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May 24, 2022

The Step by Step Guide of Starting Your Childcare Business

Step by Step Guide on Starting Your Childcare Business


Starting a childcare business is a big decision that can be very rewarding on many levels.

Working with children is a gratifying experience as such. In addition, by opening a daycare, you are making a difference in the local community, becoming an essential part of local families’ support system.

It allows you to enjoy the flexibility of owning a business instead of working traditional day hours. Also, starting a childcare business can provide financial autonomy and control over your income. 

However, to get a successful daycare underway, you need to carefully think through the necessary steps towards starting your childcare business. 

So, here is a step-by-step guide you might want to follow when starting your childcare business. 

  • What Inspires You? 

It is important to consider your reasons for starting a childcare business. Ask yourself what inspires you to open a daycare. Is it your love and passion for kids, desire to utilize your professional skills and knowledge, or help families in your community? Maybe you want to offer high-quality early care and education for children? Or do you see starting a childcare business as a lucrative business opportunity?

It is important to consider your reasons for starting daycare. These reasons provide a solid motivation to reach your goal.

  • Childcare Business Options

One of the first things to consider before starting your daycare business is whether you will open a group childcare home or a commercial childcare center / early learning center.

The main benefits of starting a childcare center from your home involve convenience and low cost. However, depending on the legislation in your state (the US), province, or territory (Canada), you may or may not need to be licensed to start home childcare. Whether your home-based childcare needs to be approved or not often depends on the number of children you will care for. 

This is also the most affordable childcare business option. In addition, there are various state and federal grants and funding to home-based childcare centers available depending on where you live.

Suppose you plan to open a licensed childcare center. In that case, you should consider services you will offer to families such as full-day childcare, part-time programs, school-age programs, nutritional meals, transportation, age-appropriate curriculum, summer and vacation camps, etc. 

Childcare centers are larger and involve a program of supplementary care for larger groups of children outside of their homes regularly. 

How to Transition from Home-Based Daycare to a Commercial Facility?

As word spreads and a good home-based childcare business grows, owners are faced with the decision to limit their business or embrace the opportunity to grow their business to serve more families by opening a commercial early education and childcare center. Opening a commercial childcare center for the first time may seem like a distressing process. 

However, if you are well informed and understand all the steps, opening your first childcare center should be as rewarding at it is stressful. 

One of the main differences between home-based childcare and commercial education center is the setting. While you run your home childcare from your home or other residential space, center-based childcare is operated in a commercial space.

Home childcare owners are responsible for:

  • Looking after a small group of children in their care
  • Providing meals and snacks
  • Ensuring children rest
  • Supervising outdoor play
  • Communicating with parents
  • Keeping the daycare environment clean and sanitized
  • Handling administrative duties

On the other hand, childcare center directors or owners are responsible for all aspects of their center operations and program. Being a childcare center director entails a list of duties such as the following:

  • Obtaining initial financing
  • Preparing budget and handling finances
  • Handling childcare center promotion
  • Recruiting and training staff
  • Designing program plans
  • Supervising and guiding staff
  • Marketing the center to new prospective parents
  • Communicating with parents
  • Coordinating with suppliers
  • Supervising daily activities


As a home-based childcare provider, you can offer flexible hours or services in non-traditional hours. Based on staffing and budget constraints, commercial childcare centers may have more strict opening and closing hours. They also have regulated schedules for children’s mealtimes, naps, playtime, outdoor time, art and craft/sensory time, and more. 

Home-based daycares typically charge less than commercial center-based facilities. 

As a center director, you will find that you will have to charge more to cover additional overhead expenses such as rent, staff salaries, insurance policies for employees and children, curriculum, etc. 

  • Child Care Licensing and Training: Getting Informed and Applying

Before starting your business, learn about childcare training and licensing requirements and apply for licensure, if applicable. 

