At a glance
A 40-seat Oregon preschool can work – but the site is the capital gate
For statewide planning, the model below holds one concept constant: an independent, commercial, full-day preschool for children from 36 months to school age, licensed as an Oregon Certified Child Care Center. The center has two 20-child classrooms, a 40-child licensed capacity, one leased site, and a working owner who serves as director and covers classroom hours. Oregon rules require at least 35 square feet of qualifying indoor activity space per child and, for this age band, a 1:10 staff-to-child ratio with a maximum group size of 20. Oregon DELC's certified-center guidance and the certified-center rules are the regulatory anchors.
The tuition assumption is deliberately statewide rather than city-led. Oregon's 2024 Market Price Study reported a capacity-weighted statewide monthly preschool-center price of $1,241 at the 50th percentile and $1,540 at the 75th percentile. The Base case uses $1,475 per enrolled child-month as a 2026 planning price – not an observed statewide average. That sits inside the published 2024 statewide band and is consistent with Oregon's 2026 ERDC certified-center preschool maximums, which vary materially by rate area. See the 2024 Oregon Market Price Study and 2026 ERDC maximum rates.
Startup scope
The 40-seat Oregon build is usually a $388,000 project
The startup model separates hard improvements, pre-opening expenses, deposits, initial working capital, and the cash reserve instead of hiding them in one “working capital” plug. All three scopes preserve the same 40-seat capacity. Lean assumes a second-generation space needing relatively light corrections; Premium assumes a difficult conversion with more plumbing, accessibility, playground, security, and life-safety work. The amounts below are modeled planning allowances informed by Oregon's licensing requirements and the state's documented child-care facility permitting/infrastructure barriers, not contractor bids.
| Use of funds | Lean | Typical | Premium |
|---|---|---|---|
| Lease deposits / prepaids | $12,000 | $15,000 | $24,000 |
| Design, permits, licensing, professional | $10,000 | $18,000 | $30,000 |
| Tenant improvements / fire / accessibility / plumbing | $55,000 | $145,000 | $265,000 |
| Classroom furniture, playground, security / tech | $42,000 | $63,000 | $95,000 |
| Pre-opening payroll and training | $18,000 | $28,000 | $42,000 |
| Insurance deposit, launch marketing, opening supplies | $18,000 | $24,000 | $34,000 |
| Initial net working capital | $3,000 | $5,000 | $8,000 |
| Opening operating-cash reserve | $45,000 | $60,000 | $80,000 |
| Contingency | $17,000 | $30,000 | $37,000 |
| Total project cost / founder cash required | $220,000 | $388,000 | $615,000 |
For the Typical case, initial liquidity funding is $65,000: $5,000 of initial net working capital plus a $60,000 unrestricted operating-cash reserve. The reserve is not a second expense. It is cash held against the modeled opening ramp: approximately $22,000 of maximum cumulative operating deficit through month three plus a $38,000 minimum closing-cash floor. Opening supplies are already listed separately, so they are not counted again inside net working capital. Refundable lease deposits remain uses of cash but are not operating expenses.
Startup project cost – Oregon statewide planning model, 2026 USD
Launch and licensing
Oregon licensing is predictable; the final address is not
The safest dependency order is site eligibility first, lease second. DELC explicitly tells applicants to verify planning and zoning before acquiring a property. A certified center also must satisfy building code, environmental health, fire approval, lead testing, and licensing requirements. The certified-center application is due at least 45 days before planned opening, but that is a filing lead requirement – not a promised agency processing SLA. Oregon's current land-use framework is also moving: 2025 legislation effective January 1, 2026 expanded where child care centers must be allowed, while local governments have implementation work through 2026. DLCD's 2025 legislative report explains the change.
