If you want to know how to start a home daycare, this article will really help.

It reveals the necessary steps to take when starting a home day care and exactly what will help you succeed!


Many single-parent and two-parent homes often struggle to make ends meet. Typically, they are on the horns of a dilemma.

That dilemma is that they need to work and have the income coming into their home.

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The other part of the horn is that to work they need to find a qualified daycare that will care for their children while they are at work.

Consequently, it seems like a lot of these families tread water in that what is coming into the household through income is immediately going out of the household to pay to have someone care for their children while they work.

It’s like a no-win situation.



Perhaps, there is an answer.

That answer may be the starting of a daycare within an individual’s home for these struggling households.

The benefits of this particular plan of action would, it appears, be the solution for both issues raised by the need to work and to have a quality daycare experience provided for the children.

Specifically, by opening up a daycare in the home not only will you be providing for your children but you can speak to other family members in your neighborhood.

Your business will provide an optimum daycare experience for the children of working families, care for any children in your home, and earn a business income.

In other words, there will be no expenses associated with your child being in daycare and your new job will be as a caring and confident childcare operator.

A no-win situation turns out to be a win/win situation.

It is important to note that of the 50 different states and their daycare requirements, as of this writing, 26% of those states require that home daycares apply and obtain a license to operate.

Therefore, it is important to check the daycare laws, rules, and regulations concerning the operation and legal requirements for operating a home daycare in your state of residence.


Personal Story

The role and employment position of a daycare worker is not for everyone.

A daycare operator needs to come with a certain set of skills that will allow for them to safely care for the child in a nurturing environment.

Sometimes, crying can be a little bit annoying.

However, it is not outside the realm of possibility as I know a young father of twins who were in this situation.

His wife was working but he was having difficulty finding a job.

Even if he did find a job they found that when they crunched the numbers it would not have been financially feasible to put their twin daughters in a daycare, go to work and come out ahead financially.

So together the family opted to convert part of their home into daycare and successfully brought on children within their neighborhood as well as caring for the twins during the day.

Everyone, it appeared, was happy with the situation as the children were cared for, income presented itself into the household and the neighbors were given a beneficial rate for the children that attended the daycare.


11 Best Tips to Help to Start a Home Daycare


1. Have a Business Plan

You’ve decided to start a daycare. Good for you!

So, what’s the plan?

As with any business venture, one of the critical foundational components of operating and succeeding in a business is to formulate a business plan.

A business plan is an extensive and comprehensive document that outlines what the business is all about and how it will be successfully operated.

Components of the business plan include an executive summary, marketing plan; financials that reflect income and expense, what the vision and mission are of the venture, employees that will be utilized, etc.

To help with this process there are many generic templates available on the Internet or one can go to the Small Business Association website. That website can be located at www.sba.gov.

It is also important to check within your community any restrictions that may prevent you from operating a business within your home.

Therefore, it is important to look at zoning laws as implemented by the city government.


2. Have a Legal Structure

As part of your business plan, an important decision to make is what legal business model structure you will operate under.

Two examples of a business model will include sole proprietorship and an LLC.

The reasons for forming a specific legal business model include the possibility of receiving financial support from banking institutions and the need for obtaining any required state business licenses or permits.

As a limited liability company implies, this legal structure formation of a business helps the individual to protect their assets if the company is involved in any litigation.

Therefore, the individual forming a daycare should do their homework in regards to the formation of their daycare company.

It is important to do one’s research and weigh all of the pros and cons associated with the different offerings.


3. Come up with the Right Name

To form your business and register with the state as a legally operating company, a name for the daycare needs to be chosen.

The name of the company should reflect what services your company offers.

It would seem that for daycare it should be a warm and inviting child-enriching name that will resonate with the parents.

Also, your name selected for your daycare business must be unique. Therefore, you can do online searches for names of daycares to avoid duplication.

Also, the various city governments have resources that will identify any duplicates and allow for you to register your unique name.


4. Investing

Starting a business can cover a broad range of financial investment needs.

It would seem that for a daycare, an investment of safe children’s toys, various changing tables, and playground equipment may be part of the inventory needed to meet the needs of the family clients.

With your business plan in hand, a new business owner can often approach a financial institution and “pitch” their business venture and ask for a startup loan.

Also, the financial institution may offer a line of credit to help with initial expenses and give the company a good start in offsetting expenses and meeting the financial demands.

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If finances are limited, one can always go to garage sales or look at classified ads in their local newspaper to find good used daycare equipment that will certainly meet the inventory needs of the daycare startup.

Related: How to Buy a Business with No Money.


5. Insurance

As with any business that operates in the public, insurance needs should be anticipated and coverage should be purchased.

It is best for the owner of the daycare to work with their insurance agent and identify the needed policies and comprehensive coverage required so that potential risks associated with the daycare operation are addressed.


