How Should a Preschool Fund Its Summer Costs?

The StartFigures two-classroom preschool needs $59,400 reserved for its two closed summer months under the selected compensation and lease policy. It charges $13,500 per enrolled child for the school year, collected in ten assumed $1,350 installments. At 36 enrolled children, ten teaching months produce $150,120 of simplified operating cash before the summer draw; after summer, the annual operating result is $90,720.

That reserve is a cost schedule, not a national benchmark. The case pays annual classroom contracts across twelve months and keeps director compensation, substitute allowance, rent and overhead funded throughout the year. A school that pays contracts differently needs a different dated cash schedule.

The modeled program serves ages 3–5, before kindergarten, from 9am–3pm on school-year weekdays. It has two classrooms and a forty-place planning ceiling, subject to actual approval. No infant care, extended-hours care, transport, summer camp, registration fee or grant revenue rescues the calculation.

Start with the annual family obligation

Annual tuition describes the contracted program. An installment describes when money is due. Neither is the same as a child's attendance on one day, and a deposit applied to tuition is not additional revenue.

Current provider examples show why these distinctions matter. Sandy Ridge Academy in Gaithersburg posts $1,010 per month for five days, 9am–3pm, in 2026–2027; its page also lists a separate $100 school-year registration fee. That page does not establish the number of tuition months or this case's contract. Sandy Ridge tuition.

Bryant Woods Montessori in Columbia posts $16,640 annual tuition for five days, 8:30am–3:30pm: a $1,664 enrollment deposit plus nine $1,664 payments from September through May. Those ten payments reconcile to the annual amount; adding the deposit again would overstate receipts. Its hours, educational approach, fees and agreement differ from the StartFigures scenario. Bryant Woods tuition schedule.

The selected $13,500 price is a planning assumption. It is not an average of those schools, a verified local offer or proof that 36 families will accept it. Compare the entire household need: a lower school-day price can still require separate early, late or summer care.

Pay the full teaching commitment

The case funds two teachers and two assistants for 35 paid hours per week across 42 paid weeks. The assumed 180 teaching days make 36 teaching weeks; six additional paid weeks cover preparation, training or leave. The six-hour child day does not consume all paid time.

Each teacher earns an assumed $28 per paid hour and each assistant $22. A $25 equal-hours blend works in the shared classroom payroll preset, but the role roster must retain the actual rates and qualifications. Director and substitute compensation sit outside that classroom-only preset.

BLS reports May 2025 national median pay of $38,140 for preschool teachers and $59,300 for preschool and childcare center directors. These figures provide occupation context; they do not establish local recruitment rates, credentials, weekly schedules or the full employer cost. Preschool teachers, center directors.

IRS Publication 15 sets 2026 employer Social Security at 6.2% up to the wage base and employer Medicare at 1.45%. The scenario's 20% total employer allowance also contains selected unemployment, workers' compensation and benefit costs. It is not an IRS rate or a BLS benefits estimate. IRS Employer's Tax Guide.

The owner/director remains an active paid role. The roster needs qualified room cover during breaks, staff illness and family meetings, plus a costed replacement for director absence. An allowance alone does not appoint an available qualified substitute.

Check the place ceiling before solving break-even

Under the current Maryland ordinary mixed-age preschool center example, a group containing children age three or older has a one-to-ten staff ratio and a twenty-child group ceiling. Two such groups can therefore illustrate forty places and four classroom staff when fully occupied. The same regulation has separate rules for approved educational programs; the case does not assume that approval. These are Maryland examples, not national ratios or this premises' license. COMAR group size and staffing.

Maryland's ordinary indoor requirement of 35 eligible square feet per child implies 1,400 eligible activity square feet for forty places. Excluded support areas mean the gross lease must be larger. For a new center above twenty approved places, its outdoor rule requires 75 eligible square feet for half the capacity, implying 1,500 eligible outdoor square feet in this example. Actual site approval, safe access and supervision still control. Indoor space, outdoor activity area.

An adverse price case cannot be solved by selling places beyond the approved ceiling. Obtain written site findings and a real staffing schedule before interpreting any forty-place upside.

Calculate enrolled-place operating break-even

Annual payroll of $260,400 plus $96,000 of year-round overhead creates $356,400 of fixed operating cost. The overhead assumes $60,000 rent, $12,000 utilities and four $6,000 allowances for insurance, maintenance/cleaning, software/administration and family outreach. These amounts are selected budgets, not local quotes.

The case assigns 8% of tuition to snacks, learning consumables and collection costs, leaving 92% contribution before fixed costs. One enrolled place contributes $13,500 × 92% = $12,420 annually.

$356,400 ÷ $13,500 ÷ 92% = 28.70 places, rounded upward to 29 whole enrolled places. That is operating coverage under the assumptions, before depreciation, interest, income tax, replacement spending and distributions.