| Deliverable | Prerequisite | Owner / authority | Modeled duration | Critical-path issue |
|---|---|---|---|---|
| Site and zoning feasibility | Concept fingerprint | Founder, landlord, local planning | 2 – 6 weeks | Do not sign an unconditional lease first |
| Lease, concept plan, pre-certification | Feasible site | Founder, counsel, design team, DELC | 2 – 4 weeks | Can overlap early design |
| Permits and build-out | Site control and design | Contractor and local building/fire | 8 – 16 weeks | Largest schedule uncertainty |
| CBR, hiring, training, lead lab | Hiring plan / fixtures | DELC, lab, staff | 4 – 8 weeks | Run in parallel with construction |
| Environmental health, fire, corrections | Near-complete site | Inspectors and contractor | 2 – 6 weeks | Failed inspection can reopen construction |
| Complete DELC application and opening | Required approvals and documents | DELC Child Care Licensing Division | File ≥45 days ahead | Processing SLA not published |
Lead-water testing deserves its own clock. Oregon requires testing of fixtures used for drinking, cooking, or bottle preparation; DELC says laboratory processing typically takes 4 – 6 weeks and results must be submitted promptly. The test repeats every six years. DELC lead-testing guidance should be checked before buying fixtures or finalizing the plumbing scope.
| Requirement | Level | Fee / timing | Dependency | Official source |
|---|---|---|---|---|
| Oregon domestic LLC | State | $100 initial; $100 annual; online processing listed at 1 – 3 days | Legal entity for lease, banking, payroll | Business Xpress |
| Employer Identification Number | Federal | No IRS fee; online | Payroll and federal tax administration | IRS |
| Central Background Registry enrollment | State | Confirm current applicant fee and processing | Required for regulated adults before qualifying work | DELC CBR |
| Certified Child Care Center license | State | 40 seats: $180 initial; $80 renewal; file ≥45 days before opening | Zoning/building evidence, health/fire, lead and other application items | DELC Certified Center |
| Fire, environmental health and lead | State / local | Varies by jurisdiction; lead lab typically 4 – 6 weeks | Site readiness; corrections before licensing | DELC inspection path |
| Zoning, building, occupancy, signs | City / county | Varies by city/county | Final address, current use, construction scope | DLCD Child Care Facilities |
| Workers' compensation and employer accounts | State / federal | Insurance quote required; payroll accounts before wages | Hiring employees | Workers' Compensation Division |
| Immunization reporting | State / local health | Operational requirement; fee not published | Enrollment records and annual reporting | Oregon Health Authority |
Local variation and address checks
Portland
The city's commercial certified-child-care guide directs applicants through zoning/use research, possible land-use review, building/trade permits and a Land Use Compatibility Statement; the page notes roughly 3 – 4 weeks for LUCS review after fee payment. Official city guide.
Eugene
Local zoning verification has historically been part of the child-care siting process; current code and 2026 state-law implementation should be confirmed with the planning department rather than relying on an older form. Official zoning document.
Bend
The city publishes a child-care requirements guide covering zoning districts, site-plan review and conditional-use scenarios. Because 2026 state law expanded siting rights, verify the current development code before budgeting a review path. Official city reference guide.
Revenue and capacity
Thirty-four enrolled children is the Base-case engine
The natural revenue unit is an enrolled child-month. The center operates about 250 weekdays a year with a ten-hour service window, but the licensed and staffing constraints matter more than raw open hours. At 40 seats, two groups of 20 fit Oregon's age-36-months-to-school-age group-size rule. The Base case assumes 34 enrolled-equivalent children, or 85% utilization, with $1,475 of earned monthly tuition per child plus $1,200 per month of earned registration/enrichment revenue. Parent deposits or prepaid tuition are cash receipts first and become revenue only as care is earned.
Base monthly earned revenue = 34 enrolled children × $1,475 tuition + $1,200 earned ancillary revenue = $51,350
Revenue excludes any sales tax collected. Oregon has no general sales or use tax, so the model does not add a transaction-tax pass-through to preschool tuition. Oregon Department of Revenue.
