15 Strategies For Starting A Daycare Business [Business Plan]

15 Strategies For Starting A Daycare Business

Daycare facilities provide kids with a head start in socializing and early education. They might hold the secret to your financial security and fulfilling work for you. The preschool-aged children receive some daycare because most parents do jobs outside the home. The children under the age of five are looked after by babysitters, nannies, or other family members, although nearly one-quarter (23.4%) go to a formal daycare facility. It opens up several possibilities for people who want to launch their own daycare business. Opening a daycare facility may be both a personal and financially gratifying venture. Opening a daycare facility is not so easy. There are several factors to consider, including the economy, commercial advantages, insurance, obligations, and more. Fifteen strategies you can follow to launch your business are included in this comprehensive guide, along with all the information you need to operate a daycare center.

Why Open A Daycare Business?

Although starting a daycare might be challenging, it can also be rewarding. Although there is no formula for success, many operators of childcare businesses enjoy the adventure. So there are many good reasons to start a daycare, whether it’s your love of children or your desire to help parents in your neighborhood. It’s crucial to take into account your particular motivations for wanting to start a daycare business, as these will inspire you to carry out your desire. Although there will be challenges along the way, starting a daycare is unquestionably worthwhile.

Daycare Business In The Current Economy

The need for childcare has always been paramount. However, many childcare programs were negatively impacted by the COVID-19 outbreak. More than two-thirds of formal daycare facilities in the United States are either closed or operating at a reduced capacity to comply with social distancing laws, according to a USA Today study. In addition, when much corporate employment moved to remote work, many parents no longer needed daycare. Daycare facilities also continue to struggle with inflation, which has an impact on the price of rent, electricity, food, supplies, employee wages, and tuition. Even though all of this may seem overwhelming, the daycare sector is once again expanding. The need for daycare business has increased as a result of the relaxation of COVID-19 laws, which allowed parents to return to their jobs. The U.S. Bureau of Labor Statistics predicts that between 2020 and 2030, job growth for daycare workers will increase by 8%, keeping up with the average national growth rate. Additionally, there are numerous advantages to operating a daycare facility to take into account, even though the economy can easily harm any company.

Is It Possible To Run A Daycare Business From Home?

Yes, starting a daycare facility from your house is possible and might even be less expensive. It is due to the variety of local, state, and federal choices that offer subsidies and money to in-home daycare facilities. It’s worth investigating getting a Small Business Administration (SBA) loan if you already have the room to operate a childcare business from your house. These loans can assist you in financing your project.

What Is The Starting Cost Of A Daycare Business?

The average beginning cost for a daycare business is between $10,000 and $50,000, according to the small business website. Whether you’re operating a daycare in your home or renting a different space for your care center, it will have a significant impact.

The Benefits Of Starting A Daycare Business

There are several benefits to opening your daycare center. One advantage is that beginning your care facility from scratch will give you a sense of accomplishment. Then there is the pleasure of spending quality time with kids and picking up valuable lessons. If you’re still debating opening your daycare, take into account these potential benefits:

1. Personal Child Care

Parents of children must think about child care when they leave for work. Who will look after their kids? What will the price be? Will they be able to deliver and receive them? These queries are answered for you by starting a daycare business. Opening a childcare service could increase your financial freedom if you raise your children at home.

2. Rewarding Career

Many daycare owners and staff members know how rewarding it is to educate, support, and inspire kids. The development of young children’s social, emotional, and cognitive skills depends on childcare. Teachers have a direct influence on the attitudes and actions of their students.

3. Financial Flexibility

Employees in the business world depend on their managers and supervisors for their paychecks. You gain financial independence and control over your income when you open a daycare business. Making decisions to advance your company and secure your financial future is another benefit of owning a business.

4. Tax Advantages

You can save money on taxes by starting a daycare. For instance, you can deduct some daycare costs as a business owner, such as your vehicle and childcare supply costs, as well as your utility bills. You can deduct a percentage of your housing cost when you file your taxes if you start an in-home daycare.

