How Do I Start a Successful Daycare?

Starting a new business is no walk in the park. There is much work to be done before your doors can open and even more be completed once you are up and running. While your potential new business endeavor will certainly not be easy, it does not have to be overwhelming or impossible either. In fact, we believe with the right plan in place, it can be an invigorating experience which fuels your good work long after you officially begin.

To start a successful daycare you will need to complete market research in your community, write up a business plan, secure adequate funding, choose your niche, attract enough initial clients, and continuously market yourself to your community.

Below we will break down each of these steps, turning this endeavor from an overwhelming one to one that is quite possible for you to achieve and even succeed in.

Complete Market Research

Market research is the process of researching the community you hope to start your business in to learn about the needs that are already present.

While you might be excited about starting your dream business, you mustn’t solely focus on your own wishes. No one else in your community may have the same desires as you when it comes to your daycare business. Unfortunately, if that is the case, it will mean a lack of business for you once you finally open your doors.

Instead, you must ask questions of the people in your community. You need to intimately learn the context into which you are coming.

If you are not sure what questions to ask, here are a few to get you started:

    • Are there other daycare centers in this community?
    • What are the best parts about those daycare centers?
    • What about those centers that turn people away?
    • What other childcare options do people use?
    • Why do they prefer those options over a daycare center?
    • How many children are there in this town?
    • What is the demographic of the town overall?

Once you have a general idea of the need, you can start asking questions about interest in a daycare center:

    • Would you make use of daycare if there was one in this community?
    • How much would you feel comfortable paying for a local daycare center?
    • How much is too much to pay for daycare childcare?
    • How many children would you have used this daycare?
    • What is important to you in a daycare center?

How Do I Start a Successful Daycare?As you interview your community, keep an eye out for whether or not there is a specific type of person who is most interested in your daycare center. This might mean the people who are most interested share the same age, gender identity, location, or even income level. It could also mean that they share a lifestyle, mindset, or common need.

Once you notice this trend emerging from your interviews, try to seek out more and more of this type of person. This is your ideal client and they represent dozens of more people just like them who might make use of your daycare center.

If your ideal client has a certain need that makes them willing to use your services, do whatever you can to fill that need in your community. If they have a certain mindset, seek their thoughts and advice on every move you make going forward. Their opinion is representative of many more in your community who could help your business be very successful.

Daycare Business Plan

Once you understand more about the community you are locating your daycare business in, it’s time to develop a business plan.

Writing up and sharing a business plan means that it is finally time to start making some decisions when it comes to your new endeavor. It is quite possible that up until now, you have not actually taken action on any of your daycare dreams (other than hosting a few interviews in the step above).

The decisions you need to make are not always decisions that you need to make alone. To make some of the legal or financial decisions, you may want to consider hiring an attorney or tax professional.

You will likely require both of these professionals’ services in the future and so it may be helpful to start these relationships right at the beginning of your daycare business journey.

Some decisions that you will need to make and write down in your business plan:

    • Where will your daycare business be located?
    • What will it be called?
    • What type of legal entity will it be?
    • How will it be taxed?
    • What kind of funding will be required (more on this later!)?
    • Who will it serve?
    • What protocols and policies will be in place?

It will be helpful for your future self to outline as much about your new business as possible. This may also be helpful if you decide to secure funding for your endeavor.

Investors and those offering grants will want to make sure that their money is going to good use. This means the more details you can outline and the more thought you can show you’ve put into this effort, the better.

Daycare Funding Options

Once you’ve written out your business plan, you now have a tool you can use to leverage some additional dollars for your startup.


As mentioned, this means you can show your business plan to possible investors to try to convince them to fund your business.

While investing is a viable option for your daycare, you need to make sure you read all of the fine print of any agreement you decide to sign. You will likely need to pay a certain amount of interest on the money you borrow. This is only a negative thing if it comes as a surprise to you later!


Another option for funding your daycare is to secure a grant. These often (but not always!) do not need to be repaid, making it an especially helpful addition to your business finances.

Check with your local authorities to determine what type of grants may be available to daycares in your area. As with any investing deals, you decide to sign, make sure you take good care to read all of the details of this agreement.

