How to Start Your Own Daycare Business

February 15, 2014 | By | 13 Replies More

Articles in the Starting a Daycare Business Series:

start a daycare business

There’s a definite need for day care centers as more and more mothers of pre-school age children are forced to find jobs outside the home. This is due in part to the current economy, and unfortunately, to the high divorce rate, which means mothers who might ordinarily stay at home and care for their own children must seek income to help make ends meet.

The Demand for Daycare Centers

Many experts expect the demand to increase through the turn of the century, and the popularity of this type of business to continue growing from there. They base their forecasts on the fact that more and more young parents have happy memories of the time they spent in day care centers, and the learning experiences they enjoyed. And again, there is the continuing need or desire of young mothers to work outside the home.

RELATED: What Do You Need to Open a Daycare Business?

Profitable day care centers are much more than glorified baby-sitting services. Social researchers have found that the most important years in a child’s development are those from one to six. Thus, the exposure to the world in which he lives, the instruction he receives, and the habits he forms during those years, definitely affect his ability to learn and properly adjust as he progresses on through his years of formal education.

For mothers of today – usually better educated than their mothers – are more aware of these factors and wanting the best for their children, are demanding the structured pre-school education and learning stimulation offered by modern day care centers. This is an honest desire of the mothers of pre-school age children – even those who aren’t forced to work outside the home.

Another thing in your favor: Even though there seems to be a trend for many large companies to finance and operate day care centers for their employees in or close by their factories or office buildings, studies show that most working parents prefer to leave their children closer to home than where they work. Thus, privately operated day care centers in residential neighborhood areas should not be worried too much about competition from the few company operated day care centers.

Starting Your Daycare Business

The first step toward start-up of a profitable day care center is to understand what makes them profitable.

There are a lot of day care centers operating with full enrollments of 35 to 65 children, but just barely breaking even. This is generally the result of regulations imposed by the state government, causing exorbitant overhead costs of operation. Basically, you’ll need facilities to handle 150 to 200 children in order to realize annual profits in the “before taxes” bracket of $100,000.

Check with your state and local government regulatory agencies. Many states require day care centers to provide a minimum area per child, both inside and outside the building, plus at least one hot meal per day. A licensed teacher for every 15 to 20 children, and even a licensed nurse on the premises may be required. Be sure to know the regulations in your area, and then design your business plan to meet these regulations.

daycare business

Actually, you can begin by operating a baby-sitting service, by learning and expanding from your profits, and of course, through the long-term benefits of establishing a quality image. In fact, we recommend that you do start small – with a baby-sitting service – and build upon your progressive successes. Unless, of course, you have half a million dollars to invest.

Once you’re beyond the baby-sitting stage, out of your home and backyard, beginning to build a real day care facility, you might try locating in your church or one of your area’s civic club facilities. Also, you should check out the possibilities of renting or buying a vacant house. A large ranch-style home with a large backyard would probably suit your needs at this stage. But be sure you have zoning approval from your city council before signing a rent lease and finalizing your plans.

Starting a Day Care Business on a Shoestring Budget


Recommended Books on Operating a Daycare Business and Caring for the Children:


Jenny Fulbright

Jenny Fulbright

Jenny Fulbright is a writer for

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