How to start a daycare. From idea to open doors.
Everything it takes to open a licensed daycare in the US — choosing your model, licensing, startup costs, ratios, funding, and filling your first spots. Honest numbers, and your state agency as the final word.
How do you start a daycare?
Can you actually make money?
Profit comes down to three levers you control: keeping every licensed spot filled, staffing efficiently to ratio, and pricing tuition from your real costs. MyKidReports helps you pull all three — fill every seat with digital enrollment and waitlists, staff to ratio with live ratio tracking, and collect on autopay. Start free →
How to start a daycare in 13 steps
Grouped into four phases. Work through them in order — several depend on the ones before, and skipping ahead is how deposits and months get lost.
Choose your model: home vs center
A home-based (family) daycare runs from your residence, serves a small group of children, costs far less to launch, and carries a lighter licensing burden — it is how most owners start. A center-based daycare uses a commercial space, serves more children across multiple classrooms, earns more revenue, and demands more capital, staff, and compliance. Neither is better; they are different businesses. Pick the one that matches your budget, your risk tolerance, and how much you want to run day to day.
Research your state's requirements
Before you spend a dollar, learn the rules that will govern your business. Child care is regulated at the state level, so licensing, ratios, staff qualifications, square footage, and inspections all differ by where you live. Find your state child care licensing agency and read the provider requirements in full — many states offer a free startup orientation for new providers. This single step prevents the most expensive mistakes in this guide.
Write a business plan
A business plan turns “I want to open a daycare” into a fundable, survivable business. Cover your program, your local market and competitors, your marketing and enrollment plan, your staffing model, and — most important — your financial projections: startup costs, tuition pricing, monthly expenses, and the enrollment level where you break even. Lenders and grants require it, and writing it exposes flaws while they are still cheap to fix. See our daycare business plan guide.
Register your business & pick a legal structure
Most owners choose a sole proprietorship (simplest and cheapest, but no separation between business and personal assets) or an LLC (a little more paperwork, but it shields your personal savings and home if the business is ever sued). Because you are caring for children, most advisors recommend the LLC for the liability protection. Register with your state, get a free EIN from the IRS, open a business bank account, and keep business and personal money strictly separate.
Meet licensing requirements
Nearly every license requires the same core: background checks and fingerprinting, CPR and pediatric first-aid certification, a minimum number of early-childhood training hours, a completed application with fees, and a passing facility health-and-safety inspection. Start early — checks and inspections take weeks to schedule. Confirm the exact checklist with your state agency on our license requirements page and skip nothing.
Zoning, facility & safety
Confirm zoning before you sign a lease or commit to a home — call your city or county zoning office directly and ask whether child care is permitted at the address. This is where owners lose deposits and months. Then meet the safety rules: fenced play space, smoke and carbon-monoxide detectors, fire extinguishers, covered outlets, secured cleaning supplies and medications, safe napping equipment, and clearly marked exits. Your inspection checks all of it.
Calculate startup costs & secure funding
Add up every launch expense plus several months of working capital before enrollment fills. A home daycare typically needs $10,000–$50,000; a center often $50,000–$250,000 or more. Fund the gap with savings, an SBA microloan, a line of credit, or state child care startup grants funded through the CCDF. Undercapitalization is the number-one killer of new daycares — see the full cost breakdown and budget for a slow start.
Get insurance
Insurance is non-negotiable and often required to license. Carry general liability and professional (abuse and molestation) coverage at minimum; add commercial property, and workers' compensation if you hire staff. A home daycare needs its own commercial policy — your homeowner's insurance will not cover a business run from your house and may be voided if you rely on it. Use insurers that specialize in child care.
Set ratios, then hire & train staff
Set your caregiver-to-child ratios first (see the ratio table below), then hire against them. Look for warmth and reliability first — you can train procedures, but not temperament. Every hire needs the same background checks, CPR and first-aid certification, and training hours you completed. Budget honestly for wages: skimping on staff pay drives the turnover that erodes quality and enrollment.
Curriculum, policies & daily schedule
Families choose a daycare they trust, and trust comes from structure. Choose a curriculum or daily framework for the ages you serve, and write a parent handbook covering hours, tuition and late fees, sick-child and medication policies, pickup authorization, discipline, and closures. Clear policies prevent conflict later and signal to touring parents that you run a real program, not a babysitting service.
