Find Investors for Your Day Care

With a large number of two-income families, day care is a growing business. Although a day care business must meet many legal requirements, it can turn into a profitable career. But it takes money to get this kind of business running. If you have the idea, but not the finances, consider taking on investors for your new day care business.

Research the day care business, and learn all the requirements you will need to meet to legally run a day care center in your town and state. Visit established child care centers. Read "How to Start a Quality Child Care Business" by the U.S. Small Business Administration. Investors will want to have confidence in your knowledge of the industry.

Then, write a well-crafted and thorough five-year-business plan. Potential investors will want to know every single detail about the business before committing the big bucks. Include information on management, legal requirements, services to be offered, operations, marketing, possible competition and a complete financial overview. Include how you plan to grow the business, such as eventually offering tutoring, in-home babysitting or holiday hours. Spend all the time you need to write the plan. It's your one chance to make an outstanding first impression.

Network for your investors. Start with your banker, because he will probably know people who are looking for commercial investments. Attorneys and financial advisers are also good sources. Contact your local Chamber of Commerce, where bringing new business into town is the name of the game. Other sources might be pediatricians, educators and toy stores. Don't rule out family and friends, either, but realize this option can bring its own emotional difficulties as you go forward with your business.

You can also look outside your community. The National Venture Capital Association (NVCA) produces an annual directory that lists hundreds of venture capital firms. The listings include names, contact information and other details to help you locate the best investors. The NVCA can also put you in touch with investors who are specifically looking for investment opportunities centered around children.

Don't fail to hire an attorney to write up a nondisclosure agreement. Have potential investors sign it before you get too far in talks about the day care business. With a nondisclosure agreement, you will known everything is kept confidential. This is an industry standard in the world of venture capital. Even if you're just looking at close friends as investors, don't skip this step.

Keep your investors informed as you get the child care business off the ground. Since they're putting up the initial cash, they have the right to know all the details of the business. Let them know they are welcome at the day care any time.