Child Daycare - How to Start My Own Daycare Business

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Daycare Business

Daycare home business – if you are a parent of small children and work, you know the hassles of finding really good daycare for your children. You want the best and are willing to pay, but it seems like a negotiation every time.

So why not go into the daycare business yourself? If you like kids and know how to manage them well, then the daycare business is a booming business. Daycare centers with good reputations have waiting lists for clients, and parents looking for daycare for their children will do just about anything to make sure their kids end up in a good situation.

Daycare isn’t babysitting or running a school. It is a business and must be treated as such. Running a daycare means that you have to be able to separate your care and nurturing of the child from the business of running the daycare. This isn’t always easy and does require that daycare owners and workers be able to care without becoming overly attached. One thing is for sure – you will lose 100% of your childcare kids at one point or another – whether the family moves, a parent stops working, or the child goes to school – you will lose them all. If you can’t deal with that, then the daycare business is not for you.

There are physical risks involved in running a daycare center. Children get sick and so will you. You will have to learn how to deal with that. Children also get hurt by their own actions and the actions of others. All you need is one biter and all the other parents will be upset. It can be difficult to let the children get the exercise they need, but still keep them all safe. Running a daycare business is not for wimps.

Running a daycare has more than a few risks besides the physical ones. Parents will tend to want to abuse the daycare relationship, expecting that you won’t care when they show up late. They will blame you when things go wrong, expect you to raise their child as they would, and generally want to call the shots all day long and hold you responsible when things don’t go perfectly. You have to be able to set rules and boundaries and let business go that isn’t working out.

Because you are running a daycare at home, you will also need to keep very good records and abide by certain regulations. To protect children, the law requires a maximum child to adult ratio, partially based on the age of the children you take care of. Because infants require more care, the ratio of infants to adults is smaller than it is for older children. There are also certain nutritional requirements as well. This is to prevent daycare owners from running cheap by only giving kids low cost/nutrition food.

Running a daycare has many upsides. Running a daycare center from your home means that you work at home, there is great money to be made, and very nice tax breaks. If you love being around kids, this is a dream job, and there’s not much for office politics that you have to deal with. You are the boss, and the worst thing a client can do to you is poop his pants.

Daycare service in a boom economy

Daycare centers are almost always busy, and those with good reputations are always in high demand. This is particularly true in a boom economy with high employment ratios. Fewer parents are unemployed, and this means daycare centers are very busy and often have waiting lists several months out.

Daycare service in a bust economy

It is true that daycare centers find their demand goes down in a bust economy. More parents are unemployed and stay home, and more parents find other options to daycare such as grandparent care in order to make ends meet. However, daycare centers that are exceptional still manage to hold onto their clients. Parents know that finding good daycare is hard, and so to give it up for a few months of hard times is less likely.

How much money can I make?

There are several factors that determine the kind of income a daycare center will make:

Location – affluent areas bring higher rates to daycare

Age range – working with children under age 2 means you will charge more but have fewer kids you can legally provide services for

Your rate structure – do you charge by the hour, day, or week? Many people only choose full time childcare, though many others are willing to be flexible and take care of part-timers.

With an average of $8,150 per year ($679 a month), daycare costs for babies and toddlers in the United States range from $4,388 to $14,647 a year ($366 to $1,221 monthly), according to data from the National Association of Child Care Resource & Referral Agencies (NACCRRA).

Topping the charts with costs over $11,000 a year ($917 a month) for baby and toddler daycare are the following states, beginning with the most expensive: Massachusetts, Washington, D.C., Minnesota, New York, Wisconsin, Washington, Pennsylvania, and Maryland.

And at the bottom of the charts, here are the states with daycare costs below $6,000 a year ($500 a month) for baby and toddler daycare, beginning with the least expensive: Louisiana, Kentucky, Mississippi, Nebraska, Texas, Idaho, North Dakota, South Carolina, Kansas, and Alabama.

Childcare for preschoolers

Costs for daycare for preschool-age children are generally lower, averaging $6,423 a year ($535 a month). Depending on where you live, you'll pay anywhere from $3,794 to $10,920 a year ($316 to $910 a month).

Geographical limitations/differences

This primarily has a big impact as it affects cost of living. As cost of living increases in places like Connecticut or the San Francisco area, costs go up. Lower cost regions like the southern Midwest regions will generate far lower costs. There may also be some differences in rules and regulations, but these are minimal.

Competitors

Anyone who baby-sits for working parents is your competitor, whether they operate legally or not. Many people “watch” children for others, but don’t officially run daycare centers. It’s a part time job for grocery money.

Your best bet is to not try to compete on this basis. Trying to compete with the local babysitter is nearly impossible. Chances are that they are not incurring the cost of doing things according to legal daycare rules or are not as diligent in making sure the kids have quality hands-on time.

Only look to compete with similar daycare centers who maintain professional standards and use the fact that you do this as your marketing tactic.

Advertising your daycare center business

Concentrate on the quality of your service and what you provide for children. Most parents want the best they can afford and want to know that their daycare provider is giving their children top nutrition, a home environment, and lots of hands-on care.

With this as your reputation, don’t shy away from higher end prices. People associate low quality with low prices, and higher prices with better service.

License Requirements

See your local city, county, and state for proper licensing and reporting requirements for daycare centers

Daycare center supplies

Many daycares find that their best purchasing options for things like diapers, toys, and food are online or through commercial supply stores. Places like Costco, Sam’s Club, and BJs are great places to pick up volume materials and lower prices.

Financial Requirements

You will have to equip your home or place of business to do business as a daycare center. This usually means painting surfaces, childproofing certain areas, creating barricades to prevent children from going places they are not allowed, investing in toys, books, and entertainment that is suitable for the age range.

What to do next

Determine what licenses and inspections may be required to open a daycare center.

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