The $1,010 sensitivity uses the posted comparison price with this case's hypothetical ten-month calendar. It does not reproduce Sandy Ridge's financial results or contract. Fixed costs and the 92% contribution rate stay unchanged, so this is a bounded sensitivity, not a probability or prediction.

Public alternatives also matter. Anne Arundel County posts $495 per month for South County Recreation Center pre-K, ages 3–5, Monday–Friday 9am–3pm, for 2026–2027. Eligibility, availability and funding differ from a private school; that price is a reason to investigate substitutes, not a private-operator cost benchmark. County fee schedule.

Protect the summer obligation

For the mature 36-place roster, each of ten tuition months brings $48,600. After 8% direct costs and $29,700 of monthly fixed cost, the simplified school-month operating cash is $15,012. Two summer months each consume $29,700 without tuition receipts.

The table assumes ten equal installments, collection on time, no discounts/refunds and annual staff compensation distributed across twelve payments. It excludes opening outlays, deposit obligations, financing, tax and equipment replacement. It is not a cash statement for an actual school.

Allocate $5,940 from each of ten school-month receipts to build the $59,400 closed-month reserve. Keep reopening purchases, repairs and any additional contractual obligations separately funded. A next-year tuition deposit may arrive in summer, but its service and refund terms determine whether it can safely cover a prior year's obligations.

Test the opening-year calendar and reserve once

The authored first year averages 24 enrolled children across ten tuition months. A selected September–June roster of 18, 20, 21, 22, 24, 25, 26, 27, 28 and 29 illustrates that average; it is not a measured admissions path. This opening-year example bills $1,350 for each active enrolled school-month and assumes prorated late starts; actual entry, withdrawal and refund terms require a written agreement. The ten teaching months together produce only $1,080 of operating cash after the full fixed cost base. Summer then brings the annual operating loss to $58,320.

The $280,000 opening allocation contains a $105,000 operating cash reserve. That first-year operating loss would leave $46,680 before other unmodeled cash uses. No separate spendable site contingency is assumed; an opening overrun reduces this available reserve and requires a refreshed funding plan. The annual loss already includes the summer draw: adding another $59,400 would count the same obligation twice.

With first-year revenue 10% lower and the same contribution and fixed costs, the annual operating loss becomes $88,128, leaving $16,872 of that reserve. Collection delays, refunds or an opening overrun could consume the remainder. This downside is analyst-selected and has no assigned probability.

Read the website's daily figure as an annual bridge

The shared calculator uses five reference days × 4.33 weeks × twelve months = 259.8 reference days annually. Dividing $13,500 annual tuition by that reference produces $51.963 per enrolled child per reference day. At 36 places, it normalizes annual revenue to $486,000 and monthly revenue to $40,500.

The actual calendar assumes 180 teaching days. Neither $51.963 nor 259.8 describes daily billing or attendance. The literal recurring revenue engine is available places by group × occupancy × monthly tuition, with separately supported extras; extras are zero in this case.

The separate smooth sensitivity begins at eighteen place-equivalents and adds one per month until reaching thirty-six in month nineteen. It first clears the normalized operating threshold in month twelve. If month one is September, month twelve is a closed August: the threshold is not an August cash-profit claim.

Both paths use the same annual tuition, contribution and full cost base through year three. Their enrollment timing differs; the smooth path has no actual summer collections gap. It reaches a peak cumulative operating deficit of $64,845 at the end of month eleven, leaving $40,155 against the same reserve before other uses. Do not add this alternative-path deficit to the school-calendar loss.

Years four and five of the school-year forecast use 38 and 40 occupied places, ten-month fees of $1,390 and $1,430, and approximately 3% annual payroll/overhead growth. Their revenue is $528,200 and $572,000; operating results are $118,852 and $148,136. Growth never exceeds the planning ceiling and is not evidence that actual admissions will fill it.

Make the next decision from a specific site and family offer

Before an unconditional lease, obtain written site and likely capacity findings, coordinated bids and a qualified teaching/director cover roster. Put the annual family agreement, teaching days, invoice dates, deposit/refund treatment and staff-payment commitments on one dated calendar.

Then test this exact school-day offer with suitable local families. Track inquiries, tours, signed agreements, collected installments and occupied places separately, and compare the lower-enrollment cash point with cash actually available after remaining opening uses. A national participation statistic or a promising waiting list cannot replace that test.

The Preschool case contains the complete opening allocation, five-year forecast and assumptions. Its evidence register separates external support from selected inputs. The classroom payroll calculator, business plan and financial model help organize the schedules and adaptations; they do not certify a license, family demand or cash sufficiency.

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Preschool

$280,000

capital to open