on the requirements for a fire sprinkler system is a huge factor in the cost per square foot of your building.

Stormwater detention: surface vs. underground. Some cities require you to drain all of your rainwater, a.k.a. stormwater, within your own piece of property. This means you have to include stormwater detention in your site design. If you have enough land area to include an open detention pond, you’ll avoid a megabucks budget item. But if your property isn’t large enough to handle a detention pond for rainwater run-off, you’ll be required to install giant pipes in a huge gravel pit

under the parking lot or playground and run all the rainwater through those giant pipes. This gravel pit full of large pipes is called a stormwater vault. The budget difference between installing an underground storm drainage vault versus handling storm drainage on the surface is so costly I’ve seen it cost six figures. Whether it’s worth the cost or not is determined by how much land costs in the area and whether the income from a great location will more than offset the initial cost.

Retaining walls. Almost no piece of land is perfectly flat, so some grading is almost always required. It’s not a big deal to have a three-foot retaining wall. The big deal is if your site needs a six-foot retaining wall because the retaining wall must be engineered at six feet or higher. You’ll have to get a structural engineer involved, and the wall has to have a separate permit. It will need fencing or some railing along the top to prevent someone from falling off the top of the wall. And with taller retaining walls, there are always drainage issues to manage. So, it’s not just the cost of the wall itself but also the stormwater drainage system that is hidden behind the wall. See how the complications multiply? Taller retaining walls that are six-foot or higher are a big-bucks item. This is why you often see multiple levels of three-foot walls terraced to get around the six-foot engineered retaining wall requirement. There are dozens more thresholds like these examples that would fill this entire book. But it was more practical to create a step-by-step course with detailed advice to guide you through the zoning threshold maze. You can check out the online courses we’ve sourced for you in the supplemental resources at the end of this book.

Selecting the style of building. Progressive building materials. Many new building materials like imitation wood or composite panels are coming to market. Some are better than what has been traditional. Some are more expensive than conventional ones because the imitation wood composite panels have a longer lifespan and don’t fade, warp, crack, or peel from the weathering process. The advantage of using the newer composite panels is that they last the life of the building and never need re-staining. It costs more to purchase and install, but you get the look of natural wood without any of the maintenance headaches. The downside is that imitation materials often cost more for installation because fewer contractors are skilled in the unique installing process. There’s a reason why most commercial daycares follow only two or three different building styles. It has to do with the lower cost of using a labor force that is used to building the same types of buildings. When you design a complex building system that is entirely unique, the contractor’s labor force doesn’t know how to construct it, so it costs more because it takes longer for the laborers to learn how to work on an unfamiliar job. For instance, most daycares look like really long ranch-style houses. The building materials and the structure of the typical daycare are similar to a home. It has wood-framed walls with a wood-framed roof, and the exterior materials are the same as you would find on a house. The exterior is typically some variation of brick, siding, and stucco because these three building materials are readily available at building supply centers near the construction site. Using everyday materials and installation techniques saves time and money because the contractor doesn’t have to train the framers and installers in new techniques. They already know how to do it. The second most common daycare building type is a commercial building style framed in steel with a parapet around the exterior and a flat roof. The

same can be said for this type of residential building. The building materials and the local labor force are readily available and skilled in constructing this building type. This makes it more affordable and quicker to build than something unique. Another advantage of a more commercial-style building is that you can use more glass for oversized windows by incorporating a storefront window system instead of separate residential windows. This allows for more light into the daycare, which is a more pleasant experience for both the children and the teachers. The commercial style building type is more expensive than the residential style. The steel structure allows for larger classrooms without the use of columns, a taller ceiling height that makes the rooms feel more appealing, and more natural daylight, promoting a connection to nature outside and a healthier development and learning environment. The third most common daycare building type is renovating an existing building. The easiest daycare remodel is to buy an existing daycare center and update the materials and finishes to freshen up the spaces. This is the most straightforward way to open a commercial daycare. The most common other types of buildings that are purchased are the following:

Office Buildings Office buildings seem to be the most common. More people are working remotely from home, so there’s less demand for office buildings. This has caused the cost to purchase an office building to go down while inflation is driving most other costs up. And office buildings, compared to other building types, are easier to change into a daycare. Office buildings generally have an open structure that makes it easy to add classroom walls. They also have an excessive amount of parking, which makes it easy to carve out an area large enough for playground spaces.

Churches Another common building type that transforms without much difficulty into childcare use is churches. Religious buildings are an easy transition into daycare because church buildings are generally already set up as classroom spaces for Sunday school and group gatherings. Many churches already have an auditorium which makes for a great indoor play area for children or can be subdivided into more classrooms. And the two-story volume of a typical church sanctuary allows you to add a second floor of classrooms within that space. Churches generally already have some playgrounds built and set aside on their property, but it’s usually not large enough for a typical commercial daycare. But if there’s one already there, you’re not creating a whole new playground, just adding some additional playground to the space, so you’re not necessarily starting from scratch.

Warehouses The third most common building type purchased by daycare owners and remodeled is warehouses. Warehouses are immense open structures, so it’s easy to put classrooms inside the vast open structure. The downside is the cost of adding all the extra plumbing needed to install more restrooms. Warehouses typically don’t have a large enough parking lot to carve out playground space. One creative way to fix that is to tear down some of the exterior warehouse walls and create a covered playground area that is under the warehouse roof but technically outside. Another secret to getting around a lack of parking area is to see if you are within walking distance of a commuter bus, train, or rail line. Many municipalities will allow you to reduce your parking requirements if you are within walking distance of public transportation.

Retail Shopping Centers For smaller daycare locations, it’s common to see owners move into strip shopping centers or drug stores and carve out playground areas from oversized parking lots.