5. Emotionally Rewarding

Working with children teaches you to have patience and appreciate the little things. Additionally, starting your firm will give you more freedom than being restricted to a regular day job.

15 Strategies For Starting A Daycare Business

In general, launching a small firm is a journey. Although we’ve provided a few instructions for starting your business, along the road, you’ll pick up a lot of lessons; and you might forge your route. Having stated that, even if you have no prior expertise, there are 15 strategies explained for opening a daycare business.

1. Learn About The Prerequisites For Daycare Licenses

You could have started as a nanny or babysitter, but to legally open a full-fledged childcare business, you must first obtain the necessary licensing. By doing this, your daycare business will be genuine you won’t have any legal issues as a result of caring for children. To find out about the exact rules your state has for childcare providers, follow the following steps:

  • Get in touch with the DCFS in your state.
  • Get information from the licensing body for child care in your community.
  • Collect this type of data from online resources.
  • Need a clean driving record, and a CPR certification.
  • Collect other documentation that demonstrates your dedication to offering high-quality child care to get a license to open a daycare facility.

If you’re unsure whether you’re meeting all standards, don’t hesitate to consult your local agency.

2. Think About Enrolling In Early Childhood Education Courses

Although you do not need to have any professional expertise in child care to open a daycare business, it is highly recommended that you do. You’ll be taking care of young people, so you need to understand how to give the best support. It’s a good idea to get a degree in early childhood education to get started. Usually, local community college offers both on-campus and online courses. With this degree, you’ll be:

  • Aware learning about how kids function cognitively and behaviorally
  • Familiarized with what they require from adults to provide them with the best possible care. Equipped with the knowledge necessary to distinguish your company from competitors.
  • Be more prepared to provide the services that parents need and entice them to use your services repeatedly.

3. Make A Business Plan For Your Daycare

A business plan is beneficial when starting any small business. A business plan can help you arrange your business structure, explain your services, create measurable goals for your company, and much more. You’ll describe your daycare’s procedures and operations, mission statement, staffing, and budget in your daycare business plan. This business plan helps to keep you motivated and moving in the right direction.

4. Search For A Daycare Business Location

This phase should be simple if your daycare will operate out of your house. Otherwise, you’ll find a location for a daycare business. There is room available in many community centers, churches, small companies, and even schools to house a daycare, usually for a monthly charge. To find possibilities in your area, search online, in your neighborhood newspaper, and within your network. When you’ve located a place that works well, you should confirm that it:

  • Complies with your city’s zoning regulations and licensing requirements.
  • Steers clear of potential legal issues in this manner.
  • Picks a place that is convenient, kid-friendly, and strategically placed.
  • Take into account the qualities that parents and children will seek out in a daycare facility.

Even if you can’t find the ideal solution, you can still make it work with some care.

5. Get Insurance

To protect children, most daycare businesses require a variety of insurance. These contracts often contain company insurance, property insurance, workers’ compensation insurance, and liability insurance. Uncertain of the kind of insurance you require? You can always seek advice from your local licensing office for childcare providers.

6. Look For Funding And Grants

As we’ve already discussed, opening a daycare is undoubtedly expensive. You’ll have to think outside the box to find finance if you don’t have enough cash to pay for your initial beginning expenses. Numerous grants are available to assist you in paying your beginning fees. You can also think about organizing a local fundraising effort or obtaining an SBA loan. Recognize that the intention is to use the funds in a way that will benefit your company.

7. Get Your Daycare Center Ready

It’s time to get your daycare facility ready once the appropriate supplies and equipment are in place and the area is safe. Follow the following steps for this purpose:

  • Start by cleaning and disinfecting your space using a powerful cleaner.
  • Then, following the children ages you will be looking after, take the necessary steps to childproof your daycare. Use this checklist to help you childproof your home.
  • Finally, arrange toys and play equipment.
  • If you want to keep things organized, you can choose to use storage boxes.

After giving it one more look, you’re prepared to start doing business.

