Table of Content

    Do you want to start babysitting business plan?

    Are you thinking about starting a new business? Well, if you are living in a city comprising mostly the working class, you should opt for the babysitting business. It is undoubtedly a business with extremely low startup costs, yet producing a profound profit. Around 4 million babies are born each year in the United States, those newborn as well as growing and the preteens need continuous attention every second which is not affordable by every parent, this is what makes this venture profitable.

    Before taking a startup, you have to organize and plan every aspect of this business in your business plan. We are here to help you by providing a sample business plan on how to start a babysitting business for a babysitting business startup named, ‘Watch ‘n Care’.

    Executive Summary

    2.1 The Business

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    Watch ‘n Care will be an American babysitter company located in Detroit. The company will be fully insured and CPR certified based on providing your children with customized care temporarily.

    The business will be owned by Steve Carell, who has been teaching management sciences since the last seven years. Steve has decided to run the babysitter business side-by-side, the details of which are provided here if you want to know how to start babysitting business.

    2.2 Management

    After establishing the official website and hiring the services of at least ten babysitters, the company will launch its office in Detroit at a 15-minute drive from Midtown Detroit.

    Steve will hire a general manager and a team of babysitters to help him through the process ensuring the smooth running of business 24-hours a day.

    2.3 Customers

    The company aims to serve the residential community of Detroit. Our customers will be the parents belonging to working class and single parents who can’t attend to their children all the time.

    2.4 Target of the Company

    The company aims to establish the most trustee, reliable and famous babysitting business; servicing in the whole Detroit within the 5 years of the launch.

    3 Years Profit Forecast - Babysitting Business Plan Template

    Company Summary

    3.1 Company Owner

    Steve Carell has a post graduate degree in management sciences and he has been teaching this course in the University of Detroit Mercy for seven years. Steve is a widower with 2 children.

    3.2 Why the Business is being started

    Steve has been teaching for seven years, now to practice what he has explored he is going to open up a new business, besides his current job.

    By assessing the difficulty, he himself has, while taking care of his 2 children and the difficulty faced by his colleagues and friends in taking care of their kids while being on work, Steve had got the idea to start a babysitting business. The business does not only match his interests, but is also compatible with his available resources.

    3.3 How the Business will be started

    After obtaining necessary permits and licenses, a building will be procured near the Midtown Detroit to establish it as the company’s main office. The company will hire the services of a general manager to manage the business with Steve. Babysitters certified in child and infant CPR will be hired and trained for the whole one month before the launch.

    Steve has decided to advertise his services before one month of the launch of his business. Company’s website will not only be used for the feedback purposes but also for online bookings and payments. Further follow this sample business plan to know how to start a babysitting service successfully.

    The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by financial expert hired by Steve, is given below:

    Startup Cost -Babysitting Business Plan Template

    Start-up Expenses  
    Legal $55,300
    Consultants $0
    Insurance $32,750
    Rent $32,500
    Research and Development $32,750
    Expensed Equipment $32,750
    Signs $1,250
    Start-up Assets $0
    Cash Required $332,500
    Start-up Inventory $32,625
    Other Current Assets $232,500
    Long-term Assets $235,000
    TOTAL ASSETS $121,875
    Total Requirements $245,000
    START-UP FUNDING $273,125
    Start-up Expenses to Fund $11,875
    Start-up Assets to Fund $15,000
    Assets $23,125
    Non-cash Assets from Start-up $18,750
    Cash Requirements from Start-up $0
    Additional Cash Raised $18,750
    Cash Balance on Starting Date $21,875
    Liabilities and Capital $0
    Liabilities $0
    Current Borrowing $0
    Long-term Liabilities $0
    Accounts Payable (Outstanding Bills) $0
    Other Current Liabilities (interest-free) $0
    Capital $0
    Planned Investment $0
    Investor 1 $332,500
    Investor 2 $0
    Other $0
    Additional Investment Requirement $0
    Loss at Start-up (Start-up Expenses) $313,125
    TOTAL CAPITAL $251,875
    Total Funding $255,000

    Services for customers

    In your babysitting business plan you must clearly mention the services you want to provide and the way you are going to provide them, before you actually start a babysitting business strategy services.

    You can take hint from the services provided by Watch ‘n Care written here:

    • General caregiving: Our well trained babysitters will take care of your kids aged till 10 whenever you call us, evening, morning or at night. General caregiving will include giving food to kids, playing and spending time with them, make them learn something while following their parent’s instructions.
    • Services for specific needs: In case, your kid is ill or physically or mentally upset, our babysitters will take care of them for the time when you are unable to attend to your children.
    • Long term caregiving: If you need long term assistance with your children, our babysitters will be available to you for one week.
    • Hotel & Holiday childcare: You can contact us freely whether you want our services in your home, or some hotel or amusement place. Our babysitters will also be available to you when you are taking your kids on holidays or some event.

