How to Start a Daycare Business

A childcare business is one of those many small business ideas people can start right from home. Since more than 23% of children below the age of five attend childcare, it is one of those businesses that are always in demand. Therefore, if you are looking to start a small business and wondering how to start a daycare, then you will find all the important steps in this article.  

Know About Licensing Requirements 

While you may have started as a nanny or a babysitter, you need to get the proper licenses before opening a daycare business. Contact your state’s Department of Children and Family Services (DCFS) or any other childcare licensing agency in your area to learn about the regulations. You will also require CPR certification, clean driving records, and documents proving your commitment to providing quality childcare.  

Gather Similar Experience  

Starting a daycare center may not need professional childcare experience, but acquiring some knowledge about early childhood development is strongly recommended. You can start by getting a degree in early childhood education from any local community college or online. This will help you better understand how children behave and think. Also, this will provide you with skills that can help your business stand apart from your competition.  

Create a Business Plan 

You need to have a business plan before starting any small business. From setting tangible goals to organizing your business structure to outlining your services, there are several factors that you need to take care of. Similarly, before learning how to start a daycare, you need to define the mission statement of your childcare business apart from considering the various operations and procedures. You also need to take care of the budget and staffing. These factors will keep your business on track as you strive toward success.   

Read Also: What is Personal SWOT Analysis and Why It is Important for Business? 

Find a Location  

If you are considering opening a daycare at home, you are good to go. Otherwise, you need to look for a suitable location. Recreational centers, local businesses, schools, and even churches have spaces that they provide to host daycare for a monthly fee. You also need to check with your city’s zoning laws and licensing guidelines to make sure your location is compliant. Essentially, you are looking at a location that is easily accessible, child-friendly, and centrally located. 

Get Insurance  

Like any other business, you also need insurance to protect your business. There are different insurance policies, from liability coverage to workers’ compensation to property protection. Therefore, make sure that you go for suitable policies. You may also consult with your local childcare provider licensing office.  

Look for Grants  

Starting a daycare center may involve a significant amount of capital. If you do not have that sort of money, you need to acquire funding to cover the initial costs of your startup. Apart from grants, you can also consider community fundraising or SBA loans. Your goal is to invest this money in a manner that can yield the maximum profits.   

Prepare Your Center  

Now that you have an ideal location and enough capital, you can prepare your daycare center. Apart from sanitizing your facility, you must take the necessary steps to childproof your daycare. Finally, lay out all the age-appropriate play equipment and toys and open the doors of your business.   

Draft a Contract  

One may feel that their job ends after starting the business. But there are several other factors that you must consider after opening a daycare business. For example, it is always a good idea to draft a contract. Since the parents who drop their child at your facility are your clients, you must have a solid contract to protect yourself from legal issues. You must consult a lawyer to draft a contract that suits your needs and business requirements. This contract can also outline your expectations from your clients.   

Establish Policies  

You also need to set some ground rules for those families that attend your facility. For example, you must have privacy protocols, safety procedures, and an emergency plan. This will keep the children safe and protect them from any liability. You also need to review your policies with local childcare licensing requirements.  

Research about Tax Benefits 

If you are opening a daycare at home, you may be eligible for some tax reductions as you are using your residence for business purposes. Therefore, research the various tax benefits of starting a daycare center.   

Hire Staff as Per Requirement 

As a small business owner, you must take every possible step to save money. For example, you may not need additional staff at the beginning of your business. If you are keeping up with the local daycare licensing requirements and not admitting more children than you are eligible for, you can easily function independently. In case you hire any staff, make sure to do a criminal background check.  

Market Your Services  

Like any other small business, you must market your services to attract potential clients. There are several ways to market your business, from creating flyers and posting them in your local community to running paid ads on Facebook and Google to attract families from your local area. You can also build a website that provides more information about your services. Try using search engine optimization (SEO) so that when families search for a daycare service near them, your business can pop up in the results. 

Read Also: Inbound Marketing for Small Business: 5 Things to Know 

Promote on Social Media 

Social media has emerged as one of the best marketing tools these days. Instagram, Facebook, and LinkedIn, among others, can be easily used to promote one's business and attract potential clients. You can easily create a Facebook page and post information about your services and client testimonials. These platforms can also keep your clients updated about every event at your service. Once your business grows, you can also opt for a digital marketing agency that can help increase your online presence and outrank your competitors.  

Provide the Best Service  

Marketing can help you attract new clients, but it is your service that will keep them interested. Therefore, ensure that you provide top-quality service to your facility's kids. If you can make them enjoy returning to your daycare, you can attract more referral business. You can also ask families to review your business on various online platforms. Positive reviews can work wonders in improving your daycare’s reputation within your area.   

Manage Your Finances  

Finally, you must take care of your finances to stay in the long run. Most small businesses fail due to poor money management. You also need to plan your taxes and track your revenue and expenses. Intelligent allocation of funds can also play a crucial role in small businesses.  

Before starting a daycare, you must acquire enough experience and information about children’s behavior. If you can create an environment that kids find enjoyable, your business will take care of itself. Hence, ensure you do your homework before starting a childcare business.