Starting a Family Child Care Business

June 30, 2014 | By | Reply More

One of the easiest home businesses you can start is a family daycare business, where you take care of your neighbor or friend’s children in your home. States normally require daycares to be licensed, but some states allow unlicensed family child care businesses provided they don’t exceed the number of children allowed.

family child care business

What is a Family Child Care Business?

A family child care business provides care for a small group of children in the caregiver’s homes. It is often considered as the smallest type of day care business.

A family child care business is home-based and provided in the home of the business owner. In comparison, child care centers have its own separate facility other than the owner’s residence and have more caregiver staffs to care for groups of children. The Office of Personnel Management describes child care centers as, “either privately operated for profit by a chain or individual, or operated by non-profit agencies, such as churches, public schools, government agencies, or non-profit vendors.”

Family child care businesses are registered or licensed in most states — depending on the number of children. Regulations vary from state to state; but most states require family child care providers to also undergo criminal background checks, training and be subjected to regular state inspection.

In Wisconsin, a day care business is classified as a family child care business if it is taking care of 4-8 children, as compared to a group child care center which takes care of 9 or more children.

In Virginia, licensing starts when the daycare business has 6 or more children under its watch. According to the Virginia Department of Social Services, which governs licensing and regulation of daycares in the state, “the Code of Virginia mandates the licensure of family day homes that provide care for six to twelve children (exclusive of the provider’s own children and any children who reside in the home).” Therefore, you can operate a family daycare business, without the need for licensing, in your home for up to 5 children.

Starting a Family Child Care Business

The first step in starting your family childcare business is to prepare a business plan. Even if you will not be applying for a bank loan, a business plan helps you to think through your business – what it needs, who it will benefit, how much it will cost, and what is its potential. Thinking through the business includes knowing how you will reach your target market, or even how to approach the neighbor you think would benefit from your services.

For detailed information on what you need to start a family child care business, read the article What Do You Need to Open a Daycare Business?

It is also important that you learn the tax rules affecting daycare centers, especially if you are going to open one from your home. Read the IRS instructions for child care businesses. Read IRS Publication 587, Business Use of Your Home (including Use by Daycare Providers).

As for the licenses and requirements in your state, check out our state by state listing of contacts for licensing and regulations governing child care businesses

Recommended Articles on Starting a Daycare Business:

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


Jenny Fulbright

Jenny Fulbright

Jenny Fulbright is a writer for

Starting a Family Child Care Business
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Starting a Family Child Care Business
One of the easiest home businesses you can start is a family daycare business, where you take care of your neighbor or friend's children in your home.
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