There are a few exceptions. Building a daycare on a university campus may support a cutting-edge style or contemporary look that would be a more expensive construction cost. Many universities include child care on their campus, so the child care center needs to follow the style and guidelines of the university. Many times this drives the construction cost up. No worries, though. That extra construction cost is offset by the income stability that comes from knowing that you are the only daycare provider on the campus. This affords you less risk of not having enough students enroll in your school. Another example of a more cutting-edge style or contemporary look would be in a downtown environment of a large city. In this environment, your parents will expect a certain level of style for their children’s daycare. With this situation, you have the flexibility to add to your construction budget to design a unique style that is more contemporary. That budget is offset by the higher prices and enrollment fees you can charge for student tuition. The bottom line, daycare construction budgets don’t generally lend themselves to a high level of style. That means it’s essential for daycare owners to be budget conscious when selecting the building style they intend to build. In the following few chapters, we’ll move beyond design and get into the ins and outs of actually getting your building built!

How the zoning process works.

The zoning and permit approval process can be challenging, but it’s worth the effort. It may not be as simple and clear-cut as we’d like it to be, but it’s not rocket science either. You just have to be patient and take it one step at a time. In this chapter, I’ll give you the basics of how it’s done.

The purpose behind zoning. In almost every community, there are zoning regulations, and they exist for a reason. There are several different accounts of the origin of zoning policies in the United States. One is attributed to New York City adopting the first zoning ordinances in 1916 as a reaction to the construction of the Equitable Building, a massive 40-story building taking up a whole city block, unrelieved by setbacks and capable of housing 16,000 workers. It also blocked sunlight from surrounding buildings. Another account claims zoning laws were introduced in New York when a handful of early 20th-century New York businessmen built high-fashion shops, displacing mansions along the middle section of Fifth Avenue. Whatever their origin, today’s zoning laws exist to protect the community and its surroundings. Zoning laws give neighborhoods a coherent feel and prevent landowners from building inappropriate or unattractive structures next to you. In residential areas, zoning laws prevent your next-door neighbor from putting up a prefabricated metal warehouse - which is great because a

warehouse next door to your home would likely bring down your property value. If your neighbor could get a permit for their warehouse, it would have to have an exterior consistent with the rest of the community. Zoning laws tend to group like things together - commercial buildings near commercial buildings and residences near residences. Even if there are interspersed pockets, they are still in small groupings. When considering your commercial neighbors, consider whether the businesses will work harmoniously with yours. For example, how about a pediatrician’s office next door to the daycare center and a pizza carry-out shop next door to that? Parents could take their kids to the doctor, drop them off at daycare, and then pick up dinner and their children after work - all in one parking lot. The opposite is also true. You’d want to be protected from having a liquor store or a strip bar next door to your children’s daycare

Four zoning review types. There are four main zoning review types in property development. 1) No change is requested. You buy land zoned for daycare and intend to continue using it for a daycare.

The zoning process is straightforward if the land you’re purchasing is already zoned for daycare. You don’t need to ask the zoning department for anything. In this case, you will only need the zoning office’s architectural review board to review your exterior building and site design and approve it. 2) A Special Use Permit. Daycare is not specifically listed as an allowed use. You must ask for the daycare use approval.

This is just a matter of filling out paperwork telling the zoning department how large your daycare is. How many children it will serve. How many parking spaces you’ll have, and that’s it. It is more of an administrative approval process. The objective of a special use permit is to explain to the zoning department that although a daycare is not currently listed as an approved use for the property, having one on this piece of land is so similar to what is already allowed that a daycare should be allowed as well. 3) Re-zoning the Property. Re-zoning is completely changing the zoning classification of the property. This can take six to twelve months and is a long, multi-step process. Re-zoning is needed when you are thinking of purchasing a piece of land and daycare is not an allowed use within the land’s existing zoning classification. When this happens, you must go through a lengthy process of getting the property rezoned to a land use classification that allows for daycare use. In this situation, it is above and beyond an administrative process. Getting a property rezoned requires the land owner to prove to a Board of Commissioners that the new property classification would benefit the community. You may be asked to complete noise studies to prove that it’s not too noisy for the children when they’re outside playing or too loud for the neighboring properties when the children are all outside. You may also have to complete traffic studies to analyze the local traffic patterns. Daycare does bring a lot of traffic, especially during commute times, but it is easy to prove that the traffic will not have a detrimental effect. You may also have to illustrate that the community needs another daycare center and that your location would be an asset to the community. 4) A Zoning Variance. A zoning variance is used when you want to build something that doesn’t quite fit the zoning requirements. Typical examples would be: •

Constructing the building closer to the property line than the typical

• •

setback allows. Having a smaller parking lot because the property is not large enough. Fencing-in landscape buffers in order to have a large enough playground to meet child licensing requirements.

The key to a zoning variance is that you must prove hardship to get approved. You can’t just go to the zoning board and say, “because I want to.” There has to be a reason why you need the variance. For all of the above examples, you will always still need to have the local zoning department approve the exterior building design and exterior site design of the property regardless of whether it is already zoned for daycare or not. Getting a variance or conditional use permit can be difficult, time-consuming, and expensive. Annoying as it is to jump through bureaucratic zoning hoops, the rationale behind them makes sense. The laws represent a collective agreement everyone has to abide by. It protects your neighborhood from hideous, inappropriate structures that are inconsistent with your community. If there is a consolation prize about the zoning process, it’s that your nextdoor neighbor, business or residential, will have to do the same thing someday. Each municipality has unique zoning standards and requirements based on the accepted standards of the local citizens. Communities vary, and that’s why you’ll often find that what’s perfectly acceptable in one city is absolutely not allowed in another. For instance, most cities approve of McDonald’s standard building design, including the giant golden arches. But Santa Fe, New Mexico, required the new McDonald’s to cover their building and golden arches in adobe mud to comply with the city’s architectural design ordinance.

For comparison, look at the following illustration of two different cities.

Notice that many of the differences have to do with aesthetics. That’s why when you’re in Arizona, you see a lot of adobe, whereas in Washington, DC, you see mostly brick. Sometimes you want to do something contrary to a zoning rule, but you really want to do it anyway and have a good argument for doing it. If so, consider applying for a variance or conditional use permit. For example, a common daycare variance is to request a smaller number of required parking spaces per square foot of the building. In the past, we’ve often been able to argue for a smaller parking footprint because daycare is a drop-off and pick-up business, not a “park your car and eat or shop or get your teeth cleaned” business. Additionally, parents don’t drop their kids off at the same time. Not everybody arrives at 8:00 a.m. sharp. For the elementary students’ afterschool care, students arrive by bus. As for faculty parking, if your facility is close to a bus stop or a train station, you can have a reduction variance based on assuming a certain percentage of your staff will use those services. Getting a variance or a conditional use permit isn’t trivial. It’s actually a big deal.

