This tutorial will guide you on how to start a profitable day care center successfully and as such, it’s important you take time to read it to the very end.
Starting a day care center may seems difficult but in reality, it is an easy business to start which if properly done, one can establish a passive and steady income from.
So if you enjoy playing with kids, you should start a day care center where you will be taking care of children of various ages.
Interestingly, most household now requires two separate incomes to successfully run the family affairs and as such, the need for well furnished day care centers has drastically increased.
While there are numerous guides on how to start a daycare center with no money successful, this piece will only highlight the major needs and requirements to establish a profitable day care center or a babysitting business.
Also read: How to start a business when you are broke
Requirements for starting a day care center.
The following are the major requirements to establish and run a successful day care center from the scratch.
Obviously, starting a day care center or a babysitting business requires you to have enough patience with kids of varying ages.
- Good communication skills
As a babysitter, you must posses a strong ability to effectively communicate with parents. After all, they are your target and ideal audience, having a good rapport with them will take your day care business a long way.
To run a day care center from nothing to something, you must be dedicated. Dedication is one of the key component to run a successful small business.
Options to Opening a Daycare
No matter what type of investor you are, there are several different options to consider when opening a daycare center. Your decision will determine how much support you need, how much creative freedom you have, and even the direction of the programs you offer.
No matter which option you choose, finding the right partner is critical to ensure your success.
According to Child Help Business, three options for opening a daycare include:
- Buy an existing center
- Start your own brand
How to run a successful day care center
It doesn’t matter whether your newly established day care business is being run in your living room or in a retail location, what really matter the most is you providing quality in running in your business.
You may like to read: How to start a vending machine business
So if you care to run a successful day care or babysitting center where kids will find solace and comfort, then you need to obey the following advice:
1. Teacher’s Role
Other than babysitting the kids, you need to take up a teacher role actively in your day care business center; doing this will contribute immensely to the business success.
Dedicate a certain day and time to play around with the kids, read fascinating story book to there hearing, prepare snacks and palatable meals for them and monitor them closely during nap times.
Other than being involved in the children day-to-day activities, you should be able to plan their daily routines as well as curriculum around the normal schedule of eating, playing and story telling time.
Keeping all your things well arranged and organised is very crucial too. This means having a certain places for materials like books, toys plus other similar items.
As part of your teacher’s role, you should be monitoring the children closely to see if any of them need medical attention or medication where necessary or see to it that avoid certain foods — where applicable.
Ensuring the children’s safety, protecting them and others are the extra role you need to inculcate in your day care business for it to be a successful business enterprise.
You may want to read: How to start a babysitting business
2. Start Small
Starting a home-based day care service requires some investment capital, depending on the business scale. The biggest cost, however, may be in making some changes to your living home for safety purposes.
So if you will be starting a day care service in your home for the time being, you need to make some changes in your home.
Read also: How to start a travel agent business
Changes like putting child safety locks on every cabinets in your house, hanging a fire extinguisher, childproofing electrical sockets, first aid kit, tighten up sharp objects like knife, placing soft carpeting etc. to the proposed day care room.
If you do all these necessaries, your journey to starting a successful day care services will be a success in no time.
In some states in the U. S, having certificates on first aid training, pediatric CPR as well as some other child development training are the basic requirements for running a legitimate day care business.
If you take a close observation, you’ll come to realize that all these requirements are really needed to ensure the safety of the children that are under your care.
Other than the aforementioned requirements, you still have to embark on a research in respect to your state requirements pertaining to starting a day care center.
Every state out there have their own set of rules and guidelines which you must meet before you can be granted the license to open a day care center.
Moreover, apart from having the child care plus first aid training, to open this kind of business, some typical requirements also include health permits, fire permit and/or a business or working permit.
Hence, visit the licensing agency in your local government to know better as such background survey may prove to be necessary.
The last on the list of the necessary things you need to know before starting a day care center is creating of awareness. You need to market your day care business for your ideal customers to know about it.
Awareness can be created using different and many strategies depending on your business scale. You can create awareness using the social media platforms like Facebook, Instagram etc. to advertise your day care service.
You can equally use fliers and word-of-mouth referral in your community so as to reach your prospective customers fast.
15 Steps to Starting a Daycare Center
Starting a small business in general is always a journey. While we’ve outlined a few steps to getting your business up and running, know that there is no one “right” way to achieve success. You’ll learn many lessons along the way and are likely to pave your own path.
That said, according to FreshBooks website, here are 15 steps to starting your daycare center, even if you have zero experience.
1. Learn About Daycare Licensing Requirements
You might have started off as a babysitter or a nanny, but in order to start a full-on daycare business, you need to meet the proper licensing requirements in order to be legal. That way, your daycare will be legitimate and you won’t run into any legal trouble accepting children into your care.
