How to Start a Daycare

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Image of a playground

Overview of A Daycare Business:

A daycare provides an excellent opportunity for individuals to cash in on this booming industry. As dual income families have become the norm, parents find no other option but to leave their children in the hands of capable daycare providers.

This model is not for the large daycare chains. In fact, individuals who are capable of running a small business in their neighborhood are in a great position for steady revenue.

Parents also feel safer leaving their kids with capable neighbors and people they know who limit the number of children they supervise, which implies greater safety.

Anyone who truly loves children, is patient, and has good family support, is ideal for starting a home daycare. If they do their research, find low-cost ways to get started, and follow good practices, they will reap many rewards, both financial and emotional, for years to come.

There is a tremendous amount of flexibility and leeway when it comes to the services you choose to offer. You may limit your clients to children in certain age groups or adjust your operating hours to meet the needs of a particular parent work hours. You may want to provide transportation between your daycare and the children’s homes and/or schools.

If your goal is to stay home and run your own daycare, you can make it a profitable as long as you plan from the start. Know exactly what you want before your doors open. You can start with a minimal investment.

Skill Set:
  • Make sure all paperwork for each child is complete and easy to find.
  • Create photo id’s for every child, one to keep with the child and on in your office
  • Prepare healthy meals and snacks at scheduled times.
  • Schedule quiet or nap times.
  • Proper dispensing of any medications.
  • Plan activities around crafts, music, learning skills, and motor skills.
  • Tend to children’s specific needs according to age.
  • Make sure children are dressed properly according to weather.
  • Know how and when best to discipline (get children to quiet down, etc.).
  • Ensure the safety of all children
  • Ensure the whereabouts of every child at all times
  • Knowledge About Child Development – A degree in early childhood education isn’t necessary to be a good provider, but some basic knowledge about child development is crucial.
  • Patience – Small children don’t know how to wait. Dealing all day with many children who make constant demands takes a great deal of patience.
  • Click Here For A List of Common Management Skills
Employee & Job Consideration During The Start-Up Phase Or In The Future:
Approximate Daily Hours Needed:

Depending on your location, this job typically has longer hours that span from early in the morning to early evening.

Plan to spend about an hour to prepare for your little arrivals. At the end of the day, plan time to clean and store equipment and toys properly.

Equipment, Supplies, & Services During Start-up OR In The Future:
  • Suitable furniture and decorations are needed to create visually stimulating surroundings. You will also need play structures, toys, books, posters, and art and craft supplies. Remember to always go with quality as children typically wear things out faster than adults.
  • Computers for the kids
  • Printer
  • First aid kit
  • Furniture – high chairs, baby cribs, beds, tables, play cushions, etc.
  • Play structures, toys, and games
  • Separate refrigeration unit
  • Cubbies or shelves with dividers
  • Diapers in various sizes
  • Van for pickup/drop off service
  • Potty chair
  • List of Essential office Equipment
Monthly Expenses To Consider:
  • Ongoing child care and safety courses
  • Food, drinks
  • Craft supplies
  • Toiletries such as wipes, toilet paper, napkins, and paper towels
  • Supplies for drawing and craft activities.
  • Baby diapers, baby products, and potty training equipment
  • Food and nutrition supplies
  • Disinfectant, cleaning supplies
  • Certifications
  • First aid kit replenishment
  • List of Common Monthly Expenses
Licenses:

Every state has its own rules and regulations concerning licensed family daycare on their website, usually listed under their Department of Human Services. All states require a criminal background check and most require some training and a safety inspection of the house before issuing a license. It saves time and money to make sure all requirements have been met before scheduling an inspection.

You will need to file an application before starting and you will need to meet basic childcare requirements like taking a CPR class and having your fingerprints documented.

Contact your local Department of Health and Human Resources to find out what the child daycare requirements apply in your area. They will have a limit on how many children you can have in your home at one time. They also have a limit on how many hours you can work.

You may also need to take instructional courses while you are running your own home child care center. They will probably send you a startup packet that will tell you everything you need to know to get your daycare up and running as soon as possible.

See Our Page on Licenses and Permits

Approximate Minimum Startup Cost:

The average startup cost varies depending on how much of the furniture and supplies you already have. The typical startup range is between $1,000 to $5,000.

Marketing Tips:

Here are several ways to advertise for free. If you have a computer, make yourself some fliers to pass around. In the fliers you will want to list the most important services you offer, as well as the unique benefits for your service.

You can place your fliers up at schools and grocery stores, leave a few on the counter of a gas station, or find a friend on the PTA who can pass them out for you during the next meeting. You may also want to place a flier in all the local establishments in case there is a mom or dad there looking for childcare.

You can also place an ad in the local newspaper. Create a local Google Ad campaign, Create a Facebook page etc.

