Whether your motive is monetary, a desire to be home with your kids or just a love of children in general (or possibly all three), opening an at-home daycare can be very appealing. It offers the possibility of independence and financial freedom and puts you in a position to make a direct difference in the lives of children and families. However, “while it’s crucial to enjoy working with children and helping them develop,” it’s also important to “consider practical realities to ensure alignment with [your] personal goals,” advises Jeff Andrews, founder and president of Business of Child Care, located in Bloomington, Minnesota.
From forming set goals to measure success by, to creating policies and a parent handbook, there are numerous ways to prepare. So before you start adding 12-packs of watercolor paint palettes to your shopping cart and stocking up on hand sanitizer, the experts we spoke to share their advice for how to start an in-home daycare business.
Before starting your in-home daycare business
Opening an at-home daycare business can feel intimidating, but these expert-driven tips and advice can guide you on the right path.
Examine your motivations and goals
The planning stage of any new venture is full of excitement, but it’s important to consider why you want to start an in-home daycare and what your measure of success will be, whether it be monetary, client growth or some other goalpost. “The advice I give anyone considering starting a business, especially in family child care, is to start with a clear understanding of their own desired outcomes regarding the effort involved,” says Andrews.
To do this, he uses a question: “What’s your number?” This question is “both figurative and literal. It helps providers focus on what they need to realize in terms of income, work-life balance or other key considerations,” he adds.
Suzette Salmon, who runs Lil Bebe Academy in Lombard, Illinois, was inspired to open her home daycare business for a few reasons — she couldn’t find child care that fit her philosophical and budgetary needs, she wanted financial independence and she wanted to be home with her children.
Research licensing and legal requirements
Requirements for home daycare businesses vary widely, depending on where you live. Start by visiting the National Database of Child Care Licensing Regulations (a government search tool for finding your area’s specific licensing requirements) or the Business of Child Care’s resources. The Office of Child Care also has a resource guide for starting a child care business, including guidance on licensing, health and safety information, training requirements, assessing child care needs in your community, insurance requirements and more.
Create a business plan
It may be one of the less-fun aspects of planning for your in-home daycare, but creating a business plan forces you to nail down aspects of your business that can then be a guide as you move forward. Do your research to determine:
- Who is your market?
- How many children will you take care of?
- How much will you charge?
Using the U.S. Small Business Administration’s (SBA) guide to writing a business plan will give your business a jump start by helping you nail down those specifics.
In addition to the SBA’s guide, Andrews advises doing three things:
- “Define what makes your program unique and impactful.”
- “Identify your target market and assess whether there’s a need for your offering.”
- “Develop a financial plan that provides a clear overview of what you aim to achieve from running the business.”
To home in on the financial aspect, the SBA provides a startup cost calculator, as well.
Set up your space
You’ve seen Instagrammable child care spaces across social media, but where do you start? First, it’s important to ensure the space is safe, following federal and local health and safety requirements, such as childproofing, meeting fire codes and creating safe sleep spaces.
“Mitigating risks in the environment is critical,” says Andrews. “But it’s also important to create a nurturing and engaging space.” Here he suggests partnering with an organization like Lakeshore Learning, which offers “expertise in assessing space, aligning materials with program goals and working within budget constraints.”
To create this functional but engaging space, Kathy M., who runs Just Like Home Daycare, Inc. in White Salmon, Washington, advises defining your spaces with furniture and creating different areas for play and activities, such as:
- Art.
- Blocks.
- Reading.
- Dramatic play.
- Light table.
- Free play.
Salmon adds that another important consideration, since your business will take place in your home, is that it works for everyone. “I transformed my daycare some years ago into a calm, inviting space. It is important that a play space not be overwhelming for anyone — not the children, adults or residents,” she says.
Decide what your daily schedule will look like
Will you open early for teachers, or work late to accommodate second-shift employees? You might have decided these things while researching needs in your community, but if not, one of the freedoms of starting your home daycare business is that you have some leeway with your hours and schedule, depending on the laws in your area.