A good first step is to contact your state’s Department of Children and Family Services (DCFS) to learn about their specific regulations for child care providers. Another option is your local area’s child care licensing agency. You can usually find this information online.
To obtain a license to start a daycare center, you’ll also need a current CPR certification, a clean driving record and additional documents that prove your commitment to providing quality child care. Don’t be afraid to ask your local agency questions to ensure you’re satisfying all requirements.
2. Consider Taking Early Childhood Education Classes
While you don’t need to have professional child care experience to start a daycare business, having some understanding of early childhood development is strongly encouraged. You’ll be caring for young lives, so you need to know how to provide the right kind of support and care.
Getting a degree is early childhood education is a good place to start. You can typically find classes in-person at your local community college or online. Through this degree, you’ll gain a greater understanding of how children think and behave, and what they need in order to be properly cared for.
Beyond that, you’ll have the skills to set your business apart from your competition. You’ll be better prepared to offer the services parents are looking for and keep them coming back time and time again.
3. Create a Daycare Business Plan
In starting any type of small business, it helps to have a business plan. Having a business plan helps you set tangible goals for your business, organize your business structure, outline your services and so much more.
In your daycare business plan, you’ll define your daycare’s mission statement, operations and procedures, staffing and budget. This business plan works to keep you on track and striving toward success.
Consider how you want your business to be organized for you plan. Will you be solo or hire staff? How will you secure funding? Will you offer services beyond child care (like tutoring)? For help in creating your business plan, check out this detailed guide from the U.S. Small Business Association.
4. Find a Location for Your Daycare
If you plan on running your daycare out of your home, this step should be pretty straightforward. If not, you’ll need to find a location for your child care facility.
Many recreational centers, churches, local businesses and even schools have space available to host a daycare, typically for a monthly fee. Search online, in your local newspaper and within your network to find options in your area.
Once you’ve found a good fit, you need to check your city’s zoning laws and licensing guidelines to make sure your chosen location is compliant. That way you can avoid some legal headaches down the road.
Ideally, you’ll need to find a location that’s centrally located, easily accessible and child-friendly. Consider what children and their parents will be looking for in a child care center. You might not find the perfect option, but you can make it work with a little TLC.
5. Get Insurance
Most daycare centers need several types of insurance in order to keep children (and their businesses) protected. These policies typically include liability coverage, property, workers’ compensation and business insurance.
Not sure what type of insurance you need? You can always check with your local child care provider licensing office for guidance.
6. Seek Out Grants and Funding
As we covered already, there are certainly costs associated with starting a daycare. If you don’t have the money you need to cover your initial startup costs, you’ll need to get creative when it comes to acquiring funding.
There are many grants available to help you cover your startup costs. You might also consider taking out an SBA loan or doing community fundraising. Know that the goal is to use these funds as an investment that will yield profitable returns in your business.
Costs Associated with Starting a Daycare
There are several things you’ll need to buy or lease in order to get your business up and running for day one. These expenses include but are not limited to:
- Renting a daycare space
- Indoor and outdoor play equipment
- Art supplies
- Cleaning supplies
- Child care supplies (like diapers and wipes)
- Business laptop
- Licensing fees
- Food (for snacks/meals)
- Bottles, cups, plates, utensils, etc.
- Car or reliable transportation (optional)
You might think of some additional items you’d like to have at your daycare. Over time, you can use the revenue coming in to help cover these expenses and invest in better equipment/supplies. It’s OK to keep things simple and then scale your way up.
7. Prepare Your Daycare Center
Once you have a location secured and the proper materials and equipment in place, it’s time to prepare your daycare center.
First, clean your facility and sanitize with an effective disinfectant. Then, take the needed steps to childproof your daycare according to the ages of the children you will be caring for. Follow this childproofing checklist for help.
Finally, set up play equipment and lay out toys. You might decide to use storage boxes to keep everything organized. You can always rearrange your layout according to your needs.
Is your daycare ready for service? Give it another once-over and you’re ready to open your doors for day one of business!
8. Draft up a Contract
As a small business owner, having a contract is always a good idea. The parents that come to your facility are essentially your clients, and you want to have a solid contract in place to protect yourself from any legal issues.
We recommend seeking out a trusted contract lawyer to draft up a contract according to your needs and unique business requirements. Your contract will then be used to outline your expectations for your clients and their children.
Here are some important questions to consider when creating your contract:
- How do you expect to be paid?
- How will you handle late payments?
- What time should parents pick up their children?
- Are there consequences for late pick up?
- What services will you provide?
- What is your policy when it comes to sick children?
- Do you offer refunds? If so, under what conditions?