Special Requirements:
  • One of the most important things to do is know the rules and regulations when it comes to childcare. You should also know the codes for health and cleanliness in order to know what to do with the area where you are going setup.
  • You should know what areas should be kept private for you and your family, and let the people know that it is a restricted area and no one is allowed to enter there except you and your family.
  • Find someone whom you can trust to substitute for you when you are not available. It could be a friend or a family member, but always make sure that she or he has the ability to take care of children and most especially is very trustworthy.
  • Another important thing to remember is to provide the children with meals, usually hot meals during lunch time and small snacks such as crackers or bread with juice and water during the afternoon. You should follow the health and safety code locally to avoid problems in the long run. Make sure that children don’t go near the kitchen.
  • Learn how to talk to the parents. Be honest about everything; if their child causes too much trouble to talk to them about it since some children might get affected by their child’s attitude.
  • Plan your hours. Since the children’s parents are probably busy during normal working hours, make your hours available from early morning up to the after 6:00 pm. This will allow parents to pick up their children.
  • Keep records for each child so you can identify special needs, for example, if a child has allergies, needs special mediation etc.
  • Keep a log file for any incidents that occur, such as accidents, fights among children, etc.
  • The biggest expense when the beginning is the added furniture, toys, and supplies needed to accommodate a large number of children throughout the day. Some sources for low priced furnishings, equipment and toys are:
    • Thrift stores and garage sales
    • Relatives and friends with items their kids have outgrown
    • Special sales at school supply outlets
    • Liquidation stores
  • Do you credit the parent’s account or do they still pay if they are on a monthly plan?
  • Do parents bring their own diapers or do you supply them? What if the baby runs out of diapers? Do you charge for each diaper used? If so, how much?
  • When is payment due? Is there a grace period? What happens if a check bounces? Are there refunds? What are the consequences of late payment? Do you refuse service?
  • Have your attorney write up your policies or do it yourself with legal forms available online.
  • Fire safety equipment such as extinguishers and alarms must be installed, first aid kits must be purchased, and the daycare area must be fenced to keep children within a safe play zone.
  • Make sure you have the correct permits and insurance, any problems and you could be facing a huge lawsuit
Pros and Cons:

The Pros:

  • A child daycare is a joy to run for people who love children
  • You have the advantage of being your own boss
  • You are helping to shape the minds and personalities of children
  • There is plenty of work to keep you busy
  • Completely expandable.

The Cons:

  • Can cause a lot of stress and noise
  • It can be hard to collect payment from some parents
  • Children can become ill
  • You can be held personally liable for any injuries or illnesses
  • Liability insurance can be expensive
  • You’re pretty much responsible for the children’s, safety, diet, and well being
Type of Customers You Need to Attract:

The target market is working with parents and legal guardians.

Occupations with a high number of employees working nights and weekends, such as janitorial, hospitality, customer service, and technical support, are experiencing substantial growth, and workers in these fields find obtaining quality child care an even greater challenge than their 9-to-5 counterparts.

Statistics:

The demand for childcare is projected to increase as mothers and fathers continue to work outside the home along with the increase of single-parent households.

Approximately one-half of the children in the United States today are cared for by someone other than an immediate family member during some portion of each day.

In two-thirds of two-parent homes, both parents work, providing a large and ever-growing consumer base for the daycare industry. In addition, 12 million children; more than 20% of the children in the United States live with single parents who need child care in order to work.

One of the biggest challenges facing American families today is caring for their children while the parents work.

According to the Bureau of Labor Statistics, only 13 percent of all families fit the traditional model of the husband as wage-earner and wife as home-maker.

In 61 percent of married-couple families, both husband and wife work outside the home. Six out of every 10 mothers of children under age six are employed. As the number of working parents rises, so will the demand for childcare.

A recent study conducted by the Urban Institute, a nonprofit policy research organization, revealed that about 30 percent of working parents have two child-care arrangements, and another eight percent are using at least three.

The study found that 65 percent of parents juggling multiple child-care arrangements use a combination of formal day-care centers, Head Start programs, and babysitting by relatives and friends. Another 20 percent use two separate day-care centers.

Revenue:

The more children you can supervise and manage without trouble, the more money you can make.

Daycare centers typically charge around $50 a day for each child and may charge more for meals. In other words, for every 10 children, you can bring in roughly $2,500 a week in gross profits for a 5-day/week program.

Other child care providers in the area can also give good advice on such things as the going rate for childcare in the area, share ideas for activities for children, and keep each other posted about parents who don’t pay their bills or are difficult to work with.

Daycare Resources:

Related Sites:

A Day Care

ChildCare.net

The Daycare Resource Connection

Courses:

Child Care Provider Program

Universal Class

Equipment and Supplies:

Hertz

Associations:

National Association of Child Care Professionals

National Association for Family Child Care

Books:

Start a Daycare (ebook)

The Business of Child Care

From Babysitter to Business Owner