6. Budget

Operating any business requires that proper oversight of the financials is in place and adhered to.

The first order of business, and as part of the business plan, is to construct a practical budget that will capture the anticipated streams of revenue as well as the expenses that will be incurred by the business.

Of course, on the income side of the ledger, will be the daycare fees that are collected from the parents, any grants received, etc.

Also See: Importance of a Budget and Best Budget Planning.

On the expense side of the ledger, it is important to capture any salaries and benefits that will be provided to employees, overhead costs such as rent, utilities, phone or cellular service, equipment, insurance, etc.

It is important to build into the budget a profit for the business.

This can be accomplished by looking at your fee structure and adjusting it accordingly to add in 15 to 20% additional costs to the fees to help with the profitability.


How to Start a Home Daycare


7. Licensing

As 50 different states comprise the United States of America so maybe the licensing requirements to operate a home daycare in your state.

Therefore, some of the states may require the individual contemplating a home daycare to, first of all, attend an orientation.

Secondly, most states would require that the individual be familiar with home daycare licensing laws and the regulations that manage these home businesses.

Of course, as with all bureaucracies, there may be several documents that need to be filled out and submitted.

Additionally, some states will, because of their commitment to protecting children, schedule a home visit to inspect your potential home daycare facility.

It is also important to remember that other permits and licensing documents may need to be obtained.

Some of those documents could include the need to have a business license or other required permits.

Also See: How to Make Money on Upwork and How to  Make Money as an Illustrator.


8. Focus

As a new daycare business, it is important to determine and advertise your daycare as to what children you will be enrolling.

For example, will you enroll children that are still in diapers or will they need to have been potty trained?

Another example of children that you will be caring for relates to age.

Will you be taking six-month-old children up to three years of age or will your age requirement be more restrictive?

Additionally, some special needs children still need the protective service of a quality daycare as their parents go to work.

Will your daycare structure and experience allow for you to provide the needed attention for children assessed with special needs?

There is also an expectation from parents that their child will not just simply be babysat.

Therefore, will your daycare offer some sort of pre-learning curriculum such as reading stories, doing some preliminary math exposure for the children, etc?

To help in this process, it would be important to have a professionally done brochure made for distribution to provide an outline for parent customers to understand what your daycare operation will provide.

The brochure should also contain other valuable information such as your experience and credentialing, hours of operation, fee structure, assessment of late fees, etc.

The brochure should also capture your philosophy of the daycare experience for children and their families.

Also See: How to Get Paid to Be a Foster Parent and How to Start a Doggy Daycare.


9. Safety

Another critical component of starting and being successful with a daycare operation is attention to safety.

The daycare area should be childproofed.

This includes plastic coverings for the electrical outlets, latches on any cupboards to prevent curious fingers from exploring, policies and procedures in place that protect the children from unauthorized adults picking them up, emergency medical information, etc.

In addition, the daycare should have a safety plan in place in the event of a fire or other crisis.

This evacuation plan should be fully understood by those working within the facility and visited regularly.

Also, as part of the emergency evacuation process, regular drills should be held to practically demonstrate everyone’s knowledge about what to do in the event of an emergency.


10. Accounting

Having a software package that will help the owner to record the income and expenses and generate various reports is advised.

As it relates to finances it is important to remember that, depending upon your business model, you will be able to deduct the expenses associated with the business as reported to the IRS.

Therefore, it is important that what belongs strictly to the daycare and its use should not spill over into the personal life of the business owner.


11. Hiring

Depending upon the size of your daycare and what your occupancy limitation is, additional employees may need to be hired.

Therefore, when it comes to hiring these individuals, it is important to know what daycare certifications have they earned and what is their educational experience.

Also, it is important to know what is the student-to-teacher ratio and to ensure these ratios are adhered to.

Especially difficult to maintain these ratios is during times of needed breaks and lunches for daycare staff.



Starting and continuing to succeed as a home daycare can be a daunting task but it can be done, if you know what to do and do the right things, as explained in this article.

Although it is a business, the product is more than just a commodity. It is a valuable service that is rendered to informative young lives and their families.

The business requires a considerable amount of trust placed upon the daycare and its workers.

In addition, to provide this service, the owner of a home daycare has to have the ability to successfully understand the ins and outs of running a business and to make it profitable.

The reality is, however, that at the end of the day upon the successful completion of rendering this valuable service, the owner can relax and enjoy the realization of having a powerful impact upon the current generation of children and future generations.

Again, this company has paid $25+ million to members:

SurveyJunkie (only USA, Canada, Australia residents allowed). You can earn money sharing your thoughts. They have already paid $25+ million to their 20+ million members just for sharing their thoughts and opinions. Click here to join SurveyJunkie for FREE