Set tuition, fees & billing
Price tuition from your actual costs, not from what feels comfortable to charge. Total your monthly operating expenses, divide by realistic enrollment, add your target margin, then check against local competitors. Then automate collection from day one — chasing paper checks is a slow leak of time and cash. Childcare billing software handles automated invoicing, autopay, and online payments so tuition arrives on time.
Market your daycare & fill enrollment
An empty daycare loses money every day, so start marketing before you open, not after. Build a simple website that shows your programs, photos, hours, and an easy way to inquire — most parents find and vet you online first. Claim your Google Business Profile so “daycare near me” searches surface your center. Add referrals, a waitlist for your opening date, and social media. Open with families already enrolled and a pipeline behind them. Skip the agency bill: the MyKidReports AI website builder gives you a real daycare site — your own domain, tour & waitlist forms, and local SEO so “daycare near me” finds you — for about $10/month instead of thousands.
Run your pre-opening checklist
Before your first child arrives, confirm every piece is in place: license approved and posted, insurance active, inspection passed, staff hired and trained with background checks cleared, enrollment and emergency forms collected, tuition and billing set up, curriculum and daily schedule ready, supplies and safety equipment stocked, and your parent handbook distributed. Do a full walkthrough — our free startup checklist lays out every item.
Ready to run the daycare you're about to open?
MyKidReports handles billing, check-in, enrollment, and parent messaging — free for up to 5 children.
How much does it cost to start a daycare?
A home-based daycare typically launches for $10,000–$50,000 (a bare-minimum setup near $5,000); a center runs $50,000–$250,000 or more.
| Startup expense | Home-based | Center-based |
|---|---|---|
| Licensing & fees | $100–$1,000 | $500–$3,000 |
| Training & certifications | $200–$1,500 | $1,000–$5,000 |
| Space & renovations | $1,000–$10,000 | $20,000–$150,000+ |
| Furniture & equipment | $2,000–$8,000 | $10,000–$40,000 |
| Toys & materials | $1,000–$4,000 | $5,000–$20,000 |
| Staff / payroll buffer | $0–$8,000 | $15,000–$60,000 |
| Insurance (year 1) | $500–$2,500 | $2,000–$8,000 |
| Marketing & website | $300–$3,000 | $2,000–$12,000 |
| 3-month working capital | $5,000–$15,000 | $25,000–$80,000 |
| Typical total | $10,000–$50,000 | $50,000–$250,000+ |
Caregiver-to-child ratios
The maximum children one caregiver may supervise, strictly enforced by every state. Ratios loosen as children age. These are common ranges; ratios vary widely by state — a few allow infants up to 1:6, toddlers up to 1:9, and preschool up to 1:18. Confirm your state's exact numbers.
How much can a daycare owner earn?
Your income is a direct output of enrollment, tuition, and how tightly you run the business — not a fixed number the industry hands you.
Common mistakes new owners make
Most first-year failures are not bad luck — they are a handful of predictable, avoidable mistakes.
Underestimating licensing time
Background checks, training, and inspections take weeks to months. Owners who plan for a fast opening run out of money before the license clears.
Signing a lease before confirming zoning
Commit to a space, then discover child care is not permitted there, and you have lost the deposit and months. Confirm zoning first, in writing.
Pricing on emotion
Charging low tuition because families “can't afford more” feels kind but guarantees you cannot pay staff or stay open. Price from your costs.
Manual or late billing
Chasing checks wastes hours and leaves money uncollected. Automate invoicing and payments from the first week.
Marketing only after opening
An empty center burns cash. Start enrolling families before your doors open, not after.
Skimping on staff pay
Underpaying drives turnover, and turnover destroys the consistency parents pay for. Budget for competitive wages.
How to start a daycare in your state
Licensing, ratios, and requirements are set at the state level. Start with your state's guide — we cover all 50 states plus DC — and treat your state licensing agency as the final authority.
Starting a daycare, answered
How much does it cost to start a daycare?
