How to Start a Daycare Business

Business Startup Checklist

Free Business Startup Checklist

7 Min Read

Table of Contents
Writing a business plan?

Especially for single parents, daycares have become somewhat of a mandate. It is statistically proven that a general childcare crisis limits the entrepreneurial potential of women. Many women traditionally in the role of caregivers, and even men stepping into the role are looking to find a safe and reliable daycare for their kids while they are off to work.

The potential of a daycare business, thus, is huge in the current times. But, it’s not as simple as setting up a building for lodgings.

When caring about children, there are many responsibilities and precautions that need to be taken into account. Let’s explore the different key aspects of starting a daycare business.

Key Aspects for Setting up a Daycare

Both the knowledge and execution of your vision remain extremely important to narrow down how to start a daycare business. Here are some significant factors:

1. Educate Yourself First

educate yourself with information

Initially, to start with a Daycare Business, acquire some knowledge and try to gain real-time experience. But if you don’t have any of it, then clearly, you must educate yourself about the term Daycare. You can get started with an Early Education Childhood Degree.

Having a degree is just a matter of a certificate, a piece of paper signed by an institution. But it differentiates you from other daycare competitors. This degree distinguishes your knowledge, and you will gain professional experience for better insights.

To be a successful Daycare center, expertise, and experience are a must. You can research existing daycare business statistics to get an idea about the system they follow for maintaining the workflow. It can also be encouraging to observe the profit of such a business and the dynamics involved.

These profitable decisions will let you achieve your business-defined goals and attract the audience with the services you are offering.

2. Set Your Financial Goals

Set Money Goals

For starting any small-scale business, it’s essential to know how much capital you are investing. To keep your company on track, it is necessary to set financial goals to get an idea of how much cash is flowing in or out. You need to figure out all financial aspects to ensure business profitability. Consider the following set of questions to understand the suitable budget and necessary expenses. These are as follows:

  • Do you need to hire employees?
  • Are you planning to get space on a rental basis?
  • Do you need additional types of equipment to purchase for your daycare business, like toys, bedding, or other stocks?

If your answer to the above list of questions is yes, then it signifies the necessity to spend a specific budget on these expenses. Handling accounts is the most challenging part for any business owner. You need to take care of your accounts as well as Bookkeeping.

Several tools are available that you can use for taking care of your accounts. These bookkeeping tools can also help you generate an automated invoice and maintain journals.

3. Plan your Business and Finances

Planning your business and its administrative and financial aspects is very crucial. A detailed business plan must include all details for different management teams and all protocols for health emergencies, catering, entertainment, and much more.

A well-documented business plan can truly help with loan sanctions, getting business partners on board, and streamlining marketing strategies. Here’s what an ideal Daycare Business Plan Template looks like.

You also need to plan your finances after you set the budget. This requires some research about tax credits. For instance, If you consider opening an in-home Daycare center, you will be able to claim tax deductions because the tax deduction applies to properties used for business purposes.

Another way to reduce costs for your small venture is to take help from grants. It compensates for expenses as several contributors can invest in setting up your Daycare business.

4. Analysis of your Competition

Do a bit of research about daycare competitors to know what kind of services they provide in their Daycare business. Opening a Daycare doesn’t mean permitting children to watch TV all the time. Try to bring some distinct features with Daycare. Why would a parent like to leave their kid at yours?

Along with caring for the children, you need to promote discipline, improve their speaking skills, encourage studying, and keep them healthy for sure. You must conduct other extracurricular activities to increase the growth of children.

Not every daycare provides these many facilities; this can be a USP for you. Try to offer unusual hours in your daycare; this would be advantageous as most daycares are open for a limited period only. Take proper care of whatever menu for food you are planning to include for children’s diet. Basically, all grounds should be covered!

5. Appropriate Licensing

Whether it’s a small-scale business or a large-scale business, you must have a license to run any business. It’s the license that presents your business as a legal operation. The State’s Department of Children and Family Services believes it’s better to learn the regulations designed for childcare providers.

Although it’s just a license, you probably shouldn’t avoid purchasing a permit. It can lead to challenges ahead. You can apply for a variety of licenses at websites like the Local Child Care Licensing Agency. Health care, even CPR certification, and many more can be collected. Collect all the documents and keep them handy as it could be a time-taking process.

6. Communications and Sign-up Contracts


You need to prepare concise contracts between you and your clients to avoid any complications. It is better to mention the do’s and don’ts in the contract for precise communication and to avoid any misconception. Consider these questions to design the agreement for the betterment of both parties.

These can be a part of the sign-up form and could be as follows:

  • At what time do parents need to visit to pick up their child?
  • What are the consequences of a delay?
  • What services is your daycare business willing to provide? Also, mention what the parents have to provide in advance for the child.
  • Any specific policy for a child who is sick?
  • Do parents need to pay advance or monthly payments?
Active communication with parents is very important for a healthy and long-term customer relationship.

7. Market your Daycare Business

Marketing is necessary to attract potential clients and target your audience. You can approach this with either online or offline marketing techniques for your daycare business. Set up your website and post relevant content frequently.

You can integrate your websites with social media platforms like setting up a Facebook page or Instagram page. You also can design posters and flyers and post them on your social channels with attractive captions.

Start within your area and target audiences of specific demographics and geographic. Your daycare aesthetic and brand image will have so much to do with the customers you bring in!

Summing Up

A Daycare business setup must be a combination of fun and functional. You might get ideas to make your daycare fancy. But, with kids the simpler, the easier to maintain. This doesn’t mean you can’t consider various factors for making your daycare a fun place for kids from different age groups.

If you want to do something different, you can incorporate special activities, and games depending on the age group of kids you cater to. Head over to Upmetrics to find different business plan examples and plan exactly how you want your daycare to be!

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

About the Author


Sudeshna Ray

Avid writer and content marketer, Sudeshna Ray, has created content for diverse premises including technical niches, business and marketing, finances, creative character sketches, and much more. Engineer-turned-Writer-turned-Marketer, she has explored several aspects of performance, lead generation and establishing a brand presence in the digital domain.

Reach Your Goals with Accurate Planning

No Risk – Cancel at Any Time – 15 Day Money Back Guarantee