    Marketing Analysis of Babysitting Business

    If you are starting a babysitting business, the most important factor that will mark the success or failure of your startup will be your marketing plan. Before you launch your startup it is essential to devise a thorough business plan focused mainly on your marketing policies.

    An effective marketing plan include critical analysis of the market trends around you, understanding of the demands of your target customers and regulating the prices of your services with your financial targets.

    So, if you are pondering on how to start your own babysitting service, then it is advisable to make a babysitting schedule template incorporating all the details of your startup and details about how you are going to cater the market demands with your available resources. You can take help from this sample business plan in case you are looking for how to start your own babysitting business.

    5.1 Market Trends

    Before starting a babysitting service  analyze the market in which you are going to invest your money and time. You must be a realist in analyzing whether the market has place for your startup or not.

    But you need not to worry as babysitting services are in great demand and will always be; in a big and busy city. According to IBISWorld, the businesses of daycare centers and its type are growing with the rate of 3.2% annually generating a revenue of $53 billion as per year.

    As parents belonging to the working class or having children with some disabilities often need a temporary assistance with their children so there is a very few chance of your startup to end as a failure if you are entering this venture.

    5.2 Marketing Segmentation

    The success of a startup depends upon how well do you know your customers and their demands, in order to gain and maintain more and more customers it is essential to divide them in segments and focus on the demand of each segment separately.

    The detailed marketing segmentation of our target audience is as follows:

    Babysitting Business Plan Template - Marketing Segmentation

    5.2.1 Working Parents

    Our biggest customers will be the parents in which both the partners are earning at the same time. Parents who don’t want to leave their children in some daycare center, while going to some event for some time, just need a temporary yet trustee babysitter to take care of their children in the home for a few hours.

    As parents prefer the babysitter who know how to have fun with kids while regulating all the rules and can also cater medical emergencies, therefore we’ve adopted different means to train our babysitters.

    5.2.2 Single Parents

    Single men or women who need assistance of a babysitter to take care of their children while they are busy in the household chores or while they are out of the house, will be our second target group.

    5.2.3 Parents of children with disabilities or illness

    Parents whose children are slow in learning or have some kind of illness often need someone to take care of the child at the child’s familiar place i.e. his/her home for a few hours will also be our target customers.

    The detailed market analysis of our potential customers is given in the following table:

    Market Analysis
    Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
    Working parents 32% 11,433 13,344 16,553 18,745 20,545 13.43%
    Single Parents 48% 22,334 32,344 43,665 52,544 66,432 10.00%
    Parents of disabled children 20% 12,867 14,433 15,999 17,565 19,131 15.32%
    Total 100% 46,634 60,121 76,217 88,854 106,108 9.54%

    5.3 Business Target

    Our aim is to establish the best and most reliable babysitting business and to get recognized with a huge crowd of customers around us.

    Our main business targets to be achieved over the course of next three years are to achieve the net profit margin of $25k per month by the end of the first year and to balance the initial cost of the startup with earned profits by the end of three years.

    5.4 Product Pricing

    Steve has neither compromised over quality nor on prices. Our prices are reasonable, they are slightly higher than those of our competitors due to our highly trained, insured and CPR certified staff, and our 24-hour availability.


    If you are thinking about how to start my own babysitting business, then do focus on your strategy which you will need to adopt to let your target customers know about you, all your investments will be a waste if you fail to attract your target customers.

    This business doesn’t even require a separate place or office, it can also be started and managed from home, as the only thing you will have to do is to provide your customers with a babysitter timely. This business plan is equally beneficial for you if you want to know that how to start babysitting business in your home.

    The sales strategy developed by Steve is as follows:

    6.1 Competitive Analysis

    Although we have a lot of competitors in our vicinity yet we have come up with several preparations that others lack. Our biggest competitive advantage lies in the service of our highly trained staff. Our workers will be there for you to handle your children whenever and wherever you want. Our workers know how to have fun with kids while still reinforcing rules.

    Secondly, we greatly value our customer, we have created an online payment system with the facility of giving feedback to us, so that you can know the views of our customers about us.

    6.2 Sales Strategy

    Our experts have come up with the following brilliant ideas to advertise ourselves.

