Daycare business is a very lucrative and profitable business venture. In the past it was common for parents to stay at home with their children during the day, therefore childcare centers were seen as more of a luxury than a necessity. Today, it is estimated that only one in every three children stays at home with their parents during the day. Challenging economic and financial times have prompted many parents to seek employment. In this regard, in most homes, both parents rarely have time to spend with their toddlers. This has led to increased demand for childcare services. Therefore, the daycare business is one of the most lucrative in the world today. With parents becoming busier and children being born every day, it is unlikely that you will struggle to find clients for your daycare business. However, before starting your own business, there are some important things to note. This article explains how to start a profitable daycare business.

What you need to start Daycare Business

Market Research & Staff

While childcare services are in high demand, it is important to note that there are many other daycare centers already in existence. Thus you have to carry out a market research. This includes assessing the demand and supply of daycare centers in your area. As part of your market research, you should interview your potential customers i.e. talk to several parents and families, asking what kind of daycare services they could benefit from. Identify the daycare center businesses which are already operating in your area i.e. your competitors. Note their strengths and weaknesses, and plan on how you can distinguish yourself from the competition. Ways of distinguishing your business include the kind of facilities at your daycare center, and the nature & quality of services which you offer.

Part of your staff should have a degree or diploma in Childhood Education. This will make your daycare center business look more professional and will give your staff valuable insights into how childcare centers are run. There is also need for  a good daycare business plan. You will also need to determine the the type of business entity your daycare business will be. There are several different types of legal structures for your potential business, each with its own benefits and drawbacks e.g. corporation, private limited company or sole proprietorship.

Premises & Equipment

There is need to find a suitable premises to house your daycare center business. The premise you settle on should have sufficient square footage for children to play, eat and sleep. Also, it should be big enough to make it easy to separate kids into different age groups. If you are thinking of hiring employees, consider the space they will occupy and also the space that will house the toys, furniture, and storage. An ideal premise to select for your daycare business is one that is near public transportation and major roads. Other requirements include toys, children books, arts and crafts materials, furniture, and equipment for your planned activities. There is also need of safety devices (e.g., first-aid kits, carbon-monoxide detectors, smoke alarms, fire extinguishers, child-proofing supplies, etc.). If you decide to offer transport services to your customers, you will have to buy of hire a bus.

DayCare Business

Daycare Center


To ensure that your business adheres to the law, it is important that you get a license. You should consult your state’s Department of Children and Family Services for the licence requirements. Medical testing and clearance may be required as well as a clean driving record. All in all, you will need to demonstrate that you can handle children and that your facility is safe for children. It’s also better to have a website for your daycare center business.

The capital required & expenses for Daycare Business

One of the most important factors to consider when starting a business is seed capital. For a daycare business, you will need to have a substantial amount of money. This money will cater for the premise to be rented and the paperwork to be done when applying for a license. Also, you will need to draft a budget for your business. When drafting a budget be sure to reserve a certain amount of money for future monetary needs.

When drafting a budget, it is important to consider how many employees you will be hiring and whether you will be renting space or using already existing space either in your house or in your commercial premise. Also, calculate the amount of money you will require to spend on furniture, toys and other equipment. The amount of money will vary depending on the nature and size of your daycare center. The budget you prepare should also accommodate any safety features that may be necessary to install in your premise as per the safety standards prescribed by state authorities. This may include smoke detectors, fire extinguishers, locks on medicine cabinets etc.

The expenses for operating daycare center business include rent, wages, transport, advertising, licencing, insurance, food and utility fees. So the expenses of running a daycare center are quite substantial; however, so are the profits that accrue from your business. Your revenue will come from the money which the customers pay for their children to come to your day center. When you follow all the requisite legal avenues without cutting corners, you will be able to recoup your investment within a short period of time.


Daycare playground

Tips on running a Daycare Business

The child care service industry is estimated to be a $ 20 billion industry. This lucrative industry has grown exponentially over the last couple of years as the number of working mothers has increased. Statistics indicate that 45% of children are cared for in child care centers. Thus, starting your own child care center can be a hugely rewarding venture. However, rewards will only come if your center is run appropriately.

To be successful as a daycare business owner, it is important that you hire qualified and well-trained staff. When hiring staff for your business, it is important to outline a clear criterion to follow. This criterion may include experience working with children, education background, and a clean criminal record. Another important tip is to ensure that each one of your clients signs a contract. This contract will outline what services your business will be offering as well as the fee. The contract should also include a policy statement.

As with any other business, it is important to maintain books of accounts that show clearly how much money you spend on running the business. The financial statements should also indicate how much profits your business makes. Also, do not mix business and personal funds.  To attract more clients through referrals, ensure that all children in your daycare are well cared for nurtured and play in a safe environment. The primary customers of your daycare center will be working mothers and small families that want a place where they can leave their children.

Benefits of running a Daycare Center Business

There are many reasons why starting a daycare business is a hugely rewarding venture. The demand for child care services is on the increase. The number of women in their childbearing years joining the labor force has increased and will continue to increase. Every year millions of children are being born. Thus your daycare business is assured of customers.

Working with children can be stressful. However, given that children are usually honest, working with them can be a breath of fresh air especially if you have worked with adults in the past. Therefore, apart from being a highly lucrative business venture, starting a daycare business is also emotionally rewarding. This is especially true since you get to learn and understand human development and different human personalities. Starting a daycare business is challenging; however, this is something that applies to all businesses. Additionally, you will recover the money you invest when starting the business once your center is up and running.

We wish you the best in your Daycare center business! Check out our collection of business plans , and more business ideas