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This blog post is about what you need to know before opening a daycare.
So, you're considering opening a daycare, how exciting! I remember when I first opened my daycare ~ I had a million questions and no idea where to start. How do I get licensed or do I even need a license? What do I charge? How will I find the families? Will I be successful?
If you're feeling the same way, don't worry; you're not alone! Opening a daycare is a big step, but with the right plan, it can be very successful!
HOW TO OPEN A DAYCARE
What Is Daycare
Daycare is a safe, nurturing, loving, educating, and structured environment for children to learn, play, and grow. It's not babysitting ~ it's a place where you help build social skills, explore new concepts, build oral language, and grow through play, all while feeling at home.
There are several different types of daycare: you need to determine which one is right for you before moving onto the next steps.
- Home Daycare~ where you run the daycare business out of your home
- Center Based Daycare ~ large facility in a commercial building with several employees and children
- Faith Based Daycare ~ daycare in a home or center that centers God around everything they do
- Montessori Daycare ~ follows the Montessori method, child-led, hands-on learning activities
- Nature Based Or Outdoor Daycare ~ the learning is taken outside where kids learn through exploring in outdoor play
- Parent Co-op Daycare ~ a program where parents take turns running the daycare can be in home or facility
- Drop-In Daycare ~ Part-time care for emergencies where children are dropped off as needed
What Are The Pros & Cons
I'm speaking from a home daycare provider aspect in this section. I do not have any experience in owning a daycare center.
Pros
- home with children
- flexibility to keep up with household chores
- relationships with other children
- snuggles from babies
- bring in income while a stay at home mom
- own boss
- charge your worth
- dress how you want
- tax deductions
- active role model in small children
- no negative co-workers or boss
Cons
- home all day
- sickness
- house looks like a play cafe
- cooking and cleaning all of the time
- wear and tear on home and items
- no manager to deal with the difficult tasks
- long days
- affects whole family
- your children won't get our undivided attention
Licensing Requirements For Daycare
Now that you have a better idea of what type of daycare you're opening; you need to look at state requirements. Every state has its own set of licensing requirements to open a daycare. Some states don't require you to have a license if you watch minimal kids while others require a license with one child.
It's vital that you know your state's requirements before you start a daycare. At childcare.gov you can click on what state you live in, then click the box titled Understanding and Finding Childcare Resources, and then click Childcare Licensing. This will guide you with step-by-step guide on how to open a daycare.
Daycare Start Up Costs
The start-up costs factor in different scenarios and conditions.
If you're opening a center, that is going to cost thousands. Commercial buildings are expensive, and state guidelines requirements come with hefty price tags. Then, you have to factor in employee wages, training, and equipment.
Opening a home daycare will cost much less than opening a center. You already have the building!
Starting a business does require some upfront costs.
Listed below are a few items to think about when creating your budget. These are not exact numbers or an exhaustive list.
- Licensing & Legal Fees ~
- Licensing applications~ $50-200 (depending on state)
- Background & fingerprint checks~ $20-100 PER person
- CPR & FA certifications~ $30-100
- LLC registration~ $50-100 (depending on who you use)
2. Insurance
- Liability insurance~$300-1200 per year
- Homeowner's/Renters insurance~Check with your provider
3. Safety Equipment
- Fire extinguisher & smoke alarms~ $50-100
- Baby gates, outlet covers, cabinet locks~ $50-150
- Fencing (if required)~ $500 plus
4. Furniture
- Cribs, pack-n-plays, or nap mats~ $20-150 each
- High chairs & booster seats~ $30-100 each
- Child-sized table & chairs~ $100-300 each
- Storage shelving~ $50-200 each
- Plates, bowls, cups & sippy cups~ $10-25 each
5. Learning & Play Materials
- Puzzles & books~ $5-25 each
- Blocks, dolls, cars, & play kitchen~ $10-150 each
- Outdoor play~ $50 plus
- Arts & craft supplies~ $10-100 each
6. Marketing & Enrollment system
- Daycare software~ $45-100 a month depending on the software
- Website~ $25-100 (this is not necessary at all for home daycare)
- Business flyers~ $20-40
- Social media ads~ $30 plus (not necessary)
Start small, use what you have, and only buy what is necessary to keep start up costs down in the beginning.
Business Plan For Daycare
As with any business, you need to have a business plan! Especially if you intend on getting funded by a bank.
If opening a licensed center you will be required to have a business plan to gain funding.
The business plan should include:
- Executive summary
- Company description
- Products & services
- Market analysis
- Competitive analysis
- Marketing Plan
- Operational Plan
- Financial Plan
- Management & Organization
- Funding Request
A home daycare business plan doesn't need to be as fancy or in-depth if you do not intend on getting loans. However, it's a great idea to have a budget and understand the risk factors of starting a home daycare. I'd recommend completing the competitive analysis to help guide you in what rates to charge.
I go into more detail on how to complete the competitive analysis in How To Start A Daycare At Home, you can download a free competitor spreadsheet here!
What Do I Charge
Your business plan will guide you in finding the correct answer to this question. You will need to call other centers and find out what they are charging. Ask what services they provide and their hours. How many kids do they have?
If you're opening a home daycare, only call other home daycare providers to find out what they charge and what services are provided. If you are going to offer more services than the others, charge a little more for that gap, you'll be filling. You don't want to overcharge yourself and not get families, but you also don't want to undercharge and not get the right families. I add more value to my program due to my experience and degrees, faith-based, and completing preschool activities, so I charge about $15 more per kid per week than my competitors and have great success!
I have found that most providers are friendly and want to see others succeed they are willing to answer questions and give guidance!
This blog was all about opening a daycare.