You can sometimes push the boundaries, but you should have a highly compelling argument and be prepared to fight for it. Knowing when and where it’s worth spending the time and money to do it is important. You’ll most likely need to hire somebody who knows when, where, and how the boundaries can be pushed and what arguments to make for pushing them. For example, if you do or do not want to use certain materials or building aesthetics, they may have good ideas for supporting your choice.

How to apply for a zoning variance. The pros and cons of applying for a variance or a conditional use permit boil down to how badly you want it, how long it’s going to take to get it, and how much money you have to spend paying someone to help you. Getting a variance or conditional use permit can be complex, timeconsuming, and expensive. Most clients know zoning laws exist but may not be aware that their building is also subject to architectural review approval. The design process isn’t as simple as getting your building designed and applying for a building permit. No way. The architectural review is like the zoning review. You submit your application, receive comments, make adjustments to the design, and then get approval. Fortunately, zoning and architectural reviews are usually combined. Your community has a zoning committee. In some towns, it’s called a planning commission. The review committee is made up of people who live in that community. They are other land owners, developers, business owners, engineers, and architects. Although you don’t have to be in the property development industry to serve on a board of commissioners, people who already have a career in a development-related field are the same people who are usually interested enough to serve on the board.

The idea behind the board is that it is a group of people that live in the community. A perfect committee is a group of various opinions, backgrounds, and careers. They will discuss and debate the merits of your zoning request amongst themselves in private, then hear your request and supporting argument in public. Ultimately, they decide whether to allow the request or not by way of public voting. If you haven’t bought a property yet, consider attending a couple of meetings as part of your due diligence. You can schedule a meeting to talk to a committee member one-on-one. But when the time comes for you to submit your formal building design for review and approval, the conference will be a formal legal process in front of the entire committee. A typical meeting has several different projects on the agenda. You’ll be given an agenda a day or two before your scheduled meeting. This agenda will let you know when they will hear your presentation. It is recommended that the owner always be present for these meetings, but most owners prefer to have their architect, engineer, or zoning attorney present on their behalf. They’re concerned, and correctly so, that the board will ask questions that they do not know how to answer. Your architect will present about the building design and aesthetics, and your civil engineer will present about parking, traffic, landscaping, and stormwater mitigation. Preparation for a zoning review meeting happens months in advance.

120 days out – you prepare. All the paperwork you need to complete and submit 30 days before the meeting takes a long time to accomplish. You must complete your building floor plan, exterior building design, and all of your site design before

submitting your application. So, the preparation phase starts well before the initial application. Preparation can take as long as three months.

60 days out - we start. Sixty days before your first zoning and architectural review meeting, you complete the paperwork requested on an application checklist. To fill out the application, you’ll need your site plan, architectural renderings, property survey, engineering design, and material samples. You submit this fairly lengthy application with a review fee. Whether the meeting will be in-person or virtual, you must still send in the building material samples with your application. Within a couple of weeks of your application submission, you are contacted by the city. They will confirm that your application and submission are complete and that you have been scheduled for the next commission meeting. These meetings occur monthly.

30 days out – you wait. You wait thirty days, then show up at the first review meeting. Meanwhile… In the interim, the committee reviews and debates the pros and cons of your application internally before meeting with you publicly. It’s also common to have a pre-meeting with the applicant (that’s you and your architect) to familiarize the architectural review committee (or just a single committee member) with your project and what you want to accomplish before accepting an application. This is to prevent the committee from getting a lot of applications that would immediately be denied. At the first meeting, the committee may ask clarifying questions and have some feedback for you on additional things you need to do. They may ask for a traffic study or noise study. Sometimes it can be a

stormwater study if they don’t think you’ve provided a large enough stormwater area. These studies are done by engaging outside specialist consultants as an additional service, not by an architect or civil engineer. If there’s an aesthetic requirement they want to be changed, like the color of the brick, it will need to be changed on all of the drawings. A change of this magnitude means meeting with your architect again and selecting new exterior materials - many times, changing the brick means you also have to change paint colors or stone types, and even roofing material colors as well. After all those materials have been reselected, you call the architect, who calls the brick guys and the stone guys. They get a bunch of other colors together and then meet with the architect to select a new exterior facade combination of materials – after new materials have been selected, the architect has the rendering company re-render the presentation images. You address the obstacles and then request getting on the meeting agenda again. Say it takes a week for them to give you their comments, and it takes you a couple of weeks at least (sometimes longer) to address them. Now you resubmit a new application package and wait an additional 30 days for the next meeting.

An approval (you hope)! At your final meeting with the planning and zoning commission, your team will explain how each of their earlier comments were addressed. If everything looks acceptable to them, they sign off. They’ll vote on the final approval in public at the meeting, and a week or so later, you will receive a formal approval letter in the mail. Adding up all the steps, its easy to see that it becomes at least a three-month process. Now on to Chapter Seven, when your dream daycare comes to life.

Permit Approvals

Your initial concept design was prepared and presented to the zoning review board for zoning approval. Now that you have your zoning approval, you’ll face a few more hoops to jump through before applying for your building permits. It’s time to get your civil engineer to prepare a more detailed site design and your architect to prepare a more detailed building design plan.

Design Documents. Design documents more fully detail what you will have built on the site. This is when you begin the engineering portion of your project, and your architect starts to engage their mechanical, electrical, plumbing (MEP), and structural engineers. At the end of the design documents process, you’re about 50% complete with the project design. At this point, as the owner, you review the design documents to make sure that you’re happy with everything that has been selected and designed.

Construction Documents. After you have approved the design documents, the engineers and architect will complete the construction documents that show the site engineering and building construction detail. The construction documents are the documents you will need to be completed to apply for permits.

