If you love kids and want to be an entrepreneur, there's no better option than starting a daycare
business.
But childcare is a highly competitive and regulated industry that requires licensing
and inspections.
If you can overcome these obstacles, you can make six figures per year or even more.
I'm Priyanka Prakash, a small business expert at Fundera and a mom of two.
My kids go to daycare in New York City, a city with one of the most highly regulated
child care industries, so I'm familiar with everything a daycare owner should do to ensure
success.
I'll walk you through six steps on how to start a daycare business, covering licensing,
launch, and marketing.
Step one: Find a space to run your daycare.
In most cities, daycares can be run out of your own home, or a commercial space.
Your choice will depend in large part on what families you're planning to serve with your
daycare business, as well as your budget.
For example, if you're planning to serve middle class parents with infants, then a small home-based
daycare could be ideal.
However, if you want to serve families with older children or families with a higher income
level, then you might need to invest in buying or renting a commercial facility.
You should also conduct extensive research into the current childcare offerings in your
community, and the types of families who live in your community.
Here are some questions to ask:
How many families with children live in your community?
How many of these families use nannies or alternative childcare arrangements?
Where do most parents work, and what's a typical workday and commute like?
Who else is running a daycare business near you, and what types of services and amenities
are they providing?
Answering each of these questions will help you determine what type and size of space
you need for your daycare business.
Step two: Get licensed and insured.
Whether you run a home-based daycare or a commercial daycare center, your state and
city will have licensing requirements.
The licensing requirements are designed to test whether you can meet the safety and health
needs of children under your care.
An excellent resource here is Child Care Aware of America, which lists requirements for each
state.
You should also visit the licensing boards in your city and state for daycare providers.
In most states, licensing involves medical screenings, CPR, and first aid certification
for care providers, as well as a certain number of required hours of child development training.
The licensing agency will usually perform an on-site inspection as well.
For the inspection, you'll need to spend time making sure your daycare space is safe with
outlet covers, cabinet locks, and medication and cleaning products stored away.
All told, the licensing process can take up to six months or more, so make sure you plan
ahead.
After getting licensed, you also need to get insured.
There are several types of business insurance that you might need to get, such as workers
compensation, general liability Insurance, and property insurance.
Step three: Hire daycare staff.
The most essential part of running a daycare is to hire good staff members.
These individuals will be in close contact with your enrolled kids everyday, and will
be responsible for implementing your daycare policies.
Although you should minimize turnover at your daycare business, consider hiring staff members
on a trial basis to see how good they are with the families you serve.
In addition, it's important to choose staff members who have some background and experience
in childcare.
You'll also need to ensure that your staff comply with licensing requirements, such as
receiving CPR and first aid training.
Federal law requires states to conduct criminal background checks for childcare providers.
Step four: Draft your daycare policies and procedures.
These include guidelines for staff, as well as the contract that families will need to
sign to enroll at your daycare.
For staff, make sure you address things like hygiene, food handling, and child safety.
For parents, you'll want to cover similar topics and also address pricing, drop off
and pick up times, and policies for when a child falls ill.
You'll be able to find template enrollment forms, daily report forms, and staff evaluation
forms on Pinterest or even from your local licensing agency.
You can also make things easier on your staff and enrolled families by using online check-in
and check-out procedures and auto billing software.
Step five: Get financing.
Like any business, it's likely that you'll need to get financing to get your daycare
business off the ground.
Financing can come from a variety of sources.
For instance, you might qualify for a small business grant or loan from a nonprofit organization
in your local community.
You could also be eligible for an SBA loan or a bank loan.
Certain types of childcare equipment can be financed with an equipment loan.
A small business marketplace like Fundera can help you discover all the financial options
that are available to help you launch or grow your daycare business.
The last step is to develop a marketing strategy.
You'll need marketing collateral for your daycare, such as a brochure which summarizes
your child care approach, policies, and rates.
Promote your daycare business to local parents’ groups, and participate in daycare enrollment
fairs in your community.
You can also advertise your business on parenting websites like Care.com and Winnie com.
Create buzz on social media, and host a grand opening with activities for children and families.
And don't forget—once you have a full roster of enrolled kids, continue to market your
business to new families as those kids graduate from your daycare program.
With these six steps in mind, you should be able to start your new daycare business quickly
and confidently.
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Thank you for watching.