Daycare Business
In most American households, both parents are part of the workforce. Thus, there are no full-time, stay-at-home caregivers to look over infants and young children. This prevalent culture makes daycare business a huge industry in the US.

The 2017 Child Care Aware of America noted child care as one of the major expenses in a family’s monthly budget. Every month, American families shell out between $800 and $1,230 for child care services or roughly 18 percent of their income.

As more families become part of the workforce, the demand for high-quality daycare and childcare services is on a steady increase. If you love children, opening your child care center can be rewarding.

Surprisingly, starting a daycare center doesn’t require major capital expenses. With the proper blend of business acumen, childcare skills, and commitment to children, your daycare business can be lucrative. Find out how to start a daycare business with this ultimate guide.

Start Small

First-hand child care experience is a must. So, before you open a full-fledged, commercial daycare center, you should experience providing childcare services. Initially, you can offer to babysit your friends and neighbors. This should give you an idea about how it feels working with children, learn basic childcare routines, and see whether you’ll like the job.

Usually, supervising a small number of kids would not require licenses and permits. You can take care of one or two children at a time. Aside from actual babysitting, you’ll need to prepare meals and develop structured activities throughout the day.

This hands-on experience will prepare you to handle a larger number of kids and eventually manage your own daycare business. It can also help you save up capital.

Evaluate your experience after several months or a year. If you enjoy kids and find the experience fulfilling, you can move on to planning a state-licensed daycare center that allows you to admit more than two kids at a time.

Set Up Your Own Daycare Center

Unlike babysitting that involves limited planning, starting a daycare business requires a lot of thought and planning. There are several things that you need to consider, such as:
Business plan

A business plan is crucial as it will put in detail all aspects of the business. This written document will guide you from initial phases down to its day-to-day operation. It also ensures that your daycare remains financially viable.


Although childcare providers don’t require a specific degree, some states require child care providers to attend an orientation program and apply for licensure. There are also mandatory courses such as preventive health training, first aid training, basic life support, and CPR course. You can get a certification by enrolling in a basic life support course with c2cfirstaidaquatics. Ideally, you should also understand basic business management to help you run the business efficiently

Suitable space

If you have sufficient space in your home, you can choose to start a home-based daycare center. Otherwise, you need to look for commercial space within your neighborhood and accessible to parents. The area should have enough space to cater to your intended number of enrollees. You will also need to do modifications to make the area conducive for childcare.


Daycare centers are required to get a license. Licensing requirements may differ based on your state, so check with your local licensing authority. Some basic requirements to prepare include staff background checks, staff-to-child ratio, the safety of your facility, occupancy permits, zoning regulations, and compliance with local business registration rules. You might need to apply for a food service license if offering meals. Your employees should also meet the health requirements.


Documentation is an important aspect of running a childcare center. You’ll be managing numerous records, not just regarding the care of the children but also on other administrative tasks. According to developers of Prime childcare management software, record-keeping is one of the challenges that many first-time daycare operators face. Technology can greatly help streamline and make this process easier.

Hiring staff

Not everyone loves children, so you have to be careful when hiring staff. You need to find child-loving people and capable staff. This trait is non-negotiable as kids require so much patience. Their duties include preparing food, cleaning up, playing with kids, and attending to their needs. They also need to deal with families, especially parents.


Every business will have legal needs. In daycare business, you’ll need contracts for parents, employees, and lease agreements. These legal documents should protect your interests. Working with an experienced lawyer can help you draft and review contracts, and ensure that they are favorable to you. This is particularly important in daycare business as you deal with kids. Eventually, you might have to incorporate your business to protect your assets.


You need to assemble childcare essentials like pillows and blankets, cribs, sleeping mats, age-appropriate toys and books, utensils, and posters. Likewise, you should stock up childcare consumables like wet wipes, soap, disinfectant, first aid supplies, kids’ meals, etc. You’ll have to invest in office equipment like computers, printers, attendance checkers, and CCTV cameras. Of course, you’ll also need office supplies such as papers, pens, folders, logbooks, etc. Keep a checklist of all supplies for quick reference.

Establish rules

Rules and regulations are important to make business processes and management easier. You need to establish written policies such as the enrolment, scheduling, drop-off and pick-up, meals, payment, and penalty rules, etc. You should also have written documents for your employees to follow in their day-to-day routines. Be sure that these rules are communicated to parents and your staff so that you can implement them more easily.


Dealing with kids entails liabilities or accidents, thus you need to have appropriate coverage. Typically, general liability insurance can protect you. However, there are specific insurance packages that are designed for your business needs. Talk with a trustworthy insurance agent to find a suitable coverage.

Marketing plan

Lastly, you need to develop a marketing plan. For your daycare business to be profitable, you need a large number of enrollees. You can offer free services for a limited period, so you can gain word-of-mouth referrals. Social media, radio, and print ads are other effective marketing strategies you can invest in.

Final Thoughts

If you love children, starting a daycare business could be right for you. It would help that you start small to get an overview of the business. Offering home-based daycare services is a good stepping stone and a great way to learn basic skills. Once you’ve got a good grasp of childcare routines and you feel like you’d do well at it, you can then start a full-pledged childcare center. There are plenty of opportunities in this industry as more families demand high-quality daycare services.

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