8. Prepare A Contract

It’s usually a good idea to have a contract if you’re a small business owner. You want to have a strong contract in place to safeguard yourself from legal difficulties since the parents who visit your facility are effectively your clients. We advise using a reputable contract attorney to design a contract that is tailored to your demands and your company’s needs. Then, you’ll utilize your contract to specify what you anticipate from your customers and their kids. After the contract has been signed, you can send qualified daycare invoices to your clients for payment.

9. Create Policies And Practices

Establish guidelines and rules for your workers and the families who use your daycare. These procedures could include your facility’s rules, safety measures, privacy policies, and emergency plans. By putting these measures in place, you can safeguard the children and shield yourself from liability. Review the local childcare licensing standards before designing your procedures to ensure compliance.

10. Look At Potential Tax Credits

Because you will be using your house as a place of business, you may be qualified for certain tax breaks if you decide to operate an in-home daycare. It implies that you can effectively deduct a percentage of your housing expenses.

11. Hire Personnel As Required

If you’re starting, you might operate as a one-person business to avoid the expense of recruiting extra staff. To care for the kids throughout the day, though, you might eventually need to employ help. This is particularly true if you come up against the staff-to-child ratio that is specified in the guidelines for obtaining a municipal childcare license. Follow the following steps that are helpful for you in this matter:

  • Check these to ensure you have adequate employees to care for the number of youngsters you anticipate.
  • To further secure the children’s safety, make sure all childcare professionals submit to background checks and can provide references.
  • To keep your facilities secure and uphold a good reputation, be selective when employing new employees.

12. Publicize Your Daycare Business

How can you draw families into your daycare now that it is operational and set up? Like any other business, you’ll promote yourself to attract potential clients. There are several ways to advertise your childcare which are discussed below:

  • Making leaflets and distributing them around your neighborhood—at stores, institutions of higher learning, and coffee shops—is one strategy.
  • To attract families from your neighborhood, you can run paid advertisements on Google or Facebook.
  • Consider creating a website that details your services to help your daycare come across as a serious enterprise.

The setup and cost of a simple website might range from $10 for a WordPress template to $2,000 for a custom design. You can then utilize SEO with a website to draw natural traffic from Google. In this manner, your company is more likely to appear in the searches when families look for a daycare close by.

13. Use Social Media To Market Your Daycare Business

Social media is yet another powerful marketing tool. You can utilize websites like Instagram, Facebook, and LinkedIn to advertise your company and attract new customers. Follow the given marketing strategies:

  • Create a Facebook profile for your business to share more details about your childcare, gather client feedback, and alert families of upcoming activities.
  • Post on LinkedIn and Instagram to draw in local families using certain hashtags.
  • Spend money on paid marketing services as your company expands.
  • Consult a marketing agency or consultant, which can assist you in expanding the internet visibility of your company, outranking regional rivals, and gaining new customers.

14. Deliver High-Quality Care

You must give your families the best possible care if you want your daycare to succeed. You’re more likely to get more referral business if the children at your daycare are well-cared-for and, enjoy going there. A few good reviews might go a long way toward bringing in new customers. To enhance the reputation of your business, ask families to leave reviews for it on Facebook, Google, Yelp, and other review websites. Always try to find methods to make your daycare better. To make your daycare the clear choice for families near you, solicit feedback from parents, make educational investments, and hire outstanding staff.

15. Control The Finances Of Your Company

Due to inadequate financial management, many small enterprises collapse. You must have a working knowledge of accounting for businesses and know how to control your spending if you want your company to be successful. Monitoring revenue and spending is only one aspect of keeping track of your company’s finances. After deducting expenses, taxes represent about 30% of your income, so you’ll need to budget for them and decide how to distribute your earnings wisely. Making wise financial decisions will be simpler the more you know. Maintain control over your company’s finances to ensure that it not only survives but thrives.


Starting a daycare business might be difficult, but it can also be very rewarding. Having a general starting point road map makes the procedure simpler. It is expected that this article has motivated you to launch your own company and provided you with some startup tips.

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