    • We will carry out a large-scale social media campaign for our advertisement
    • We will allow our customers to give us feedback on our website or Facebook page. Customers can also pay online
    • We will carry out seminars to emphasize the importance of trained and insured babysitters

    6.3 Sales Monthly

    Sales Monthly - Babysitting Business Plan Template

    6.4 Sales Yearly

    Sales Yearly - Babysitting Business Plan Template

    6.5 Sales Forecast

    Babysitting Business Plan Template - Unit Sales

    Sales Forecast      
    Unit Sales Year 1 Year 2 Year 3
    General caregiving 1,887,030 2,680,320 2,588,240
    Services for specific needs 802,370 815,430 823,540
    Long-term caregiving 539,320 770230 1,002,310
    Hotel & Holiday childcare 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 3
    General caregiving $140.00 $150.00 $160.00
    Services for specific needs $600.00 $800.00 $1,000.00
    Long-term caregiving $700.00 $800.00 $900.00
    Hotel & Holiday childcare $650.00 $750.00 $850.00
    General caregiving $2,149,800 $2,784,000 $3,383,200
    Services for specific needs $120,050 $194,500 $268,500
    Long-term caregiving $50,110 $71,600 $93,000
    Hotel & Holiday childcare $139,350 $194,600 $249,850
    Direct Unit Costs Year 1 Year 2 Year 3
    General caregiving $0.70 $0.80 $0.90
    Services for specific needs $0.40 $0.45 $0.50
    Long-term caregiving $0.30 $0.35 $0.40
    Hotel & Holiday childcare $3.00 $3.50 $4.00
    Direct Cost of Sales
    General caregiving $989,300 $1,839,000 $2,679,700
    Services for specific needs $66,600 $119,900 $173,200
    Long-term caregiving $17,900 $35,000 $52,100
    Hotel & Holiday childcare $19,400 $67,600 $115,800
    Subtotal Direct Cost of Sales $1,294,100 $1,699,400 $2,104,700

    Personnel plan

    In babysitting business, the problem is not how to get started babysitting, the actual problem is to find the best team, as this business will be sole dependent upon the skill of your babysitters, so you have to select employees by rigorous testing and train them for every possible situation.

    7.1 Company Staff

    The company will initially hire following people:

    • 1 General Manager to manage the operations with Steve
    • 1 Accountant to manage financial records
    • 2 Sales and Marketing Executives responsible for making deals with customers and timely sending the babysitters
    • 15 Employees to act as babysitters
    • 4 Drivers for quick transportation
    • 1 IT Expert to manage the company’s website

    7.2 Average Salary of Employees

     Personnel Plan      
    Year 1 Year 2 Year 3
    General Manager $85,000 $95,000 $105,000
    Accountant $45,000 $50,000 $55,000
    Babysitting Employees $550,000 $650,000 $750,000
    Sales and Marketing Executives $145,000 $152,000 $159,000
    Drivers $187,000 $194,000 $201,000
    IT Expert $42,000 $45,000 $48,000
    Total Salaries $1,054,000 $1,186,000 $1,318,000

    Financial Plan

    If you are going to start this business, the thing in which you might be most interested in is how to make money babysitting. To make sure that you can manage your startup costs with the profits earned, you must make a profound financial plan.

    Before thinking about how to set up a babysitting business, you must have a complete calculation of how much you can spend on the startup. If you are starting a babysitting business from home you will be saving your finances but you will need much more planning to manage all the operations by yourself.

    Steve will be operating this business side-by-side his present job, so he has decided to start it properly by launching his office. He himself has developed the financial plan for his business given here, it will surely give you a rough idea of finances, whether you are starting your business from home or an office.

    8.1 Important Assumptions

     General Assumptions      
    Year 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0


    8.2 Brake-even Analysis

    Babysitting Business Plan Template - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    Monthly Revenue Break-even $159,740
    Average Per-Unit Revenue $260.87
    Average Per-Unit Variable Cost $0.89
    Estimated Monthly Fixed Cost $196,410

