Starting a Daycare Center: What You Need to Know

Daycare Center (Photo: Gautam Arora)

If you have a nurturing nature and a keen business sense, the daycare center business could be a great option for you. There is also a lot of demand for daycare, and people will not stop making kids anytime soon. There’s also a lot of potential for specialization with more daycare centers focusing on development and preparing children for school life.

While it’s not the most difficult business to enter, there are still requirements and standards you’ll have to meet, as well as challenges you may have to face. Here are a few things you need to know if you want to start a daycare center.

What You Can Expect to Pay

People often either overestimate or underestimate the costs of starting a running a daycare center, and you need to have a clear idea of how much you can expect to pay before getting started. According to, you can expect to pay anywhere from $10,000 to $50,000 to start one. The costs will depend on whether you decide to renovate your home or make additions.

You shouldn’t worry if you don’t have that kind of money saved up, however. Know that there are tons of financing programs and grants for daycare centers. Local companies will even offer incentives to promote daycare centers in the community, so don’t be afraid to reach out.

Licensing Requirements

You also have to make sure that you are aware of licensing requirements in your state. These are essential if you want to be legitimate and to be able to start the registration process. If you want to know the requirements in your jurisdiction, you will first need to talk with your local Department of Children and Family Services. You can also contact your local child care licensing agency.

There is also some special certification that you may need in your state. Most will require that you have your CPR certification, for instance. This is pretty simple and doesn’t take much time, but it will be necessary if you want to open your business.

Finding Employees

You should know that finding good employees can be tough, and making mistakes in this area could be disastrous for your business. So, you will need to take screening very seriously, and even consider going with a third party for the hiring process. You might think that this is a bit extreme for a small business like a daycare center, but they will have the resources needed to screen bad apples right away, so don’t risk the chance of having your brand tarnished by them.

Location is Important

You may think that running a daycare center from a residential area is the best option, and it does have its benefits. But you should also consider looking at getting a location specifically for the daycare center.

This could allow you to get more foot traffic or business from commuters who may want a daycare center that is close to where they work. If you decide to use your home, however, you should make sure that you look at zoning laws where you are.

If you have a bigger place for your daycare center, you can consider the help of a school canopy company if you are interested in installing a school canopy onto your site. This canopy can be used to make the most out of existing spaces.


Also know that you might have to start looking for child care insurance for your business right now. It will help protect your assets and will provide general and professional liability coverage as well. Lawsuits are very common in this business, as well as cases of neglect, and this is something you won’t be able to avoid. Daycare insurance services will protect you by paying any damages and covering the related legal costs.

You’ll Need a Lawyer

You should also know that there are many legal implications when running a daycare business, and you will need to draft contracts for your employees and parents who bring their children in. You will also need to understand employment laws so you don’t end up committing a violation. Here, you’ll have to work with a legal professional at the very beginning unless you already have the expertise. You’ll also need to hire a good accountant. They’ll be able to help you file taxes, but also build a sound pricing strategy or help you identify areas where you might be leaking money.

This is all you need to know before you can start a daycare center. The rest is all about preparation and making sure that you offer the best service possible.

1 Comment

  1. You made a good point that the location is important to consider as well when finding a daycare center. I’d like to look for one soon because I will be a lot busier with more complicated projects at work. I might have less time to spend at home with my child in the coming months.

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About the Author: Brian Novak