The Complete Checklist for Starting a Daycare Center

Many people dream of opening a daycare center. In fact, child care center owners come from a wide variety of age groups, backgrounds and life experiences.  

From young families to educators to business investors, the motivation for starting a daycare can vary from person to person. One common theme is the desire to care for and nurture children.  

Starting a Daycare Checklist

Joining the child care industry can be both rewarding and challenging. It’s a lengthy process--launching a daycare overnight isn’t possible. From the time you begin to think about starting your own daycare business to the moment you open your doors, you’ll need to do a lot of thinking and planning.   

Procare Software was designed to assist child care providers in running their businesses. We’ve been doing just that since 1992. So, we know a thing or two about what it takes to be successful as a daycare center

The Complete Checklist for Starting a Daycare 

We’ve compiled the following checklist of the steps to take if you are starting a daycare. 

Establish Your Goals 

Understanding what you hope to achieve from starting a child care center is an important first step in the process of turning your dream into a reality.  You’ll want to consider both the personal and financial aspects of this decision. 

 Personal Goals:  

  • Why do you want to do this? 
  • Is owning a business something you’ve always wanted? 
  • Is being your own boss an attractive idea? 
  • Are you self-motivated and willing to devote substantial time and effort? 

Business Goals:  

  • How are your finances? Can you afford to do this? 
  • Do you have the funds to invest or are you able to secure a business loan? 
  • What is a reasonable return for your investment and is it reachable? 

Do Your Research 

Before you invest time and money into a new daycare business, you’ll want to do a ton of research. Plan to invest the hours of fact-finding this will require over several months.  

What you learn in this investigation phase may change your initial vision and you may need to adjust the size or scale of your business. That is exactly why this step is so critical.  

For many people, what they find during this stage energizes them and motivates them to charge ahead with their vision. 

Do Your Research

Determine your state and local requirements for operating a licensed daycare center

  • The rules vary by location; however, you can expect this to be a very long list, covering topics such as staff requirements, safety, health, nutrition and record-keeping.  
  • The U.S. Department of Health & Human Services (HHS) has an extensive online tool, the National Database of Child Care Licensing Regulations to help you find local rules and governing bodies. 
  • Contact your local city or county child care licensing agency.  

Understand the target audience: parents of young children

  • Review the demographics of the area - how many children need care? 
  • What are parents looking for from a daycare provider? 
  • Talk to area parents to get their insights - who cares for their child?  
  • What’s good about their current provider, how did they choose them? 

What’s the right neighborhood for your new business? 

  • Is there a need for a new child care provider? 
  • Is the area over-saturated? Is it under-served? 
  • Location is key for working parents:  
  • Is it close to home? 
  • Is it close to work? 
  • Is it close to school? 

Review Competition & Demand 

Once you’ve completed your initial review of requirements for starting a new daycare business, you’re ready to start hone in on the location and style of child care center you want to open. Start by reviewing existing child care providers in your target area(s), including home-based and center-based as well as individually owned and franchised locations. You want to figure out how your business will fit into the current market and identify areas where you can differentiate your business. 

  • Review the websites and social media accounts for all of the local providers. 
  • Review their pricing and policies. 
  • Do they have waiting lists or are spots available? 
  • Utilize online tools such as Yelp to see parent reviews. 

Determine How Your Daycare Will Be Different 

Determine How Your Daycare Will Be Different  

The key to encouraging families to choose your child care center over others is to provide something that competitors do not. Think in terms of overall value--parents aren’t necessarily looking for the least expensive provider. They want safety first, and then will look for elements of the program that are different or better. 

  • Will your daycare have more flexible hours than others? 
  • Will you offer a sought-after enrichment program that others do not? 
  • Will you choose a location that’s more convenient? 
  • Do you plan to offer an education-based curriculum? 
  • Are you planning to offer the technology tools that parents, and children want? 

Name Your Business 

Choosing your business name is one of the more fun aspects of starting a daycare center. This is a chance to be creative and add meaning to your business. You may start with a long list that you need to narrow down, or you may have a name in mind. In either case, keep in mind the following tips:  

  • Choose a unique name, but not so unique that it’s confusing. 
  • Choose a name that clearly states what your business offers. For example, “Busy Bees Daycare” is better than simply “Busy Bees.” 
  • Research the name to be sure it’s not already being used. 
  • Given the importance of your online presence (it’s how most parents will find you), determine if you’ll be able to secure a website address that utilizes your business name.  
  • Secure the domain name, even if you’re not yet ready to build an online home. 

Create Your Business Plan 

Having a written business plan is a must, as it will help you to both start and run your daycare center. Think of it as a roadmap that will detail where you’re going and how you’ll get there. 

The good news is that much of the research you’ve gathered in the above steps will be used in developing your business plan. 

This foundational document is necessary no matter the size of your business. Even if you plan to operate your daycare from your home, you still need a business plan, although it may be a bit less formal than others. 

Lenders and potential partners will want to review your plan and The Small Business Administration (SBA) has several online resources to assist you in creating a plan for your business, including templates and example plans. 

The SBA also has a huge network of local mentors and classes that can help you to develop your plan and operate your business. Find a local resource here

Create Your Business Plan 

Legal Planning 

Given the extensive list of rules and regulations and licensing requirements you’ll need to meet in order to operate your child care business, you’ll want to consult an attorney for assistance.  