| Metric | Downside | Base | Upside |
|---|---|---|---|
| Enrolled children / utilization | 26 / 65% | 34 / 85% | 38 / 95% |
| Tuition equivalent / child-month | $1,400 | $1,475 | $1,550 |
| Ancillary earned revenue / month | $700 | $1,200 | $1,800 |
| Monthly earned revenue | $37,100 | $51,350 | $60,700 |
| Annual earned revenue | $445,200 | $616,200 | $728,400 |
| Passive-basis contribution | $18,900 | $27,700 | $34,000 |
| Normalized passive cash operating profit | – $1,300 | $7,200 | $12,200 |
| Working-owner pre-tax business cash benefit | $5,100 | $14,000 | $19,200 |
Monthly earned revenue – Oregon statewide model, Typical scope, 2026 USD
The 2026 Oregon Commercial Activity Tax registration threshold is $750,000 of Oregon commercial activity, with payment generally applying above $1 million after the statutory subtraction and formula. Base annual revenue of $616,200 stays below the registration threshold; Upside at $728,400 is close enough that growth should be monitored. This model therefore excludes CAT from Base operating costs rather than pretending every Oregon preschool pays it. Oregon DOR CAT guidance.
Base unit economics: one enrolled child-month
$1,510 revenue – $607 variable non-owner cost – $88 variable owner-replacement teaching labor = $815 passive contribution per enrolled child-month
Cash contribution before compensating the owner for direct classroom work is about $903 per child-month. Fixed rent, management labor, general insurance and other overhead stay out of unit contribution and are carried in the break-even numerator.
Operating economics
Payroll, not rent, decides the Oregon margin
The Base staffing plan is ratio-led: staggered classroom staff sufficient to maintain Oregon's 1:10 ratio for this age band, a relief/admin layer, and a working owner who splits time between director duties and classroom coverage. Oregon's May 2023 BLS data reported mean hourly pay of $20.20 for preschool teachers and $26.35 for preschool/daycare administrators; the 2026 model budgets above those historical averages and layers employer payroll burden because recruiting to a legal ratio is operationally more important than hitting a national labor percentage. BLS Oregon OEWS.
| Cost line | Amount | Behavior / basis |
|---|---|---|
| Direct non-owner classroom payroll, loaded | $16,500 | Enrollment/ratio-driven within the Base capacity band |
| Variable owner-replacement teaching labor | $3,000 | Economic labor cost for direct work performed by owner |
| Food, snacks and classroom consumables | $3,300 | Mostly variable with child-days |
| Payment fees, refunds and bad debt | $850 | Variable collection friction |
| Occupancy: rent / CAM planning allowance | $6,400 | Fixed; 3,500-SF modeled site, state-basket informed |
| Fixed relief/admin payroll, loaded | $4,500 | Step-fixed staffing / coverage |
| Fixed owner-replacement management labor | $3,800 | Economic director/admin replacement cost |
| Utilities, insurance, cleaning and maintenance | $3,200 | Mostly fixed; insurance quote required |
| Software, marketing, professional, training, recurring fees | $2,600 | Fixed / discretionary mix |
| Total cash operating cost on passive basis | $44,150 | Before D&A, debt service, maintenance capex and income tax |
Largest Base cash cost lines – Oregon statewide model, 2026 USD/month
Oregon's wage floor also varies within the state. For July 1, 2026 through June 30, 2027, BOLI lists $16.80 per hour in the Portland metro area, $15.55 under the standard rate, and $14.55 in nonurban counties. These are floors, not recommended child-care wages. Oregon BOLI minimum wage. The model's loaded payroll also recognizes employer Social Security and Medicare and Oregon unemployment insurance. For 2026, Oregon lists a 2.4% new-employer UI rate and a $56,700 taxable wage base; small employers under 25 employees do not owe the employer share of Paid Leave Oregon contributions, although they must handle required withholding. Oregon Employment Department rates and IRS Publication 15 are the payroll references.
$7,200 per month
Normalized cash operating profit after both variable and fixed replacement labor for the owner's work, before D&A, debt, maintenance capex and income tax.
$6,800 per month
$3,000 of direct classroom replacement labor plus $3,800 of fixed management/director replacement labor. This is imputed market labor cost, not an owner draw.
$14,000 per month
Passive profit plus the replacement labor avoided by the working owner. It is a pre-tax business cash benefit, not guaranteed salary or accounting net income.
The working-owner case implicitly asks the founder to cover a demanding mix of director, sales, compliance and roughly part-time classroom hours. If the owner wants a genuinely passive investment, the $6,800 monthly replacement-labor addback disappears and the Base return falls to the $7,200 normalized passive cash operating profit. If the actual owner is already on payroll, normalize that payroll before adding replacement labor so the same work is never counted twice.