First, the Site permit (Land Disturbance permit), then the Building permit You must apply for a site (land disturbance permit) before applying for the building permit. You can apply for a building permit when you are issued a land disturbance review number. The logic behind this is that a town will not issue a permit to construct a building on a piece of land that does not have permission to be developed on. The permit process can very quickly turn into a six-to-twelve-month process if you’re not careful. Suppose you make the mistake of trying to speed up the process by having the architect and engineers move forward with design documents and construction documents before zoning approval has occurred. In that case, you risk spending tens of thousands of dollars on a design that has to be scrapped and require you to go back to square one to start the whole process.

Applying for permits. You’re on the home stretch! Your civil engineer will prepare the site permit package, and your architect will prepare the building permit package, and they each will submit their plans to the Planning and Building Departments. A time-saving secret . . . Do not wait for one permit service to finish before you start another—plan to work concurrently whenever possible. For example, getting a site permit can run simultaneously with the building permit. You just have to have a site permit application number, meaning that it’s being reviewed. With permits in hand, it’s time to begin the building process. Even if you’re still in the building permitting process - your contractor can begin the earthwork and site clearing. It’s a tricky move, though . . . If you start your earthwork too early, you run the possibility of your main

contractor having to stop work and wait for the building permit. With a daycare center, the time required for the initial site clearing and rough grading might be only four to six weeks. Yes, starting work before a building permit is a slight risk. Contractors don’t like to do it because it puts them at risk of having to stop and demobilize. It’s not perfect, but if you time it right, it works out and shaves weeks off of your construction schedule. Sometimes there’s a holdup on a building permit. Something could hold up the review process for a few weeks, and it has nothing to do with the project as a whole other than getting that official final approval from them. It might be an argument between the plumbing reviewer and the Fire Marshall over what size fire pipe needs to come into the building. See? Even if the building design is thoroughly documented, there can still be conflicts in the various codes it must comply with or conflicts among the code reviewers about which code needs to take priority over the others.

Bidding your project. Plan to bid out to three - five contractors. Never more, never less. You must have the winning bid’s hard numbers to finalize the financing. After you get your bids back from the general contractors and decide which contractor you will work with, send their bid to banks and lenders to get final interest rate quotes and secure the construction financing. Choose the lender with the most favorable interest rate and terms and finalize the construction loan. When construction is finished, the construction loan converts to a traditional mortgage - typically a 15- or 20-year commercial mortgage. If you want to shave one month off the process, bid it out while the permit package is being reviewed. Don’t wait until you have your permit to hire your contractor. Hire your contractor while your project is in permit review.

This time-saving technique is typical and expected by both your contractor and your lender. You let the contractors know where you are in the permitting process and that any changes due to permit comments will be addressed as a Change Order. With permits and financing in hand, you’re ready for construction! You are on your way! What might have seemed impossible early on has now become a reality. Tedious, for sure. Draining, yes. But very doable. Now, go on to Chapter Eight, where you will learn a thing or two about the construction process.

The Construction Process

What to expect from your contractor. As the owner, you play the most crucial role in the construction process, which goes way beyond selecting the contractor. Don’t allow the contractor to begin any work until your contractor has delivered the written (never verbal only) construction plan. This plan should clearly state the bid price and the construction schedule, including the hard start and finish dates, so you’ll know what to expect at every stage of construction. You should not be left in the dark. When your building permit is approved, call your contractor and let him know. The building permit is issued to the contractor, and he is the one who picks it up. If review fees have not been paid, the permit office will expect the review fee payment and will not issue the permit without the payment first. After you’ve made the phone call to your contractor, letting him know to pick up the permit, have your architect follow up with an email that includes a formal written notice to proceed with construction so that the start date for construction can be established. Once the contractor has picked up the building permit, he will begin to mobilize his team of subcontractors. For the owner, the construction process begins with an Owner/Architect/Contractor (OAC) construction kickoff meeting that your architect schedules. This meeting usually happens a week or two after the

permit has been picked up. The contractor has a site supervisor who is physically on your property daily, managing and supervising the subcontractors’ work. The contractor also has a project manager who manages the subcontractors’ schedules, product delivery dates, and budget paperwork in the office. Together, these two people will be the backbone of your construction progress. And as such, both of them should be present at all OAC meetings. As the contractor goes about the construction work, you will have weekly conference calls with them and your architect. All three of you (the owner, the architect, and the contractor) must be on the call together to discuss the construction progress and keep communication open between everybody. The purpose of these weekly calls is to keep communication open among all team members.

Contractor payments. Because the dollar amount of a construction contract is so large, it’s unreasonable to expect a contractor to complete all the work without pay until it’s finished. Your contractor will submit a pay application at the end of each month based on how much work is completed. This payment request will be sent to you and your architect. Your architect will visit the site every month to verify that the contractor has completed the amount of work that he’s asking to be paid for. If everything is in order, the architect approves the pay application and sends it to you. Then you send the payment request to your lender for a payment withdrawal. The bank will then send the payment directly to the contractor. This process repeats monthly until construction is completed.

Change orders. Change orders can happen anytime during construction. There are two kinds of change orders: contractor-initiated and owner-initiated.

Your architect and contractor will likely approach you during the project about potential changes to the design. When the idea to make a change comes up, the architect and contractor will verbally discuss it with you and walk you through the concept. If you agree to consider the change, the contractor will find out how much the change will cost or how much the change will save. Then he will write up a formal change order. A change order is a memo that outlines the change that would be made and how much the change would cost or save you if you were to accept it. Only after you have signed the change order is it approved for the general contractor to move forward with the change. You’re not automatically required to agree to a change order. That’s negotiable. There are times when change orders are valid, but not always. Just because somebody has a bright idea to change something doesn’t mean you have to agree to it. I recently had a client who wanted to change out the type of wall insulation after the permit was issued. This meant revising the energy calculations and having the permit official review and approve the change.