In the US and Canada, childcare businesses are regulated at the state, province, or territory level. In other words, your state (USA), province, or territory (Canada) is responsible for regulating and licensing childcare services in line with their legislation and regulations. 

So, you will need to apply through the appropriate regulatory agency in your state, province, or territory and meet these regulations to obtain the license. 

When you learn what type of license you are applying for, you will need to complete an application packet and obtain local approvals (local health, fire, building approvals, etc.).

Also, depending on your place of residence, local childcare licensing regulations may require you to meet specific requirements for certifications, training, and education. Contact your local childcare licensing agency to learn more about these requirements.

  • Develop a Childcare Business Plan

Writing a childcare business plan should involve:

  • A mission statement for your business (vision, values, etc.) 
  • Your childcare center name and location
  • Your childcare business description and goals 
  • Outline a market analysis and marketing plan
  • Define services provided

  • Outline Organization and Management

Describe the legal structure of your childcare business (whether you will be the only owner or you will have a partner) and outline information about managing your business, such as the following: 

  • Enrolment policy (requested licensed capacity and ages of children you will accept)
  • Schedule of operations
  • Marketing plan
  • Organizational plan
  • Budget
  • Insurance policies
  • Operations
  • Nutrition and meal planning
    • In-house
    • Catered
  • Bus Transportation (optional)
  • Staffing 
  • Safety 
  • Security plan
  • Emergency protocols

  • Prepare Your Childcare Facility

Once you decide on your daycare location, get furniture, toys, supplies, kitchen, and safety equipment. Set up play equipment, clean and sanitize your facility, and take steps to childproof the daycare. Security and safety are paramount in a modern childcare facility. Consider the following options based on your facility and location:

  • Staff and visitor ID badges
  • Automated door locking / access control systems
  • Entry and exit sensors
  • Automatic lighting systems
  • Video monitoring
  • Security system
  • Smoke detectors and fire extinguishers
  • Carbon monoxide detectors
  • Covid-19 / temperature stations
  • Metal detectors
  • Contactless Check-in / Check-out stations

  • Develop Policies and Procedures

There are childcare forms and templates available to help you outline policies, procedures, and handbooks for staff and families. Your daycare business policies and procedures should include:

  • Admission requirements
  • Parent agreements
  • Parent involvement 
  • Attendance records for staff and children 
  • Closing time policy
  • Medication policies
  • Nutrition protocols
  • Personnel policies 
  • Supervision policy

  • Hire Staff

The next step involves staffing your daycare business with qualified childcare providers. Provide a positive working environment, training opportunities, and competitive pay to motivate employees and reduce staff turnover.

  • Market Your Childcare Business

Your business will need marketing and an online presence to attract potential clients. Advertise your daycare through local companies, childcare websites and blogs, and local parent groups. Create flyers and post them around your community, build a website and start a social media campaign focusing on your target population. 

  • Automate your Childcare Business

Finally, a commercial childcare and early education facility will require detailed management of all aspects of the business. A high-quality purpose-built CMS (Childcare Management System) will simplify the complexities of running your business. It will assist you in all aspects of the business from acquiring and retaining new families to enabling your teachers and staff to be the best educators and caregivers they can be. 

  • Customer Relationship Management
    • Inquiries
    • Tour scheduling
    • Waitlist management
  • Enrollment and Attendance
  • Staffing and optimization of rooms and programs
  • Automated billing of tuition, security deposits, activity fees, subsidies, scholarships
    • Elimination of collections problems
  • Curriculum and milestones
  • Parent messaging and daily newsfeeds with pictures of children and activities
  • Robust reporting capabilities
    • Children
    • Staff
    • Marketing
    • Enrollment
    • Financial and compliance


Starting a childcare business can be both a rewarding and challenging process. However, if you are well-informed, have a clear vision, and follow specific steps, this process will be much easier. 

Hopefully, this guide provides helpful guidance and support on your childcare business journey. 




Diana Vasquez

Diana is a blog writer and early childhood education content specialist at Kindertales.

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