- What happens if a child is injured at your facility?
Whether you seek help from an attorney or write the contract yourself, you should have a contract in place before accepting business. Once signed, you can then send professional daycare invoices to get paid by your clients.
9. Establish Policies and Procedures
Establish policies and procedures for the families that attend your daycare and your staff. These procedures may include an emergency plan, safety procedures, privacy protocols and rules for your facility.
Having these procedures in place will help you keep the children safe and protect yourself from liability (in some instances). In establishing your policies, be sure to review your local child care licensing requirements to ensure compliance.
10. Research Possible Tax Credits
If you’re opening an in-home daycare, you may be eligible for certain tax reductions based on the fact that you’re using your residence for business purposes. This means you can essentially write off a portion of your housing cost. This can be the case even if your daycare space serves as a family room after hours.
11. Hire Staff as Needed
When you’re first getting started, you may just be a company of one, as you might want to save the cost of hiring unnecessary help. But over time, you may need to hire help to take care of the kids during the day.
This is especially true if you find yourself running up against the required ratio of staff to children, as outlined in your local daycare licensing requirements. Be sure to review these to make sure you have enough staff for the number of children you plan on caring for.
Also, make sure all child care staff undergo criminal background checks and provide references to ensure the safety of the children. Make your hiring decisions carefully to keep your facility safe and maintain a stellar reputation.
12. Market Your Daycare
You have your daycare set up and open for business, now how do you get families in the door? As with any small business, you’ll need to market yourself to attract potential clients.
There are many ways to market your daycare. One method is to create flyers and post them around your local community—at businesses, schools and coffee shops. You can also run paid ads on Google or Facebook to draw in families from your local area.
To establish your daycare as a professional business, consider building a website that provides more information about your services. A basic website can cost anywhere from $10 for a WordPress template and set up, to $2,000 or more for a custom design.
With a website, you can then use search engine optimization (SEO) to attract organic traffic from Google. That way, when families search for a daycare near them, your business is likely to show up in the search results.
13. Promote Your Daycare on Social Media
Another effective marketing tool for daycare centers is social media. Platforms like Facebook, Instagram and LinkedIn can be used to promote your business and draw in potential clients.
Create a business Facebook page to post more information about your daycare, collect client testimonials and keep families up-to-date with events at your daycare. You can also post on Instagram and LinkedIn, with targeted hashtags, to attract families in your area.
As your business grows, you might decide to invest in paid marketing services. A digital marketing agency or consultant can help you increase your business’s presence online, outrank your local competitors and attract new clients.
14. Provide Top-Quality Care
The success of your daycare depends on you providing top-quality care to your families. If the kids at your facility are properly cared for, and, even better, enjoy coming to your daycare, you’re likely to attract more referral business.
Positive reviews can work wonders to attract new clients. Ask families to review your business on Facebook, Google, Yelp and other review sites to improve your daycare’s reputation in your community.
Always look for ways to improve your daycare. Ask families for feedback, invest in additional education and hire fantastic staff to make your daycare the obvious choice for families in your area.
15. Manage Your Business Finances
Many small businesses fail due to poor money management. If you want your business to succeed, you’ll need at least a basic understanding of business accounting and how to manage your expenses.
Staying on top of your business finances is more than just tracking revenue in and expenses out. You’ll need to plan for taxes—typically around 30% of your revenue, after expenses—and make informed decisions when it comes to how you’re going to allocate your funds.
Professional daycare accounting software can help you send invoices, track revenue, manage expenses and more. It can even send reminders to parents for late payment and accept credit card payments with ease.
The more you know, the easier it will be to make smart financial decisions. Stay on top of your business finances so your business is not only surviving but thriving.
Can You Start a Daycare from Home?
Yes, starting a care center from your home is an option and may even be the more affordable option. This is because there are different options at the local, state and federal level that provide grants and funding to in-home daycare centers.
If you already have the space to run a child care business out of your home, it’s worth looking into Small Business Administration (SBA) loans to help you fund your endeavor. Remember, at the end of the day, you may be eligible for tax cuts and other benefits.
How Much Does It Cost to Start a Daycare?
According to small business website bizfluent.com, the average startup cost for a daycare center is $10,000 to $50,000. This can vary widely depending on whether you’re opening a home-based daycare or leasing a separate facility for your care center.
If you don’t have $10,000+ in your bank account, don’t worry. There are many grants and loans available to child care businesses. In fact, some local businesses will offer financial incentives to support budding child care centers. Consider reaching out to your community for support. (Source: Freshbooks.com)
Starting a day care center is a profitable business idea that you can convert into a steady and passive source of income.
Just take heed to the above advise on how to start a successful day care center and your new venture will be a success.