    8.3 Projected Profit and Loss

     Pro Forma Profit And Loss      
    Year 1 Year 2 Year 3
    Sales $309,069 $385,934 $462,799
    Direct Cost of Sales $15,100 $19,153 $23,206
    Other $0 $0 $0
    TOTAL COST OF SALES $15,100 $19,153 $23,206
    Gross Margin $293,969 $366,781 $439,593
    Gross Margin % 94.98% 94.72% 94.46%
    Payroll $138,036 $162,898 $187,760
    Sales and Marketing and Other Expenses $1,850 $2,000 $2,150
    Depreciation $2,070 $2,070 $2,070
    Leased Equipment $0 $0 $0
    Utilities $4,000 $4,250 $4,500
    Insurance $1,800 $1,800 $1,800
    Rent $6,500 $7,000 $7,500
    Payroll Taxes $34,510 $40,726 $46,942
    Other $0 $0 $0
    Total Operating Expenses $188,766 $220,744 $252,722
    Profit Before Interest and Taxes $105,205 $146,040 $186,875
    EBITDA $107,275 $148,110 $188,945
    Interest Expense $0 $0 $0
    Taxes Incurred $26,838 $37,315 $47,792
    Net Profit $78,367 $108,725 $139,083
    Net Profit/Sales 30.00% 39.32% 48.64%

    8.3.1 Profit Monthly

    Babysitting Business Plan Template - Profit Monthly

    8.3.2 Profit Yearly

    Babysitting Business Plan Template - Profit Yearly

    8.3.3 Gross Margin Monthly

    Babysitting Business Plan Template - Gross Margin Monthly

    8.3.4 Gross Margin Yearly

    Babysitting Business Plan Template - Gross Margin Yearly

    8.4 Projected Cash Flow

    Projected Cash Flow - Babysitting Business Plan Template

     Pro Forma Cash Flow      
    Cash Received Year 1 Year 2 Year 3
    Cash from Operations
    Cash Sales $40,124 $45,046 $50,068
    Cash from Receivables $7,023 $8,610 $9,297
    SUBTOTAL CASH FROM OPERATIONS $47,143 $53,651 $59,359
    Additional Cash Received
    Sales Tax, VAT, HST/GST Received $0 $0 $0
    New Current Borrowing $0 $0 $0
    New Other Liabilities (interest-free) $0 $0 $0
    New Long-term Liabilities $0 $0 $0
    Sales of Other Current Assets $0 $0 $0
    Sales of Long-term Assets $0 $0 $0
    New Investment Received $0 $0 $0
    SUBTOTAL CASH RECEIVED $47,143 $53,651 $55,359
    Expenditures Year 1 Year 2 Year 3
    Expenditures from Operations
    Cash Spending $21,647 $24,204 $26,951
    Bill Payments $13,539 $15,385 $170,631
    SUBTOTAL SPENT ON OPERATIONS $35,296 $39,549 $43,582
    Additional Cash Spent
    Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
    Principal Repayment of Current Borrowing $0 $0 $0
    Other Liabilities Principal Repayment $0 $0 $0
    Long-term Liabilities Principal Repayment $0 $0 $0
    Purchase Other Current Assets $0 $0 $0
    Purchase Long-term Assets $0 $0 $0
    Dividends $0 $0 $0
    SUBTOTAL CASH SPENT $35,296 $35,489 $43,882
    Net Cash Flow $11,551 $13,167 $15,683
    Cash Balance $21,823 $22,381 $28,239

    8.5 Projected Balance Sheet

     Pro Forma Balance Sheet      
    Assets Year 1 Year 2 Year 3
    Current Assets
    Cash $184,666 $218,525 $252,384
    Accounts Receivable $12,613 $14,493 $16,373
    Inventory $2,980 $3,450 $3,920
    Other Current Assets $1,000 $1,000 $1,000
    TOTAL CURRENT ASSETS $201,259 $237,468 $273,677
    Long-term Assets
    Long-term Assets $10,000 $10,000 $10,000
    Accumulated Depreciation $12,420 $14,490 $16,560
    TOTAL LONG-TERM ASSETS $980 $610 $240
    TOTAL ASSETS $198,839 $232,978 $267,117
    Liabilities and Capital Year 1 Year 2 Year 3
    Current Liabilities
    Accounts Payable $9,482 $10,792 $12,102
    Current Borrowing $0 $0 $0
    Other Current Liabilities $0 $0 $0
    SUBTOTAL CURRENT LIABILITIES $9,482 $10,792 $12,102
    Long-term Liabilities $0 $0 $0
    TOTAL LIABILITIES $9,482 $10,792 $12,102
    Paid-in Capital $30,000 $30,000 $30,000
    Retained Earnings $48,651 $72,636 $96,621
    Earnings $100,709 $119,555 $138,401
    TOTAL CAPITAL $189,360 $222,190 $255,020
    TOTAL LIABILITIES AND CAPITAL $198,839 $232,978 $267,117
    Net Worth $182,060 $226,240 $270,420


    8.6 Business Ratios

     Ratio Analysis        
    Year 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets 4.35% 4.71% 5.80%  9.80%
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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