How to Start a Daycare

Whether you’ve always wanted to work with children or are looking for a way to help support parents struggling to find care, opening your own daycare can be a rewarding experience. From larger daycare centers to small, in-home programs there are lots of options for starting a daycare business.

 If you’re curious about what opening a daycare entails, we’re breaking down everything you need to know about starting your own daycare business. 

Why start a daycare business?

There are lots of reasons to open a daycare. It is a business that will always have a market— more and more families have two working parents and need care for their children during the day. While some families utilize nannies or babysitters, it isn’t financially possible for every family and some prefer the socialization aspect that daycare provides. 

Starting your own daycare is also a great option for parents of young children. You get to build the kind of program you’d want your children to attend, and then you’re right there with them each day. It’s the perfect balance between getting to be close to your children while also having some space of your own while they are with their teacher. 

Additionally, operating a daycare whether it’s a larger center or a small in-home program can be incredibly rewarding. The children in your care become like family, and it’s such a special opportunity to get to witness the growth that happens during early childhood. 

Pros and Cons of opening a daycare

There are a lot of positive aspects to opening your own daycare. Some of the pros include:

• Working for yourself: You are your own boss and that is appealing to some people.
• Financially rewarding: If you own your own daycare, your children can attend for free— saving you from having to pay for someone else to watch them and you are earning an income at the same time. It’s a win-win. 
• Personally fulfilling: Having a hand in caring for and educating young children is a beautiful thing!
• Create your own schedule: Depending on whether it’s an in-home daycare or a center, once your program is up and running and you have teachers and a Director in place, you can be physically present as much or as little as you’d like. 

However, opening a daycare certainly isn’t for everyone. Some of the cons of starting a daycare business are: 

• It’s a lot of responsibility: Taking care of young children is no easy feat- there is a lot of responsibility and even liability in opening a daycare.
• Startup costs: Like any business, there are some upfront costs to get your program up and running. The good news is, depending on where you live, there may be grants available for people wanting to start a daycare business. 
• There may be ebbs and flows: There may be times when your program isn’t fully enrolled and other times when you are full and have a waitlist. 

Opening a daycare by state

For more information on how to start a daycare in your state, check out our state specific guides on how to open a daycare.

• Alabama
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Delaware
• Florida
• Georgia
• Hawaii
• Idaho
• Illinois
• Indiana
• Iowa
• Kansas
• Kentucky
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• Nevada
• New Hampshire
• New Jersey
• New Mexico
• New York
• North Carolina
• North Dakota
• Ohio
• Oklahoma
• Oregon
• Pennsylvania
• Rhode Island
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Vermont
• Virginia
• Washington
• West Virginia
• Wisconsin
• Wyoming

Can you start a daycare in your home?

Starting a daycare in your home is a great option if you are looking to run a smaller program and you’re not interested in leasing additional space. In-home daycare providers can only care for a certain number of children at a time (this number varies from state to state) and still need to follow certain licensing requirements, especially when it comes to health and safety. 

If you are considering starting your own in-home daycare, be sure to look at the licensing guidelines for your state, research any grants available and reach out to any organizations that can help you get your business off the ground. 

Range in cost for starting a daycare

The up-front costs for starting a daycare can vary greatly depending on the size of your program and where you are located. If you are leasing a space for a daycare center, you will need to factor in the cost of rent in your area. An in-home daycare may be a smaller investment financially, but you also have a limit on how many children you can care for at one time. 

There are lots of other things to consider that affect the start-up costs for a daycare business:

• Licensing: there are costs associated with licensing that factor into the costs of starting a program. You may need to pay for space renovations to meet certain guidelines, apply for permits, etc. 
• Materials: You will need a variety of kid-friendly furniture and materials 
• Enrollment software: It’s a lot easier to run a program when you are using some sort of enrollment software. This can track your parent inquiries, schedule tours, even handle tuition payments. 
• Staff: Even if you plan on being the teacher in your daycare program, you will still need to hire additional staff to assist you and to be on-call in case of illness or other absences. 
• Education and professional development: There are often required workshops for daycare providers to attend to maintain licensure. 

Licensing requirements

Although the licensing requirements for daycare programs vary from state to state, they all contain most of the same components:

• Teacher-child ratios: Depending on the age of the children, there are a certain number of caregivers needed per so many children. For example, the ratio for three-year-olds in many states is 1:6, meaning there is one adult required for every 6 three-year-olds in a classroom. 
• Max group size: There are also generally limits placed on how many children can be cared for at one time. For an in-home daycare, this number may be smaller (8-12) whereas a larger center may be able to have up to 15 children in a classroom and multiple classrooms. 
• Staff requirements: Most states require background checks for childcare providers and some training in first aid, CPR, and child development. Staff may also need an up-to-date physical, including required immunizations.
• Health and safety guidelines: There are also lots of other guidelines in place from how many square feet of space is required per child to how to properly store cleaning supplies. Be sure to do your homework and find the licensing requirements in your state. 