If a change order requires approval from the building permit official, this will cause a delay for as long as it takes to get the approval. The price of changing your mind late in the project is steep. Suppose you change your mind about some element of your plan after the initial design process is completed. In that case, you’re not just spending extra money for one person’s hourly rate to revise the drawings, but on all the other consultants who have worked on the project as well: architect civil engineer landscape architect structural engineer mechanical engineers

electrical engineer plumbing engineer Instead of getting an invoice for a single person to make the change, you’ll get a bill for the five or six people working on your project all at the same time An example of a contractor-initiated change order would be when the contractor is digging a trench for a pipe and runs into boulders. It’s an unforeseen condition. Nobody was expecting it. The rock removal will increase the construction cost. A change order is written up and presented to you, the owner, and the architect for approval. A typical owner-initiated change can happen because the owner has seen a new building go up with a different style roof and wants that instead of the roof she initially agreed to. Or, during a construction site visit, they walk through the kitchen and realize they want more cabinets. They’ll ask the contractor what the cost difference would be for the change. The contractor returns to his subcontractor to find out the cost difference and then gets back to the owner to see if they still want to do it. For any change outside of the original specifications, the contractor will write up a change order stating the price differential and send the change order to both the owner and the architect for approval and sign-off. A contractor should never change anything on your construction project without your prior approval.

Project closeout phase. At the project wraps up completion, you and your architect will do the final punch list inspection. You will check for final paint touchup, wall dings, missing grab bars, etc. It’s more small superficial items at this point because you’re in the final stage of the project. The last inspection is the Fire Marshall. When your contractor has passed this inspection, the Certificate of Occupancy will be issued. This certificate legally allows you to occupy the building, accept furniture deliveries, move

into the building, tour new parents, set up the classrooms, and open for business. Now that your building is ready for occupancy, the focus shifts to getting licensed to run a daycare facility. This means being visited by the childcare licensing agent who comes to inspect the building. When you pass inspection, you’re issued a license to be a childcare provider business. NOTE: A childcare provider’s license is separate from a business license. You will need both. The contractor’s one-year warranty. For one year following the issuance of the final Certificate of Occupancy, the construction is covered by your contractor’s warranty. Anything that goes wrong with your building during the first year, other than wear and tear, will be fixed by your contractor free of charge. Setting a date up in your calendar for 10 months after construction is complete is wise. Walk around the building and site and verify that everything is still in good working order. If you notice any items needing fixing, write a list and email it to your contractor. Schedule a date with them to come out and review the list with you. Congratulations! Your building construction is completed!

Moving into Your Facility

Assembling and arranging classroom furniture and equipment isn’t something to tackle alone. When deciding what to buy for your daycare center, there’s a lot that goes into the classrooms - educational materials, furniture, and supplies. You can get help by purchasing from a company specializing in daycare equipment and supplies. If you’re unfamiliar with daycare equipment and supply companies, search for “daycare supplies and educational equipment” to get a list of companies to research. There are about four to six big companies that specialize in the daycare market niche. My personal favorites are: Discount School Supply Along with a complete inventory of everything you could possibly need to set up your classrooms for the first time, they offer bundles. I think this idea is genius! Their bundle packages are small groups of items that work together in the classroom. For example, say you want to add a pretend kitchenette to your classroom. Instead of brainstorming what items you wish to include with the kitchenette; pots, pans, spoons…their “Kitchen Helper” bundle shows you a grouping of recommended products. From there, you can decide if you want the whole bundle or just a couple of items from the bundle. Bundling saves you a lot of time and energy having to come up with

detailed lists of every pot, pan, mop, and broom you want to include. With a bundle, you know you’re covered and didn’t forget anything important. Lakeshore Learning I love that they have a gift registry for school supplies. You can register for items you need and want for your classrooms and then encourage parents to purchase gifts for the classrooms at the beginning of the school year and during holidays. Kaplan Early Learning Company Along with a complete inventory of everything you could want to set up your classrooms for the first time, they also have a Floor planner that allows you to draw your classroom floor plan and arrange the furniture to see how everything will fit within the room. Beckers In addition to a full stack of furniture and supplies, they also have helpful articles geared toward owners and teachers. The articles cover subjects like classroom rules and types of learning centers, and parent-teach conference ideas. You’ll find catalogs for daycare center furniture and supplies that are almost like the giant Sears toy catalog but geared just toward daycare owners. The catalogs feature everything you could ever want for a daycare - chairs and tables, rugs, toys, craft supplies, and accessories for each age group and developmental phase of early childhood. Some have free software to draw a floor plan and layout exactly what you’re putting in each classroom. Your purchase choices are arranged by age group, which determines how many kids are in a classroom, and that determines how many tables and chairs you’re going to need. Before starting your purchases, be sure you’re clear on your state’s requirements for the different types of play items you must have in the classroom. For example, when buying dolls, you must have a grouping of multiracial dolls. You’re not allowed to have all-white dolls or all-black dolls. You

have to have a white, an Asian, a black, and a Hispanic doll. That variety is required no matter what your demographics are. There are also rules requiring items for “imagination play.” For instance, dress-up clothes and a mirror, doll houses, miniature kitchens, tool kits, workbenches, etc. This has come about because social scientists and education specialists have determined what is best for early childhood development. These rules and regulations are spelled out in detail. You need to have basic educational toys and wall graphics that are age-appropriate for each classroom. The types of play equipment and toys must be age-appropriate, whether for a one-year-old or a four-year-old. When you are clear on the requirements and what toys and equipment you want, you’re ready to lay out the classroom furniture plan. It’s essential to recognize that there needs to be different activity zones within each classroom - for instance, a messy craft zone, a noisy zone, and a quiet zone. Childcare regulations require you to offer a quiet area because some kids can be overstimulated and need quiet. Some children may not want to be in the noisy “trucks and blocks” section all the time. And they must have the freedom to make that choice for themselves. If you are unfamiliar with these regulations, you can get help from toy or furniture supply companies that offer consultations on classroom furniture layouts.