Break-even and cash
Break-even arrives before full enrollment
There is no single honest break-even because the answer changes with the ownership basis. Cash survival ignores owner compensation. A sustainable working-owner threshold adds a target $7,500 monthly owner compensation requirement. The passive threshold prices the owner's direct work inside contribution and the remaining management work inside fixed cost. All three calculations use the same Base capacity band and therefore avoid moving the same labor dollars between numerator and denominator.
| Measure | Matching basis | Result |
|---|---|---|
| Cash-survival break-even | $16,700 fixed non-owner cost ÷ 59.8% cash contribution margin | $27,900 / 18.5 child-months |
| Sustainable working-owner break-even | ($16,700 fixed non-owner + $7,500 owner target) ÷ 59.8% | $40,500 / 26.8 child-months |
| Passive-owner break-even | ($16,700 fixed non-owner + $3,800 fixed owner replacement) ÷ 53.9% passive contribution margin | $38,000 / 25.2 child-months |
| Base passive cash operating profit | $51,350 revenue – $44,150 passive-basis cash operating cost | $7,200 / month |
| Base working-owner business cash benefit | $7,200 passive profit + $6,800 avoided replacement labor | $14,000 / month |
| Base cash after maintenance-capex reserve | $14,000 working-owner benefit – $1,400 maintenance capex | $12,600 / month |
63% passive break-even
About 25.2 child-months against 40 licensed seats. That is achievable inside the modeled capacity, though ratio-driven labor remains stepwise rather than perfectly linear.
$60,000 opening reserve
The Base ramp loses a cumulative maximum of about $22,000 through month three, leaving the disclosed $38,000 minimum cash floor. Because burn is uneven, runway is schedule-based, not reserve divided by average burn.
Month 37
First month cumulative unlevered working-owner project cash reaches zero after the $388,000 month-0 Typical project investment and the modeled ramp.
The monthly working-owner project schedule begins at – $388,000 in month 0, then adds operating cash after maintenance capex of approximately – $12,000, – $7,000, – $3,000, +$5,000, +$9,000 and +$12,000 in months one through six. From stabilization, the model uses $12,600 per month before owner income tax. Cumulative cash first reaches nonnegative in month 37. The passive-owner version, after full replacement labor and the same $1,400 maintenance reserve, reaches payback at about month 79. These are unlevered project results; there is no founder-equity/debt payback because no debt has been assumed.
Oregon market context
Demand is real, but price and occupancy are geographically uneven
A reliable statewide preschool market-revenue amount is not publicly determinable from the available category data. DELC's facility capacity data cover multiple child-care age groups, while the Market Price Study measures slot prices rather than total provider receipts. Treating those as a preschool TAM would manufacture precision. Better statewide proxies are supply, price distributions, subsidy rate areas, and the ability of a specific address to draw enough families at the planned tuition.
84,458 certified-center seats
DELC reported 84,458 licensed capacity across 1,423 Certified Child Care Center facilities in 2025. This is all certified-center capacity, not preschool-only market size, but it shows a substantial regulated supply base. DELC child-care safety data.
$1,241 to $1,540
The 2024 statewide center-preschool monthly price range from the weighted 50th to 75th percentile is wide enough that a $100 – $200 pricing miss can materially change margin. DELC also notes price clusters differ across the state, with higher-priced areas generally more urban.
Occupancy is another location-sensitive input. A limited rent planning basket reviewed in August 2026 used a Q2 2026 retail market asking-rent figure of $23.78 per square foot per year in Portland, a current 3,000-square-foot listing at $17.04 in Salem, and a 3,947-square-foot listing at $15.00 in Medford. The observations are not perfectly like-for-like and none proves “child-care-ready” condition, so the model does not call their median a statewide average. It uses them only to anchor a broad lease range and then budgets $6,400 per month all-in for a modeled 3,500-square-foot Typical site. CBRE Q2 2026 retail figures, Salem lease observation, and Medford lease observation.
