8 (Often Overlooked) Steps to Opening a Daycare

How to open a daycareYou’ve been “Mom” since you can remember. Healthy snacks, educational games and nap time routines—you’ve got ‘em all down. But now you’re ready to take the next step.

You want to open a daycare, and now’s the time to do it. Fewer than 1 in 3 toddlers stay home with a parent during the day, as the number of single-parent homes continues to rise and more dual-parent homes require dual salaries.

These families need childcare providers that are caring, confident and competent, which is where you come in. Being your own boss can provide the freedom and space to go back to school, earn a degree and pursue a career you love. But where do you start?

There’s a lot of info out there for folks who want to open a daycare, but a lot of the important details are overlooked. These eight steps will provide a handy checklist of things you can’t afford to ignore when it comes time for you to take that step. 

Step 1: Earn a degree

This step is important for anyone looking to be a small business owner and if it’s a daycare you’re after, an early childhood education leadership degree is the place to start.

A degree is more than passing grades and a signed piece of paper; it’s about distinguishing yourself among your competitors. It’s about gaining the knowledge and experience from professionals who have gone before you and the insights from peers walking next to you.

It’s the peace of mind knowing you’re making decisions that will benefit your business down the road and attract those who are looking for what you have to offer. As you start your journey to opening a daycare, don’t let this first step be one you overlook.

Step 2: Look into licensing

Maybe you started small—occasionally watching a neighbor’s kid or babysitting your niece and nephew. But now you want to expand. Before doing anything, be sure you have the correct license to be legal.

Start by looking into the local childcare licensing agency's website. To obtain a license, you may need a current CPR certification, an unblemished driving record, a recent physical from your healthcare provider and other documents that demonstrate your commitment to children. Gathering all of the necessary documentation can be time consuming, so be sure to plan ahead.

Step 3: Create financial goals

This is a must for anyone looking to open a small business. But especially when you’re hoping to build a childcare facility, it’s important to remember you’re not dealing in hiccups and hugs. You need a plan. 

You need to know exactly where the money is coming and going to be sure you’re profitable. Be sure to consider these basic questions:

  • What are your anticipated start-up costs?
  • Do you plan to hire an employee?
  • Do you need to expand a room in your home?
  • Do you need to purchase bedding? Additional toys? How about high chairs?

Also, be sure you don’t underestimate the cost of things like licensing, inspection and zoning! When you know what you’ll be spending from the get-go, you’ll be able to create goals for when you hope to break even and when you hope to start seeing your wallet plump up.

Step 4: Check into tax credits

If you’re planning to open the daycare out of your home, you may be able to claim a tax deduction on spaces used for businesses purposes—even if the space doubles as your family room when your tiny clients go home for the night. This is a simple yet wonderful way to cut costs and should not be overlooked!

Step 5: Seek out scholarships

Even if you start small there are always going to be start-up costs. But, there are several available grants to help you compensate for those costs. Some of these scholarships also provide additional education in areas related to child development. Yet another way to distinguish yourself among other childcare providers!

Step 6: Conduct market research 

Keep in mind that your goal is become a small business owner, not just a surrogate mommy. It’s important to know who your competitors are, where they’re located and the exact services they provide.

You should familiarize yourself with the demographics of your city, town or neighborhood and figure out the most common times childcare is needed. For example, would it be advantageous to offer pre-school in your daycare? Or, would an organic or vegan or kosher menu give you an edge? 

Do your research and be sure that something—i.e., location, business hours, menu or services provided—sets you apart.

Step 7: Create a contract

Once you’ve figured out the details regarding hours of operation, services provided and menu options available, write up a contract that clearly outlines what you will provide and your expectations for your clients. Some sample questions include:

  • What time do parents need to pick up their children?
  • Are there consequences for being late?
  • What services will you provide and what additional costs will you incur? (e.g., you provide diapers but parents provide formula, etc.)
  • What is your policy for sick children?
  • How often will close due to weather?
  • How will you handle late payments?

You can find several websites online to help you write your own daycare contracts. Alternatively, a childcare attorney can advise on the elements of your contract.  Whether you seek legal advice or write it yourself, make sure you have a childcare contract in place before seeking clients.  

 Step 8: Market yourself

This is a simple yet overlooked path to success. Post flyers for your business in local libraries, community centers, coffee shops and grocery stores. Utilize the inexpensive, yet expansive, advantages that social media sites can offer.

If you’ve cared for children in the past, ask for testimonials from parents or other references and post them online or in other marketing materials. Highlight your experiences and display your licenses. Put simply, make yourself memorable.

The bottom line

Now that you know the 8 steps, don’t hesitate! Start with the first step and decide on a degree that fits best with your personal and professional goals. A bachelor’s degree in early childhood education leadership is a great place to start if you want to open your own daycare someday.


External links provided on Rasmussen.edu are for reference only. Rasmussen College does not guarantee, approve, control, or specifically endorse the information or products available on websites linked to, and is not endorsed by website owners, authors and/or organizations referenced.

Megan is a freelance writer for Collegis education who writes student-focused articles on behalf of Rasmussen College. She hopes to engage and intrigue current and potential students.

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