Receiving your equipment and furniture. Don’t count on having all your equipment and furniture arriving at the exact moment you planned for a month ago. You’ll have to wait for your contractor to give you the thumbs up before you can accept deliveries. You see, once the construction is complete, the building can’t be occupied until the project passes your city’s final building inspection and the Fire Marshall comes through to sign off on the project.

Here’s the problem. Your contractor could have your “final” inspection scheduled for Monday, then fail the inspection. This means the contractor needs to mitigate the failure and then schedule a return visit from the inspector. The contractor needs time to get the right subcontractor to fix the problem. That could take a few days or more to get the repair scheduled and more time to complete the actual fix. After the contractor gets the problem fixed and calls for a follow-up inspection, it can be a few days or weeks before the inspector arrives to do the new inspection and sign off on the fix. That’s why the final completion date is very fluid. It may be scheduled for June 1st, but it could happen anytime between May 15th and June 15th. That creates a big unknown window of time for when the building will be open for you to move the furniture, equipment, and toys. When ordering your furniture, you must schedule the furniture delivery date very far in advance. If you try to reschedule it at the last minute, your delivery may be delayed longer than you want. And that delay could prevent you from moving in even if the construction is completed and you are allowed to move in. This is what I have seen some owners do to meet that challenge. They’ll have a rented storage pod/container dropped off in the building’s parking lot. When the supplies and furniture arrive, everything is stored in the storage container if the building has not yet been approved for occupancy. It’s safe, locked up, and not getting wet. And there it waits for the very first day that you’re allowed to put furniture in. Using a storage pod works well because you don’t get much advance notice of your furniture and equipment delivery. The dilemma is that you’ve likely promised families you’d be open on a certain date, so you find yourself hurrying to move in as quickly as possible. Having the furniture and equipment waiting for you in the container in the parking lot saves precious move-in time and reduces stress on you, the owner, and the people responsible for putting the furniture together and arranging the furniture and play equipment in each classroom.

Temporary Certificate of Occupancy (TCO) In some instances, depending on your city’s building codes, you can ask your general contractor to apply for a Temporary Certificate of Occupancy (TCO). You can often get that up to thirty days before you get your final Certificate of Occupancy, allowing you to move equipment and supplies into the building in the interim. Sometimes the Fire Marshall will require you to put fire extinguishers in every classroom in case something catches fire during that month. But it’s a small price to pay if you’ve gained an extra month of being allowed in the building before construction is officially approved. That month can make a big difference. You can plan about two to four weeks to move everything in and prepare it for the children. Why so long? Moving in all the furniture, toys, and equipment for eight to ten classrooms takes time. Once everything is moved in, those that arrived with “some assembly required” tags will take time to put together. Remember how much time it can take to put one toy together on Christmas Eve? Imagine that times a hundred. And, if you’re providing infant care, you’ll also have cribs to assemble, sheets to wash, and mattresses to unpack. Once everything is unpacked and assembled, it needs to be arranged in the classrooms. It’s a good idea to have already hired some teachers and staff so they can start their employment early enough that they can be instrumental in moving in and setting up the classrooms that they’ll be working in in the future.

Train teachers while outfitting the building. Plan to hire staff with their start date a month before the building is open. Then use the staff as manpower to move the furniture in. It helps the staff learn what equipment and furniture is in the different classrooms. It helps them to get to know each other socially when they are hanging out in a

classroom, putting up bulletin boards and decorating them, and sharing their excitement for their new jobs. Use the staff the first two weeks for moving in. After the classrooms are assembled and kid-ready, and the child care licensing inspection is complete, then use the next two weeks to train the staff in the classroom. All in all, it’s about a month-long process of moving in and training staff. If you currently run a daycare center, you may recruit some employees from your current center and bring them over to your new center. If you have one or two employees who really excel and want to get promoted to the director or assistant director, you can bring someone over who you’re afraid you’ll lose if you don’t promote them. Or you may have a current employee whose home is closer to the new center who would love to move to the new center. If you are hiring new employees, you can temporarily train them at your other school to get them up and running for when the new building opens. Training often takes place in the largest classroom with enough room to set up to serve breakfast and lunch so you can do a full day of training. For daycare centers that are part of a national brand, the training not only covers state-mandated regulations but also includes how your company works versus the previous company a new hire may have worked for. It’s not just how to be a childcare teacher but also includes corporate training specific to your company’s environment and policies. “This is how we do it here,” training. Almost ready . . . now you just need to become daycare-center licensed!

Becoming Licensed

Getting your daycare center licensed can be a frustrating process because each state has its own daycare center regulations. What’s allowed in one state may not be allowed in another. The state assigns a childcare regulations case worker to your location, and it’s up to them and their interpretation of the state regulations as to whether you pass the inspection. The case workers don’t look at your floor plans or approve anything until everything is built and in place. Suppose the case worker discovers that a room has not been properly sized according to their regulations. That can throw a classroom completely out of whack - especially when considering how important your teacher/child ratio figures are to your profit projections. Because there is so much minutia embedded in the regulations, it’s easy to miss a requirement that can cause a lot of scrambling to mitigate. Caseworkers are human and embody human flaws. You have no way of knowing what would be a hot button for a particular representative.

Different inspectors, different issues. Maybe the representative you were assigned at your first location didn’t care that your fencing was spaced four inches apart instead of three and a half inches apart. But this caseworker is a stickler for that. Now, to get credentialed, you’re running around zip-tying tennis court netting around your fence to meet regulations so you can open on time while your fence is being replaced.