  • Determine how you will structure your business operation.  
  • You may choose to incorporate your business as a C or an S corporation, form a general or limited partnership, or work as a sole proprietor or LLC.  
  • Each option has legal, insurance and tax ramifications, so this is an important step to consider. 
  • Review the local requirements with your attorney, and plan several check-ins prior to opening your daycare.  

Finances & Budgeting 

Meeting with your bank or other financial advisory firm will help you to decide how you’ll structure the funding of your child care center. 

  • What are typical startup costs? 
  • How much cash do you need as an initial investment? 
  • What are your financing options? 
  • How will this business impact your long term financial health? 
  • Will other individuals be investing in your business? If so, how should that investment be structured? 

Insurance Planning 

Not only is insurance a requirement in order to operate a licensed child care facility, it’s critical to protect both your business and personal assets. 

  • Meet with a licensed insurance agent familiar with local requirements to review your needs and recommend coverage terms and policies. 
  • Will you be offering healthcare benefits to your employees? If so, you’ll need to meet with a healthcare provider to arrange for a plan. 

Determine Pricing 

  • Refer to competitive review to determine current average in the area 
  • Set pricing by age group  

Choose the Right Site for Your Business 

After completing the competitive review of daycare providers in your area, you’ll have identified one or more possible areas in which to set up your business. Beyond finding the right zip code, you need to decide what type of building makes sense.  

  • Is your home an appropriate location? 
  • Will it meet the regulatory requirements? 
  • How will having the business impact your family? 
  • Should you consider moving into an existing building? 
  • Is the location ready to occupy or does it need remodeling? 
  • Should you buy or lease the building? 
  • Should you build a brand-new facility? 
  • Given the right budget, this can be the ideal solution.  
  • How convenient is the location for parents to drop off and pick up children? 
  • Is ample parking available?  
  • What are the options for safe outdoor play areas? 

Make Smart Staff Hiring Decisions 

Make Smart Staff Hiring Decisions

Choosing the right child care staff is critical to your success. Here are just a few questions to consider: 

  • How many staff members do you need?  
  • This will be related to the ages of the children you accept 
  • Refer to your state’s guidelines regarding child-to-teacher ratios 
  • How will you conduct criminal background checks? Drug tests? 
  • What certifications and experience should you look for? 
  • Previous child care experience 
  • Accreditation or child care training  
  • CPR and first aid 
  • How will you train your staff?  

Determine Operational Policies 

You’ll have several decisions to make regarding the type of care you will provide. Consider the following: 

  • What hours do you plan to be open? 
  • What ages will you provide care for? 
  • Refer to state and local guidelines for child-to-caregiver ratios 
  • Will you require children be potty trained? 
  • Will you offer before and after school care? 
  • Will you offer transportation? 

Build Your Curriculum 

  • Refer to your parent research - what do they look for from the provider? 
  • Prepare for kindergarten 
  • Find resources for purchasing curriculum materials 
  • Consider enrichment options 

Gather the Required Equipment 

Gather the Required Equipment

If you’re a parent, you know that children require a sometimes mind-boggling list of “stuff” that you never considered before bringing home your first child. With a daycare, you’ll be multiplying those needs to fit the number of children in your care. Here’s a list of some of the items you’ll need: 

  • Chairs, tables, rugs 
  • Age-appropriate toys, games and books 
  • Technology equipment and software 
  • Cribs, nap mats, blankets 
  • Food preparation items 
  • Outdoor play equipment 
  • Hygiene items such as diapers, wipes, soap 
  • Office equipment 
  • Classroom monitoring equipment 
  • Cleaning supplies 

Plan Meals for Students 

Consider how you plan to feed the children in your care. You’ll likely have several different age groups to consider. 

  • Will you offer meals or snacks as part of tuition fee? 
  • What’s your Infant feeding plan? 
  • How will you handle food allergies? 

Find the Right Daycare Management Software 

Find the Right Daycare Management Software

When choosing a child care management business solution it’s important to find an all-in-one solution that not only tackles classroom tasks like attendance and meal counts and ratios but one that will help your business grow with financial tools and employee management.  Procare Software solutions is the most robust child care management tools on the market today.  From parent engagement apps to payment collection, securely stored family information and a host of other resources.  No other solution out there covers you from the classroom to the back office, saving you and your staff time and energy so you can focus on growing your business and spending more time with the kids at your center. 

The planning that goes into starting a daycare center can be overwhelming - let’s face it, that’s a pretty exhausting list. However, taking the time to work through the checklist will provide a solid framework that allows you to build a thriving daycare center.  

Running Your Child Care Center - Let’s Get Started 

Once your business is established, you’ll have a whole new list checklist of items to provide high quality care and manage your finances. Procare Software can help by providing tools and services to automate and organize administrative and business functions at your daycare center. 

Related Articles 

Still looking for more information? Be sure to check out these Procare resources: 

If you are interested in further coverage of these topics, here’s a list of recent Procare blogs that you may find helpful: 

Want to learn more about our child care management software and how it can benefit your daycare? Contact us today 

Additional Resources 

Child Care Aware includes a number of resources for child care providers, including legal checklists, and a list of Child Care Resource and Referral Agencies
The Small Business Administration has a free guide, How To Start a Quality Child Care Business.  

The National Association for the Education of Young Children is a membership organization for early learning professionals. 

Child Care Exchange offers multiple training resources. 

Child Care Marketing Solutions, led by industry expert Kris Murray offers several marketing tools and educational sessions.  

The National Early Childhood Program Accreditation offers accreditation for child care center directors, administrators and professionals.  

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The Complete Checklist for Starting a Child Care Center

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