Earn More Money

Finally, if you decide not to connect with an investor and do not qualify for any grants, you may simply need to earn more money to fund your daycare. This may mean extra hours in your current job as you get started, additional work for a family member who is willing to support you or even securing a pay raise.

Eventually, your business will ideally have some income that can help support your journey. Until then, you need to make sure you are at least making enough to stay afloat.

Choosing a Niche for a Daycare

How Do I Start a Successful Daycare?A niche means a specialty. How will your daycare stand out among the rest?

This might seem silly to consider when it comes to childcare, but it is just as important as any step in this process. If you do not consciously decide how your daycare will differentiate itself, it will not stand out in your customers’ minds.

You need to be known for something. The great thing is, you get to decide what that is!

As we said in the Market Research section, it is highly beneficial if you take into consideration what the local needs are as you move forward in your business decisions.

    • Does this community need a daycare center that can work more flexibly with parents’ schedules?
    • Do the parents here want a more educational atmosphere for their children?
    • Is this community into healthy living and hoping for a daycare that will support this lifestyle through activity and quality food?

Now that you have listened to the community, it is time to make some decisions in response. How can your daycare live into the needs that have already been shared with you?

Attracting Enough Clients for a Daycare

Once you have decided on your niche, you need to tell everyone.

Make sure that you are clear in identifying the problem that you solve every time you do. People do not want to hear about why they should pay you money; they want to hear about what you are going to do for them.

Focus on being helpful to your community and your community will respond with support.

Enough Clients

It is important to pay special attention to the word “enough.”

One daycare’s “enough” will not be the same as another’s.

You need to know ahead of time how many clients, or students, need to be registered in your daycare center for you to be successful. It is okay if this number starts low in the beginning, as long as you can support yourself on this number while your daycare grows.

If you are having trouble finding more students, consider offering incentives for current parents to bring in their children’s friends. Not only will this help you by providing another long-term paying client, but it also will improve your students’ experience with your center as more and more of their friends sign up for daycare.

Daycare Marketing

Marketing for your daycare center does not stop when you open your doors for business.

How Do I Start a Successful Daycare?In fact, you can keep a marketing for as long as you are open!

Marketing does not necessarily mean you are selling open spots for your center. Even if you do not have any availability, you want to always be sure to get the name of your daycare out there.

Stay fresh in the mind of your community. Be certain they understand the way you provide value to the parents and families that you serve.

One of the best ways to make sure your community remembers you are valuable to them is to actually figure out how you can provide value to them! This could be online or offline.

It could mean showing up at local events and offering short childcare classes. You could host these same classes online. Not only does this help those who attend your courses, but it reminds everyone that sees these course offerings that you are the local expert on childcare.

Do not underestimate the effect that this sort of marketing can have on your community. Even if you think you are offering certain opportunities for free, you might just be impacting a handful of customers to pay you for years to come.

Another way you could be extra valuable to your community is by opening your space to various churches, local meetings, and school events. This may seem like a small offering, but ultimately it gets more and more bodies through your door.

This means your center will be on the minds of more people for even more days of the year – which is always a great thing when it comes to those people deciding where to send their children and grandchildren.

Check out our advertising tips HERE!

Related Questions:

How many staff do I need to hire for my daycare?

The amount of staff you will need for your daycare will depend on how many children you are serving and what their needs are.

It is important for you, as the business leader, to find the proper balance between having enough help to take proper and safe care of your students and not throwing all of your income away on staff.

Try to make sure you don’t have too many staff that they do not know what to do with themselves, but always be certain you have enough to care for the kids under your roof.

What sort of activities should I do with my daycare kids?

Children need a variety of activities to remain healthy. Their parents may have other expectations as well.

If students are in your care for a long period of time, they may require meals and snacks.

Either way, their time with you should be a balance of learning (especially getting that homework done!), active play, mental engagement, and social interaction.

There are many ways to share time with your students focusing on each of these aspects of development. It might be helpful to try a few options and see which your kids enjoy the most. That way they are still getting the activity and engagement they need, but they have some say in the matter as well.

How Do I Start a Successful Daycare?

Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.

To learn more on how to start your own daycare checkout my startup course and documents here.