It’s stressful for you, the owner, because you’re at the mercy of the license inspectors, and you just don’t know what they’re going to call out or their priorities. This can lead to sleepless nights of second-guessing what the inspectors might come up with. And at this stage of the project, you can’t afford any mistakes. Don’t worry. With a good inspection process in place, you’ll eliminate a lot of worries. You want your business to run smoothly and without worry, but you also know how difficult this can be when faced with uncertainty from license inspectors who may or may not follow regulations as closely or train themselves on new things that come up every day. Of course, they’re supposed to follow regulations. Still, it’s common for someone to be on the lookout for things they think other inspectors get wrong or things they’ve been recently trained on, so each inspector may look for and find different regulation violations. Whatever it is, you have to deal with it. It can be something as simple as not having enough cubbies. There are rules about your cubby spacing to prevent the spread of diseases, like head lice, for instance. Some states require cubbies to be 18 inches apart. In some states, it’s 12 inches apart. The goal is so that when Sally’s jacket gets hooked on the hook next to Johnny’s jacket, the germs and lice are less likely to leap from one jacket to the other. There are a lot of disease-prevention regulations that you need to know about. What’s frustrating is that when you’re ready to open and start recouping your investment through tuition, you’ve got to undergo that inspection at the last minute. It’s rare that they don’t find something that needs to be remedied. They’ll give you a checklist of things to fix. Then when you have them fixed, they will return to inspect for final approval. That can take days to weeks to finalize. Fortunately, this can take place concurrently with staff training. Steps for opening to the public. • •

Outfit the building and all the classrooms. Set up for the children according to childcare regulations.

•

Concurrently train your staff while getting license inspections.

If you get the steps backward, you will waste a couple of weeks (or more) in getting open. Getting this right is crucial when you factor in that you can’t start making money until you’re open. This leaves you very vulnerable at the end of construction when you’ve likely spent your last construction loan dollar on the building and are dipping into your personal savings or current business operating funds while building inspectors, Fire Marshalls, and childcare licensing officials are possibly throwing in a monkey wrench at the last minute! There’s no denying it; things can get a bit stressful at the end. And because most daycares don’t open with full enrollment, if your business plan projected a certain fullness that may not be there, you could be dealing with scanty revenue for the first six to twelve months while you’re ramping up enrollment. That’s why being very serious about launching a robust marketing effort when construction begins is the foundation for full enrollment sooner rather than later.

Profit From the Start

The permitting and construction of an average commercial daycare center typically takes about nine to twelve months. I’ve worked with hundreds of daycare owners over the past decade, and there’s a distinct difference between the daycares that are very successful from day one and the ones that take a year to fill up with enrolled children. The successful daycare owners I’ve seen open with enrolled students on Day One are those who started their marketing efforts as close to the start of construction as possible. With a single-minded goal of having significant enrollment on opening day, they are pretty creative in their marketing and take full advantage of opportunities to make their presence known everywhere young families hang out.

Jumpstart your website design. You want your website ready for activation and your marketing plan ready to go the moment you have your building permit and have secured your construction loan. Why? Because it takes time to get clear on what you want your website to look like and decide what words you want on your web pages about the services you provide. Your website designer is responsible for how the website looks and functions. The website designer will look to you for the words regarding what to say on the web pages. If you are not writing the webpage content

yourself, your website designer can likely refer you to a professional copywriter to do it for you. It can easily take four to six months to get your website designed, the copy written, and be ready for “showtime” the day you start your marketing. If you have a blog or plan to post articles, you can also take this time to get a few of them in the pipeline. They can feature what’s unique about your daycare versus other daycares. Are you Montessori? Are you vegan? Are you play-based? Are you homestyle? Are you Reggio Emilia or Waldorf based? Are you a gardening daycare where the students spend most of their time each day outside in a little vegetable garden all year round? There are many daycare styles out there. What do you want to say about your services that sets your daycare center apart from others in your area? Another critical reason to get your website up and running while building design and construction is in progress is that Google doesn’t recognize websites on Day One. It can take months. Being as many as six months out from being moved into your building is not too soon to get your website up and running to support your pre-enrollment marketing. Lastly, if you don’t already have social media accounts set up, you’ll use this time to do that too. From your social media accounts, you’ll direct people to your website to drum up digital interest and digital word of mouth. Get your mailbox installed on the property at the beginning of construction When someone does a Google search for “daycare near me,” your website won’t show up in the results unless Google knows your location address. It takes time for Google to get your property address up and running. First, Google sends you a postcard to validate the address. If you don’t have a mailbox on site, you won’t get the postcard with the Google code that you must enter into your Google account to get recognized on Google Maps. Be prepared for contractor resistance to your request that he install a mailbox at the beginning of construction. Some excuses are that the mailbox will get in the way, and somebody might knock it down. They may point out the

uselessness (to them) of having a mailbox on the property before construction is completed by asking, “What kind of mail are you going to get anyway?” Don’t let yourself be talked out of having a mailbox installed, even if it’s a cheap temporary one from the local hardware store. Having your building’s location recognized by Google Maps is vital to a robust marketing plan. Be prepared to educate the contractor on the importance of being recognized by Google Maps when you request the contractor to install a mailbox on site, and don’t take no for an answer. Remember, you are the boss, and this mailbox is vital to your marketing efforts.

The Coming Soon sign. While you’re doing face-to-face pre-enrollment marketing, your construction site is simultaneously a curiosity for people who drive by your location. Be prepared to satisfy that curiosity with a coming soon sign. Contact the sign department of your city’s building department. They can tell you how long you can have a temporary coming soon sign up at the construction site telling people what business is being built there. Many jurisdictions will limit the amount of time you can have a coming soon sign on display. It could be as few as thirty days or as long as four or five months. When you know how long you’re allowed to have you’re coming soon sign up, then back into that from when you think construction will be complete. For example, say you’re expecting to have construction finished in June, and you’re coming soon sign is allowed to be up for four months. You’d plan to put your coming soon sign up four months prior, which is February. Be sure to get clear instructions on the allowed sign size and make it as big as it’s allowed to be! Get your coming soon sign made. Contact a signage company and organize with them the graphics and information you want on the sign. The essential information includes your website address and the contact phone number. It’s important to order the

biggest sign allowed and specify plain fonts in large type that are easy to read from a distance so that people driving by can take note of the web address and the phone number. If allowed, you may also want to have a “Take One” clear plastic box on a post at the mailbox and keep it supplied with advertising fliers. Print marketing literature about the school and how to pre-enroll during construction, Get your marketing materials designed by a graphic designer and the content written with a focus on what results the child and parents will get from enrolling in your school.