The variables to stress before signing
Every lost Base child-month removes roughly $1,475 of tuition while not all payroll or rent falls with it.
Ratio coverage is a legal capacity constraint. Overtime, call-outs and a thin substitute bench can destroy contribution even when classrooms look “full.”
A $50,000 facility overrun increases Typical project capital by nearly 13% before any operating miss occurs.
A 5% Base tuition cut reduces monthly tuition by roughly $2,508 before any enrollment response.
The $14,000 working-owner benefit includes $6,800 of labor the owner is performing. Hiring that work out materially lowers return.
Local payroll taxes, business taxes, permits and review charges can apply depending on the final jurisdiction and transit district.
Method and evidence
What is official, observed, derived, and still needs a quote
Research was reviewed August 28, 2026. Dollar outputs are presented on a 2026 planning basis. Official state fees, licensing rules, wage floors, payroll rules, tax thresholds and current subsidy rates are treated as high-confidence inputs when the responsible agency publishes them. The 2024 market-price study and 2023 BLS occupational wages are authoritative but older period observations, so the financial model uses them as anchors rather than pretending they are 2026 quotes. Facility construction, rent fit-out, insurance, utilities and local permit costs remain quote-sensitive.
Official fee or rule
DELC licensing fee formula, 45-day filing lead, ratio/group rules, LLC fees, 2026 minimum wage, UI and CAT thresholds.
Published benchmark
2024 statewide price study and 2023 Oregon occupational wages; period mismatch is disclosed and values are not represented as live quotes.
Local quote required
Build-out, insurance, exact rent/CAM, utilities, local permits, contractor schedule and final payroll offer levels.
The largest uncertainty is the site. Oregon's rules give the model a clear floor for space, staffing and approvals, but a statewide article cannot know whether a future address already has compliant occupancy, egress, restroom counts, outdoor space, accessible paths, fire protection or a favorable lease. Use the Typical case as a first-pass capital plan, then replace the modeled facility allowances line by line with address-specific bids.
| Source / publisher | Geography / period | Evidence type | How used |
|---|---|---|---|
| DELC Certified Child Care Center | Oregon; current 2026 | Official fee / rule | License fee, application timing, inspections and site prerequisites |
| DELC Certified Center Rules | Oregon; current rules | Official rule | Ratio, group-size, application dependencies and licensing model |
| DELC / OSU Market Price Study and ERDC rates | Oregon; Dec. 2024 / Jan. 2026 | Published benchmark / official rate | Tuition planning band and geographic price dispersion |
| Oregon BOLI and BLS Oregon OEWS | Oregon; 2026 floor / May 2023 wages | Official / government data | Teacher/director wage anchors and regional wage floor |
| Oregon Employment Department and IRS Publication 15 | Oregon / U.S.; 2026 | Official payroll rule | UI and employer payroll-burden logic |
| Oregon DOR sales tax and Corporate Activity Tax | Oregon; current 2026 | Official tax rule | No general sales tax; CAT threshold check |
| Oregon Business Xpress | Oregon; updated Jan. 2026 | Official fee | LLC formation and annual renewal |
| Oregon DLCD Child Care Facilities and Business Oregon CCIF | Oregon; 2024 – 2026 | Official policy / project context | Facility barriers, build-out uncertainty and scope validation |
| DELC lead testing and Oregon Health Authority | Oregon; current 2026 | Official requirement | Lead-testing clock and immunization-record obligations |
| Oregon Workers' Compensation Division | Oregon; current | Official rule | Workers' compensation requirement; price left to quote |
| CBRE retail figures plus Salem and Medford observations | Three Oregon markets; Aug. 2026 review | Observed market quote / limited sample | Directional occupancy anchor; not called a statewide average |
| Portland, Eugene, Bend | Local examples; current check required | Official local examples | Shows local zoning/permitting variability only |
Use before committing capital: verify the exact operating address with DELC and the applicable city/county, confirm current rule editions and fees, obtain landlord/contractor/insurance quotes, and rebuild the monthly ramp using actual deposits, enrollment dates, payroll offers and construction draw timing. This article is a planning model, not legal, tax, architectural or licensing advice.