Starting and Growing a Daycare Business

Starting a Daycare Business You Can Grow

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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

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.

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.

Developing a Comprehensive Safety and Health Program

Safety and health should be a top priority when starting a daycare business. Develop a comprehensive program that includes regular training for staff on emergency procedures, health standards, and child safety. Ensure that your facility is equipped with all necessary safety features, such as secure entry systems, child-proofing measures, and surveillance cameras. Regular health and safety audits can also help maintain a high standard of care.

Building a Strong Educational Curriculum

A strong educational curriculum is key to setting your daycare apart. Develop a structured yet flexible curriculum that promotes early childhood education. Include activities that foster cognitive, social, emotional, and physical development. Tailoring your program to various age groups and incorporating innovative teaching methods can enhance the learning experience.

Fostering Parental Involvement and Communication

Establishing strong communication channels with parents is vital. Create systems for regular updates on their child’s progress, including digital platforms where parents can view daily activities, menus, and learning milestones. Hosting parent-teacher meetings and organizing family events can foster a sense of community and involvement.

Implementing Efficient Operational Management

Efficient operational management is crucial for the smooth running of a daycare business. Utilize software tools for administrative tasks such as enrollment management, billing, and scheduling. Streamline operations to ensure that staff can focus more on child care and less on paperwork.

Emphasizing Staff Training and Development

Invest in regular training and professional development for your staff. This not only improves the quality of care provided but also contributes to staff satisfaction and retention. Training can include child development courses, behavior management techniques, and first aid certification.

Utilizing Technology for Enhanced Learning

Incorporate technology to enhance the learning experience. This can include educational apps, interactive games, and digital storybooks. However, it’s important to balance tech use with plenty of hands-on, interactive learning experiences.

Exploring Funding and Financial Assistance Options

Investigate funding opportunities such as grants, loans, or subsidies that may be available for daycare businesses. Understanding financial assistance options can help in managing startup costs and operational expenses more effectively.

Prioritizing Eco-Friendly Practices

Implement eco-friendly practices in your daycare. This can include using sustainable materials, recycling, and teaching children about environmental conservation. Green practices not only contribute to a healthier environment but can also be a unique selling point for environmentally conscious parents.

Planning for Expansion and Scalability

Plan for the potential expansion of your daycare business. This might involve scaling up your existing facility, opening new locations, or even franchising your business model. Have a clear roadmap for growth, including financial projections and market analysis.

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.

Measuring Success and Impact

Develop metrics to measure the success and impact of your daycare business. This can include parent satisfaction surveys, child development assessments, and financial performance indicators. Regularly reviewing these metrics will help you make informed decisions about the future of your business.

Marketing Strategies for Daycare Business

Daycare Business

Once you have successfully set up your daycare business, the next crucial step is to attract and retain customers. Marketing plays a significant role in driving enrollment and ensuring the growth of your daycare center. Here are some effective marketing strategies to promote your daycare business locally:

  • Establish a Strong Online Presence: In today’s digital age, having a professional and user-friendly website is essential. Your website should showcase the services you offer, highlight your unique selling points, and include testimonials from satisfied parents. Optimize your website for local SEO to improve its visibility in local search results. Utilize social media platforms like Facebook, Instagram, and Pinterest to engage with parents, share updates, and post photos of happy children in your daycare center.
  • Utilize Local Directories: Register your daycare center in online local directories and parenting websites specific to your area. Many parents search for daycare options through these platforms, making it an effective way to reach your target audience.
  • Partner with Local Businesses: Collaborate with local businesses that cater to families, such as pediatricians, schools, toy stores, and children’s clothing stores. Offer cross-promotions or special discounts to their customers in exchange for promoting your daycare services.
  • Host Open Houses and Events: Organize open houses and events at your daycare center to give parents and children a firsthand experience of your facility and programs. Provide informative sessions about your curriculum, safety measures, and child development approach. Offer fun activities for kids during these events to create a positive and memorable impression.
  • Word of Mouth and Referrals: Encourage satisfied parents to share their positive experiences with others. Word-of-mouth referrals are powerful in the childcare industry. Implement a referral program that rewards parents for referring new families to your daycare.
  • Offer Free Trial Sessions: Consider providing free trial sessions to potential customers. This allows parents to experience your daycare services without committing to a long-term contract. It can be an effective way to showcase your center’s quality and build trust with potential clients.
  • Showcase Your Staff: Introduce your team of experienced and caring staff on your website and social media. Highlight their qualifications and dedication to providing excellent care and education for the children in your center.
  • Advertise Special Programs and Activities: Promote any unique or specialized programs you offer, such as language lessons, art classes, or STEM activities. Highlighting these special offerings can attract parents looking for additional educational opportunities for their children.
  • Participate in Community Events: Engage with your local community by participating in events like fairs, fundraisers, or school functions. Distribute flyers or brochures about your daycare services during these events.
  • Collect and Share Testimonials: Request feedback and testimonials from satisfied parents and display them prominently on your website and marketing materials. Positive reviews can build trust and credibility among prospective parents.
Marketing StrategyDescription
Establish a Strong Online PresenceCreate a professional and user-friendly website that showcases your daycare services, unique selling points, and testimonials from satisfied parents. Optimize the website for local SEO and actively engage with parents on social media platforms like Facebook, Instagram, and Pinterest to share updates and photos of happy children.
Utilize Local DirectoriesRegister your daycare center in online local directories and parenting websites specific to your area. This strategy helps parents searching for daycare options find your business easily.
Partner with Local BusinessesCollaborate with local businesses catering to families, such as pediatricians, schools, toy stores, and children's clothing stores. Offer cross-promotions or special discounts in exchange for their promotion of your daycare services, creating a win-win situation for both businesses.
Host Open Houses and EventsOrganize open houses and events at your daycare center, providing parents and children a firsthand experience of your facility and programs. Offer informative sessions about your curriculum, safety measures, and child development approach, alongside fun activities for kids to leave a positive and memorable impression.
Word of Mouth and ReferralsEncourage satisfied parents to share their positive experiences with others, as word-of-mouth referrals are powerful in the childcare industry. Implement a referral program that rewards parents for referring new families to your daycare, further incentivizing them to spread the word.

By implementing these marketing strategies, you can effectively promote your daycare business within your community, attract new enrollments, and pave the way for future growth and expansion opportunities.

Conclusion: Navigating the Path to Daycare Success

  • Potential for Profit: The daycare industry holds significant revenue potential, as evidenced by its substantial earnings.
  • Strategic Planning: Success requires careful planning and execution, crucial for sustainability.

Laying the Groundwork

  • Compliance and Credibility: Obtaining necessary licenses and adhering to regulations is essential.
  • A Strong Business Plan: Crafting a comprehensive plan sets a clear direction for the business.

Differentiating Your Daycare

  • Finding Your Niche: Identifying a unique selling point helps stand out in a competitive market.
  • Building a Brand: Communicating values and identity is key to establishing a strong community presence.

Setting Up the Physical Space

  • Choosing the Right Location: A safe and suitable facility is crucial for a quality childcare experience.
  • Investing in Resources: Appropriate equipment and safety measures contribute to the center’s success.

Building a Skilled Team

  • Staff Training and Development: A competent and dedicated team is vital for providing exceptional care.
  • Upholding Reputation: The quality of care directly influences the center’s reputation among parents.

Marketing Strategies for Growth

  • Driving Enrollment: Effective marketing is essential to attract customers.
  • Community Engagement: Participation in local events and gathering testimonials builds trust and referrals.

Planning for Future Expansion

  • Growth Mindset: Having a plan for expansion sets the stage for future success.
  • Exploring Expansion Opportunities: Consider franchising, multiple locations, or licensing as growth avenues.

Starting and growing a daycare business presents a unique blend of challenges and opportunities. The key to success lies in meticulous planning, establishing a solid foundation, and differentiating your center in a crowded marketplace.

From compliance with regulations to creating a nurturing environment, every aspect plays a role in the business’s growth. Implementing targeted marketing strategies, building a strong team, and actively engaging with the community are crucial steps toward attracting and retaining clients.

With a vision for future growth and a commitment to quality care, daycare entrepreneurs can build thriving businesses that make a positive impact in the lives of children and their families.

The journey to daycare success is marked by dedication, innovation, and a deep understanding of the needs of modern families.


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Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends and has been a member of the team for 12 years. Annie covers feature stories, community news and in-depth, expert-based guides. She has a bachelor’s degree from Columbia College Chicago in Journalism and Marketing Communications.