Some states may have specific requirements for nap and mealtimes, but the rest of the day is yours to fill with play, outdoor time and activities. For Kathy M., the first child arrives at 6:30 a.m., and the last child is picked up by 5 p.m. Her typical day follows a somewhat loose schedule:
- Breakfast.
- Cleanup and free play.
- Preschool activity.
- Morning snack time.
- Circle time.
- Music, singing and dancing.
- Cleanup and lunchtime.
- Nap and/or quiet time.
- Afternoon snack.
- Art, crafts, games or group activity.
- Cleanup and prepare to go home.
Create your policies
Owning a business comes with a lot of unknowns, but a set list of policies (and creating a contract) may help you feel more prepared. For example, what is your in-home daycare’s policy for sick children? What are your hours of operation? Will you take vacation, and will you provide backup care? Local regulations may make these decisions for you, but it’s still a good idea to put it in writing (and some states may require you to, like Minnesota).
With that in mind, Kathy M. suggests having a comprehensive parent handbook that covers “everything you could possibly think of” (such as your philosophy, the enrollment process, information about meals, details on indoor and outdoor play, etc.), as well as consulting fellow providers to make sure you’re covering everything.
Market your in-home daycare
Both Salmon and Kathy M.’s businesses have an online footprint (think social media, business websites and blogs), but Salmon says she has a waiting pool of prospects from word of mouth and mommy groups, as well.
Depending on who their potential clients are, “some providers have success with simple outreach like posting at a local supermarket while others find effective engagement on social media platforms such as Facebook,” says Andrews. “I also advise thinking creatively to minimize advertising costs,” he adds.
How to have a successful home daycare
In addition to the basics of starting a small business that the experts outlined above, here are some tips and tricks for finding success in your home daycare business.
Set aside an emergency fund: Owning a home daycare can have unexpected costs, says Salmon. Whether it’s children clogging your toilet with wipes or updating your home to meet code, it’s a good idea to have a financial buffer.
Don’t sell yourself short: When Kathy M. started her in-home daycare, she charged by the day and “quickly learned [she] was shorting [herself] on money” when she expected a child to be there and they were absent. She now charges a flat monthly rate and reminds other providers to “know your worth” and “remember that you are a business.”
Be intentional about your goals: “Hope is not a strategy,” says Andrews. “This phrase underscores that nothing happens by accident. Be intentional about your goals, work consistently to achieve them and check in periodically to make sure your destination hasn’t changed along the way.”
Keep it professional: Just because you’re working out of your home doesn’t mean it shouldn’t be treated like a regular job. Kathy M. advises, “how you conduct your business really matters in gaining clients you can have a positive working relationship with.”
Find your community: Kathy M. recommends joining child care provider groups online, saying “it is a great starting place for somebody just starting out to gain some really useful ideas.”
Create a support team: Andrews advises forming a group of advisors who cover different aspects of your business. “This team could include a local business advisor, a fellow child care provider for mentorship or experts in areas like tax filing and quality standards,” He says. “No one succeeds in business without a supportive network, even if it’s informal.”
View yourself as a “limited edition” opportunity: Since your licensing capacity will be limited, Andrews recommends this mindset. It “helps providers target their marketing efforts where potential families live and interact,” he adds.
A final word on starting an in-home daycare
Operating an in-home daycare can be incredibly rewarding, but it’s not without its challenges. As you dive into this venture, it’s important to be realistic about your goals and expectations. Salmon shares a key piece of advice, saying you need to be honest with yourself. “Do you have the capacity to handle different families in your home? Are you approachable? How is your communication?”
And remember, financial gain shouldn’t be your only motive. As Salmon aptly puts it, “Don’t go into the field because of money.” Instead, she emphasizes that your genuine interest in caring for children should be the driving force.
This sentiment is echoed by Kathy M., who believes the heart of the job is helping to raise “children to be kind, considerate, empathetic and loving little people, and there is no job in this world that is more important.”