A home-based daycare typically costs $10,000–$50,000 to start, while a center-based daycare usually runs $50,000–$250,000 or more. The biggest variables are your space and renovations, staffing, and how much working capital you set aside for the early months before enrollment fills. See our full cost breakdown.
Do I need a license to run a daycare from home?
In almost all cases, yes — most states require a family child care license to care for children from your home for pay, even for a small group. A few states exempt very small arrangements, but the thresholds are strict. Confirm the exact rule with your state licensing agency before you enroll anyone.
How long does it take to open a daycare?
A home daycare typically takes about two to six months to open, and a center-based daycare usually takes six to twelve months. The timeline is driven mostly by licensing — background checks, required training, and the facility inspection all take weeks. Starting licensing early is the best way to open sooner.
What qualifications do I need?
Requirements vary by state, but most owners need to be at least 18–21, hold a high-school diploma or GED, pass background checks, and complete CPR, pediatric first-aid, and a minimum number of early-childhood training hours. Center directors often need additional education, and many pursue a Child Development Associate (CDA) credential.
Can I start a daycare with no money?
Starting with no money is very difficult, but starting with little is possible — especially a home-based daycare. Owners use SBA microloans, family loans, and state and federal child care startup grants funded through the CCDF. You will still need to cover licensing, training, insurance, and safety equipment, so plan to raise at least a small amount of capital.
Is owning a daycare profitable?
Yes, a daycare can be profitable, though margins are often thinner than new owners expect — typical net margins run roughly 5–15% — industry averages often land near 6–10%, while well-run, full programs can reach about 20%. Because staffing is 50–70% of expenses, owners who run near full enrollment and control turnover earn the most; half-empty programs often lose money. Average owner earnings are commonly cited around $30,000–$60,000.
What's the difference between a home daycare and a center?
A home daycare operates from your residence, serves a small group of children, costs far less to start, and carries a lighter licensing burden. A center operates from a commercial space, serves more children across multiple classrooms, earns more revenue, and requires more capital, staff, and compliance. Most owners start home-based and some later expand into a center.
How do I get grants to start a daycare?
Child care startup grants come mostly from state agencies and federal programs funded through the Child Care and Development Fund (CCDF). Start with your state child care licensing agency and your local child care resource and referral agency, which list current grants and often help you apply. Some cities and nonprofits offer additional funding for providers in high-need areas.
How much do daycares charge in tuition?
Nationally, center-based daycare averages about $300–$320 per week — roughly $15,000–$17,000 a year — with infant care higher, around $343 per week. Rates vary widely by state and city, so price from your real costs and check nearby providers. See our cost breakdown.
How many children can I have in a home daycare?
It depends on your state and license type. Many states license a small family child care home for about 6–8 children and a large family home for up to roughly 12–14 with a qualified assistant — always within age-based ratios, and your own young children usually count. Confirm the exact numbers with your state licensing agency.
The all-in-one platform new owners open with
You just mapped out everything it takes to open. MyKidReports runs it — one platform for billing, check-in, enrollment, and family communication. Free for up to 5 children, then $0.99 per child per month.
Billing & autopay
Automated invoicing, autopay, and online payments so tuition arrives on time.
Contactless check-in
QR and PIN check-in/out with live attendance and ratio tracking.
Digital enrollment
Online admissions, waitlists, and paperless enrollment packets.
Parent app & messaging
Daily reports, photos, and two-way messaging families love.
Website builder
A daycare website that gets you found by nearby families.
Reports & records
Licensing-ready records, food program logs, and owner reports.
The full daycare startup series
Five connected guides that walk you from first idea to open doors.
Startup Costs
What it really costs — home vs center, itemized.
Read the guide → LicensingLicense Requirements
Background checks, training, ratios, inspections.
Read the guide → ChecklistOpening Checklist
Every step to open, grouped by phase.
Read the guide → PlanningBusiness Plan
The 8 sections and financials lenders want.
Read the guide →Open organized — and stay that way.
Once you're licensed, MyKidReports runs the daily operations you just mapped out: billing and autopay, contactless check-in, digital enrollment, and parent messaging. Free for up to 5 children, then $0.99 per child per month.
No setup fees, no contracts. Website and marketing tools available when you're ready.
