How to Start a Day Care Business

Opening a Home Daycare Business

Gone are the days where Mom stays home to take care of the house and kids while Dad spends eight hours in the office to support his family. In this day and age, most homes are made up of either two parents who work full time jobs or of single parents providing for their children. In fact, according to the 2002 census results, only seven percent of American homes fell into the “traditional” category with one parent providing for the family. That leaves 93 percent of families in need of outside childcare.

While some families are lucky enough to have grandparents, friends or neighbors to help out with babysitting, there are plenty of parents who must look outside their circle in order to find childcare during their work hours. Because of this, daycare is a very lucrative business. So, how can you start a daycare business of your own?

Licensing vs. Registering

Each state handles childcare regulations differently. Some states require that a daycare be licensed, while others only require them to be registered. To find the regulations for your state, visit Either way, be prepared for a background check. If you have an interest in owning a long-term daycare business, it’s better to have a licensed business because you will be able to enroll a higher number of children. Licensing also means a yearly visit from the health and fire departments.

Your state’s child care licensing office is your best resource, so use the following as a guideline and ask for the specifics from them. Check with the Department of Family and Protective Services to find an orientation which will give you the necessary tools to move forward.

Getting your Daycare Accreditation

It is not mandatory that a daycare be accredited, but it is a show of responsibility on the business’ end. Accreditation is voluntary and an involved four-step process which includes an application process and workshops. The National Association for the Education of Young Children (NAEYC) is responsible for the initial accreditation and renewals.

Prerequisites to Opening a Daycare

Before opening a daycare center, the provider must take classes to become CPR certified. There are multiple types of CPR which are broken down by various age ranges. First aide classes are recommended as well. You can find affordable classes at

  • Local American Red Cross chapter
  • Hospital
  • YMCA

*The health department may be able to direct you to free courses in your area.

Most states require you to have at least a high school diploma or GED.

Preparing Your Home

Be ahead of the game by making sure you have the following:

  • Smoke alarms
  • Carbon monoxide detectors
  • Stair railings
  • Outlet covers
  • Outdoor play yard with fencing
  • Designated indoor spots for Napping, Eating, and Playing

States have different requirements for how much square footage you need per child, so find out what that ratio is right away in order to figure out what your enrollee cap is going to be. From there, you can begin to plan the aesthetic setup of your home business.

Decide if you’re going to offer specialized daycare. For instance, some daycares are exclusive to babies. Some cater to special needs children. Others work around unusual work hours. Whichever route you choose, you are going to need specialized supplies and toys.

Financial Perks

Although difficult to obtain, there are federal grant options available to for-profit daycare centers. It is worth looking into as you’re getting started.

Child & Adult Care Food Program (CACFP) has a food reimbursement program available to daycare centers. Some daycares receive as much as $500/month reimbursement. Not only is that good for your pockets, but it’s good for your business as you will have extra funds to use for play equipment and diapers (if you’re providing them).

Protect Your Daycare Business

Start the provider/parent relationship off with a formal interview. Include a questionnaire that covers medical and diet information, behavioral issues and emergency contacts. Allow the parents to observe the daycare’s scheduled activities for at least half an hour. If the interview goes well, it’s a good idea to request a down payment for the first month of services.

As with any business deal, be sure to have the parents sign a written contract. Things to include are pickup times and late fees, agreement to give notice when un-enrolling and specific rules. This will keep everyone on the same page and comfortable with the situation. Sometimes the daycare provider can end up having issues with a child’s behavior, or the parent could become unhappy with the service provided, so it’s always a good idea to include an “out clause” that will allow both parties to depart amicably.

Marketing Your Daycare Business

Once you have everything lined up, it’s time to promote your new business. A great place to start is by asking local elementary schools if you can leave business cards and flyers in their front office. Schools are trusted institutions, so the likelihood of obtaining interested families is much higher.

Many daycares are now creating Facebook pages so the parental clientele can communicate with each other. There is a relieving quality to providing transparency with your business. If you allow parents access to all avenues within your daycare, they will be at ease and less issues will arise down the line.

Word of mouth is the best marketing out there. Ask your parents to mention your daycare to their working friends with children. Offer them a discounted month (or more) if they bring in new clients. Most parents love the price break and wouldn’t mind sharing the experience with a friend. A tight knit group will keep on giving to a business that they believe in!

At that rate, you will have a waiting list that offers your business all the security it needs!


  1. I’m 15 so I am just a freshman in highschool but I am trying to figure out my future. I either want my own daycare business or become a judge. In order to become a judge you have to be a lawyer for x amount of years and it wouldn’t take off right away. So I started thinking about opening a daycare. I love children and have been told I know how to handle ‘children situations’ well. What I mean is I can get children to take naps and use the lofty and things like that. I am a highly talked about babysitter and I feel I could do very well with a daycare. On the other hand I love enforcing the law and getting ‘bad guys’ off the street. If anyone had any suggestions or comments please get back to me. Any feedback is greatly appreciated.

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