How to Start and Grow a Daycare Business

Starting a Daycare Business You Can Grow

Daycare businesses brought in more than $57 million in revenue last year. Though many of these providers are small businesses, it’s still possible to start a daycare business that is able to grow and scale through the years., especially if you have a solid daycare business plan.

Daycare businesses are always in demand. Here are some steps and tips to follow while starting a daycare business of your own.

Starting a Daycare Business

Obtain the Necessary Licenses

Any business in the child care industry is going to need to meet heavy regulations. These vary by state and local community, so it’s important to familiarize yourself with the necessary permits and requirements before getting started. This site includes a resource that can point you toward the relevant rules for your location, so you can learn how to start a daycare business in your specific area. These might include things like having a building with a specific square footage for every child, employee training and location inspections.

Create a Business Plan

Your daycare business plan should include an overview of the child care industry in your area, your company’s mission statement, financial projections and marketing plans. Find a template online to get started and make adjustments as you determine the details of your new daycare business.

Find a Niche & Selling Point

Some daycare businesses offer general care to a wide array of kids. Others focus on a specific target market, like preschool aged kids or those interested in topics like STEM. Even if you want to work with a variety of families, it’s important to determine some of the aspects that will set your center apart from others.

According to Caroline Jens, a childcare consultant and owner of Child Care Biz Help, your business should have a few key pillars that communicate your brand values. Develop these fully and then communicate them with your team so they can bring those pillars into every interaction they have with the families at your center.

Find a Suitable Location

With a daycare center, finding the right location is less about being in a central hub and more about ensuring the building meets local standards and provides enough space and safety features to accommodate your kids and team members. Of course, it’s still nice to be in a convenient location. But make sure that the space you choose is large enough for your projected enrollment and has the features you need, like a kitchen if you plan on preparing meals or multiple rooms if you want to offer services for multiple age groups.

Invest in the Right Equipment

Daycare centers often need cribs, toys, furniture and play equipment in order to provide a quality experience. Your exact purchases may vary based on your niche and target audience. But it’s always important to take safety into account and make sure items are approved for the exact age group you serve. In addition, make sure you invest in first aid kits, smoke and carbon monoxide detectors and safety training gear for your team.

Build a Team

If you want your business to actually grow and become sustainable, you need a team at your side. Come up with a list of qualities that you need for every new hire and stick to them, rather than attempting to save money by hiring inexperienced people. According to Jens, some of the qualities to look for in a team member include flexibility, the ability to influence and impact others and a true love for working in child care.

Focus on Safety Training

All of your employees should be trained in CPR, first aid, and any other certifications that are mandated by your state. You also need to make this training part of your onboarding process so you can ensure that any new employees you hire are also compliant.

Fine Tune Tuition and Enrollment Numbers

Your earnings in a daycare business come from how many kids you have enrolled at a time. It’s important to have a goal, as well as minimum and maximum numbers for each time slot throughout the day. That information, along with your financial projections from your business plan, should help you set specific tuition rates.

Market Locally

Once you have the basics set up, it’s time to bring in actual customers to your daycare center. To do this, you’ll need a marketing plan. You can advertise or put up signs or daycare business cards around town. You can focus on optimizing your small business website and online profiles for SEO. Or you can even partner with other local businesses that offer services to families to generate referrals.

Create a Growth Plan

It may also be beneficial to come up with a plan for scaling your business right from the beginning. Do you want to start a franchise program? Look into licensing? Open multiple locations with new operators? There are plenty of different methods to consider. So consider each one carefully and make adjustments based on what you know the requirements may be. For instance, if you want to simply grow your initial location, it’s important to choose a spot with room for additions. If you want to franchise, it’s important to track all of your processes so you can create guides for franchisees later on.


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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends, covering entrepreneur profiles, interviews, feature stories, community news and in-depth, expert-based guides. When she’s not writing she can be found exploring all that her home state of Michigan has to offer.

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