How to Start a Daycare Business from your Home
Starting a daycare can be a rewarding endeavor in more than just the financial sense. If you have young children of your own and have a passion for care-giving or education, this can be an excellent industry to get started in. However, before you start a daycare, there are a number of questions you should ask yourself.
Is there growth in the home daycare industry?
Before starting any kind of business, it is necessary to conduct the appropriate market and competitive research. Getting into a saturated or declining market means that you will have an uphill battle on your hands right from the start. According to the National Association of Child Care Resource and Referral Agencies, 65% of all mothers in America with children under five years old are in the workforce. It is also estimated that an approximately equal percentage of children are cared for by someone other than their parents. Applying these findings to your potential serviceable area, you may find that there are dozens or even hundreds of children that could be enrolled in your daycare.
What kind of daycare do I want to open?
Before you start a daycare, it’s useful to know a little about different types of daycares that can be opened from your own home or from an external facility. Most can be grouped into either of two categories: family daycares and group daycares. The family daycare is usually operated by a caregiver who takes care of other children in addition to her own, in order to supplement her income. This daycare is smaller and usually more flexible to the demands of parents. It is often not licensed by the state so parents may not be able to claim daycare expenses on their income tax returns. This type is easy to start up and requires little capital investment.
Group daycares are usually larger and often separate children by age or differing needs. They may be standalone centers or they may be run from large homes with backyards.
A private daycare is a for-profit entity that provides interesting, stimulating activities in a structured environment. They often employ several trained caregivers, and have established policies for hygiene, food preparation, and discipline. They may also provide transportation to and from the daycare. Franchises or chain centers function similarly to private daycares. They are standalone facilities operating from carefully developed operational, marketing, and finance plans. However, they often require that the investor have considerable start-up equity. They will help to train your staff, process all required daycare permits, and assist in creating promotional materials and other forms needed for your business to operate efficiently. They can also assist in designing the layout for the facility and can recommend suitable toys, sleeping mats, and educational materials. If you open a chain center, you will have guidance throughout the start-up and operational periods. However, starting a daycare of this kind requires a significant initial investment and monthly franchise fees may be quite substantial.
In choosing whether you want to open a private daycare or a licensed group daycare, it is best to assess your goals and your means of achieving those goals. Are you a stay-at-home mother looking to merely supplement your income? Do you have caregiver experience or experience educating groups of young children? How many children can you accommodate in your home at one time (eating, sleeping, and playing space)? And then you can ask yourself…
Is this what I really want?
Before you start a daycare business, ask yourself if you are ready for all the unexpected problems that are sure to arise before and during operation. Do you have the means and desire to satisfy the physical, emotional, and intellectual needs of several different children on a daily basis? Each child has his/her own unique personality and needs you must attend to. In addition to care-giving, you will also need to be a manager, an accountant, and a salesperson. If you would like to start a daycare as a full-time business, remember that you may need to hire and train staff, promote your daycare regularly, as well as apply for the appropriate zoning, fire safety, and building code permits.
What resources are available for starting a daycare?
There are several books available that can guide you through the process. Searching on Amazon.com will yield at least a dozen results. There are two highly-rated start-up kits with step-by-step information on how to develop a business plan, get licensed & insured, manage your cash flow and attract clients. There is detailed information on creating all the necessary daycare forms, staffing, establishing policies and procedures. The Daycare Starter Kit and Starting a Daycare Center Start-up Kit are two of the most popular comprehensive start-up guides out there. They are equally great resources, but the latter has a couple of extra bonus items at the time of writing this article.