Market at elementary schools. Elementary schools have periodic fairs and festivals that are ideal venues for marketing your daycare center. Begin by contacting local elementary schools and asking about their social events for the year. Plan to register as a vendor at each of the events. Put up a tent and lay out marketing materials and free branded toys on a table to hand out to attendees and their kids. The idea is to enroll children before the building is finished. Your marketing can be considered successful if you have 20% enrollment on Day One. However, it is possible to have 50% enrollment on Day One! Though that’s not typical, I have seen it happen when the marketing was single-minded, and a major effort was made during construction. Enrollment takes time because families looking for daycare are not making decisions lightly. It’s a big decision to pull a two-year-old out of their existing classroom and put the child into a different school. That is a pretty traumatic event for a two-year-old. This is a decision that is planned months in advance, so you need to do your marketing months in advance. Families that are unhappy with their current daycare won’t switch in the middle of the year. They may switch over for summer camp, or they may switch over at the first of the year. One exception is if something very traumatic is going on that makes them absolutely hate where they are. In that

case, they’ll make the switch as soon as they can find a better situation. A few other exceptions are if Mom has to suddenly go back to work or if they are new to the area and the other quality daycare schools are already full and can’t take them. It’s not unheard of for a family to know in March that they’re unhappy enough with their daycare plan that they’ll plan for somebody in the family to take the summer off to be with the child and then switch schools at the beginning of the following year. As a family, they’ll know in March what their daycare plan will be at the beginning of the following year. That’s why having a long marketing timeline during construction is beneficial to set yourself up for success.

Marketing after you’re open. If you’ve been diligent in your pre-opening enrollment marketing, you’ll have plenty of students enrolled on Day One. Now is the time for “show and tell” to your community of interested parents. Touring a daycare is a big tradition to let a family see where their child would spend the day, all day, every day. Family touring is an excellent way to drum up excitement in the community. Touring families starts the minute you’re allowed to let the public in the door. If a family wants to see inside, it doesn’t matter if you’re still unpacking boxes and furniture. If you have an interested family that wants to tour the school, be sure to welcome them in. An innovative way to tour families is to create a video tour. You can do this by turning your mobile phone horizontally and walking slowly through the front door and into a couple of classrooms while videoing. Set this video up with a link that you can share via email and share it with anyone and everyone who might be interested. Also, publicly post it on your Google listing, your website, your social media, and YouTube. You can be as basic as describing each room as you walk through your

center, or as elaborate as having a video editor include fun music in the background. You’ll get more noticed than your competitors by having any video, even the most casual and basic style. Host a Grand opening party! It’s essential to reach out to your local Chamber of Commerce and local newspaper within the first 30 days to notify them of your business opening and to publish a grand opening party date and time. The party is usually just a half day, and the general public is invited to come and tour. There are balloons and activities for kids and families. It’s a great way to get featured in the local newspaper and Chamber of Commerce’s website. This is another effective way to spread the word within your community, and get noticed. If you are a local Chamber of Commerce member and invite them to your daycare center on the day of the grand opening party, they will happily perform a ribbon-cutting ceremony. They’ll publish the event in the Chamber of Commerce newsletter. Likely, the local newspaper will attend and take photographs. Even if the photos don’t make it into the newspaper print version, they’ll likely be posted online. With your marketing system in place, plan to repeat those same efforts year in and year out - going to the elementary schools, community festivals, and farmers markets and maintaining your online presence by posting on social media to sustain your word-of-mouth momentum. It usually takes about a year for a daycare to reach full capacity, which for daycare is categorized as over 80% of the daycare capacity. Some daycares are at 100% capacity with a waiting list. No doubt about it, as a daycare owner, that’s a great place to be. But the average is 80%. If you have a classroom that holds twenty kids, that classroom is considered full when you have sixteen kids. Congratulations! Your school is open, your marketing is running like clockwork, and you’re the proud owner of a thriving and successful business.

Let me be the first to congratulate you!

Thanks for Reading! Please add a review on Amazon to let me know what you thought!

Amazon reviews are extremely helpful for authors; thank you for supporting me and my work. Don’t forget to share this book on social media to share the knowledge with other childcare owners who would like to read the book as well.

Conclusion

When you build a daycare for the first time, it can be scary. Everything costs so much and takes so much time, and you have to make all those big decisions seemingly alone. You’ve never done it before, so you must learn everything from scratch. A mistake with a seemingly minor decision can cascade into a loss of significant time and money. But do it once, and you’ll know this process. Yes, it’s lengthy but oh so profitable! Once you have this first success under your belt, you’ll keep doing it because you’ll know that you can. It gets easier every time you build a new daycare; owners with multiple locations are usually multimillionaires. Daycare owners who learned how to build a building and run it profitably tend to get one going, pay it off, do another, and then another. And it takes just owning one location to become a millionaire. You may be surprised to know that a survey of daycare owners who built their first building revealed that 30% of them turned around and built a second, a third, or more daycares. Many of the companies are not big national brands. They’re just quality daycare owners who have learned the business and grown into mini empires.

Why I wrote this book I’ll admit that building your first daycare center can be pretty daunting. There are many steps to take and hoops to jump through. As an architect, when I saw my clients stumbling through the decision-making process, I’d do my best to counsel them along the way. But it soon became clear there was

no way I could sit down one-on-one with every client and explain the pros and cons of every single decision. My solution was to do two things. First, write this book to outline the process and the pitfalls to avoid. Secondly, create a series of in-depth video courses that are the next best thing to face-to-face meetings throughout the process. You can find these courses at www.courses.saveonbuilding.com and additional resources on the following resource page of this book. All my best wishes for your future success!

Rebecca Calbert, Atlanta, Georgia [email protected]

Resources

My Curated List of Resources for You . . . Please don’t stop your search for knowledge after finishing this book! Keep learning . . .

Business Planning Guide: www.bplans.com Property Comparison Worksheet: www.courses.saveonbuilding.com/courses/free-resources Daycare Project Cost Report: www.courses.saveonbuilding.com/courses/free-resources Supplemental Articles: www.saveonbuilding.com/blog In-Depth Video courses: www.courses.saveonbuilding.com YouTube Channel: “Rebecca_Save on Building”