Educational background 

Whether you need a background in early childhood to open a daycare varies by location and whether it is a center or home-based program. Typically, to open a larger daycare center you may need to be a licensed teacher, or at least have one as your Education Director. For an in-home program, an education degree is not required, but it doesn’t hurt. 

You also may want to look into classes on starting and operating a business. Opening and running a business takes a lot of skill and learning as much as you can before you start can be helpful. 

Making your daycare inclusive of children with special needs

Every parent has difficulty finding the perfect daycare for their child, but parents of kids with autism and other special needs have an especially difficult time. There are lots of factors to consider when providing care for children with special needs, since every child will come with their own unique strengths and challenges. 

• Hire the right staff. This is probably the most important aspect of starting a daycare for children with higher support needs. Your staff should be experienced, educated, and trained to work with children with special needs. They also need to be compassionate, nurturing, and flexible!
• Focus on the environment: When working with children with special needs, a lot of effort needs to be put into the design and layout of the environment. Entrances, classrooms and bathrooms need to be ADA compliant, there need to be ample visuals and lots of calm, quiet spaces. You may need adaptive seating or certain sensory equipment, depending on the specific population you serve. 
• Be flexible: Making your program inclusive means being open to pivoting if you need to. You may realize that your classroom furniture won't work for a specific group of kids or that your curriculum needs tweaking. It's okay to change and adapt according to the needs of the children in your care. 

Steps to opening a daycare

Step 1: Research and Develop a Business Plan

Before opening a daycare, it’s important to create a business plan. This will help you figure out a budget for your program, what the up-front costs will be, and how many families you will need to have enrolled to ensure all your costs are covered. You will especially need a business plan if you are looking to secure grants or loans as banks or donors may want to look at it. 

In your business plan, you will set your mission, philosophy and outline any goals for your daycare business. You can set up an organizational structure, outline your operating costs, tuition payments, and teacher salaries. 

The more work you do ahead of time, creating a thoughtful business plan and putting policies and procedures into place ahead of time, the easier things will be once you get your program up and running. 

Step 2: Research Grants and Funding

There are many ways to find grants or funding to open a daycare. Most states have a childcare association or resource center that maintains a list of grant opportunities. You also may be able to secure funding through other local businesses. Many larger companies set aside money to give to local businesses and childcare is a community service that people may be willing to invest in. 

You may also be able to secure small business loans through your bank, or another local bank. You can also contact your local chamber of commerce, as they often know about resources in the community for people opening a new business. 

If all else fails, you can always try your luck with crowd-funding. You may find that friends and family members as well as members of your community may be willing to help fund a new daycare in their area. 

Step 3: Choose a Location and Facility

It's important to choose a facility that is spacious, clean, and meets all the licensing requirements for a daycare. You may need to make some modifications or renovations to the facility to meet state and local regulations. You'll also want the location to be easily accessible, to make it easier for parents to get to you.

Step 4: Obtain Licenses and Permits

To operate a daycare, you will need to obtain licenses and permits from your state and local government. The requirements for licensing vary depending on your location and the age range of the children you will be caring for. You may need to complete training, background checks, and inspections to obtain the necessary licenses and permits.

Step 5:  Hire Staff and Develop Policies and Procedures

Hiring and training qualified staff is essential to the success of your daycare. You need to ensure that your staff has the necessary training, experience, and certifications to care for children. You also need to develop policies and procedures that govern how your daycare operates. These policies should cover everything from drop-off and pick-up procedures to emergency protocols.

Step 6: Establish a Curriculum 

 Your curriculum should be age-appropriate, fun, and educational. You can incorporate activities such as arts and crafts, outdoor play, storytime, and music into your daily routine.

Step 7: Market and Advertise Your Daycare

Once your daycare is up and running, you are going to want to spread the word to local families. Utilizing social media and other online channels is your best bet, as this is where today’s parents are spending most of their time. 

You may want to do some research about any local family resources, websites, blogs, or gathering places where you can hang flyers or place an ad.

Need more information? Get marketing ideas from Winnie about how to increase enrollment.

There are also sites like Winnie, where you can claim your program listing and take advantage of advertising where parents are already searching for care.