Starting your own childcare service business can be a very financially and emotionally rewarding adventure! If you have decided to start a daycare, you probably are wondering how to get started when it comes to opening your business. Before you can start caring for children in your daycare, the first step is obtaining your license! Getting your childcare license does not have to be complicated with our steps included below.
The process of getting your childcare license includes knowing your local regulations, picking a business name, deciding on your location, getting permits for your location, complete any required training, purchasing business insurance and then finally applying for your actual license! Getting your childcare license can take anywhere from 2 months to a year, depending on how much time you have available to complete all your required steps.
Knowing Your Local Regulations
Before you complete any steps in acquiring your license, you first need to thoroughly research your own state regulations when it comes to providing childcare services. Each state will have various regulations that they require childcare providers to follow in order to apply for a childcare license and to operate their business.
Most states will have a specific department for childcare services and will often also have a page on their website that is devoted to childcare licensing and regulations. If you are having trouble finding your own state’s childcare department, you can also visit the website for the National Database of Childcare. This website will help you locate your state’s childcare department, along with providing a list of your area’s specific regulations. You can find their website by visiting childcareta.acf.hhs.gov.
It’s important to have a very clear understanding of what your own state requires because this will help you be more prepared in applying for your license. This step will save you time over the long run. You will know exactly what tools you need to acquire before you can apply, like business insurance and you will know what steps you need to take.
If you have a clear understanding of what your own state requires for your license, the chances are higher that you won’t have to make any revisions or edits to your application after you’ve submitted it. You will know beforehand what is required of you and you can make sure that you provide everything during your first submission.
Picking a Business Name
You need to decide on a name for your business before applying for your license because your name will be included throughout your application for your license. Your business name will be what your state recognizes you as and it is also how they will keep track of all your records and files.
Deciding on a business name is not a step that you want to take lightly. Your business name will not only be on file with your state, but it will also often be the first thing your potential clients learn about you. Your business name should stay with you for the life of your business and should not be changed, if at all possible.
When deciding on your business name, you want something that will be easy for your potential clients to pronounce and remember. It should give a very clear vision of what services your business provides. Therefore, we recommend including the words daycare or childcare somewhere in the name.
The most important factor in deciding on a business name is if it’s already in use in your state. If another daycare business is already using the name that you like, you will need to pick a different business name. You will not be able to successfully register your business and get your license if your name is already in use by another business in your state.
Another piece of advice for picking your name is checking to see if a website URL is available for the names that you like. As you launch your business, we ultimately recommend investing in a website and it will be extremely helpful to have a business name where the URL is available. For example: If the name you pick is Advanced Childcare Services, you would search to see if advancedchildareservices.com is available. If it’s not, you could try adding your state at the end like advancedchildcareservicesutah.com.
Deciding on Your Location
The location of your daycare plays a large factor in the process of getting your license. Most states will have very different regulations for daycare businesses that are operated out of the owner’s home verse daycare businesses that are operated at an actual center.
As you are starting your daycare business, it is very common for the daycare to be operated from a home. This is often an easier option because it will help you keep costs much lower. For most states, there are also usually fewer regulations and requirements for daycares that are operated from a home.
Before deciding on the location for your business, you want to really evaluate your home to ensure that you have the room to operate your daycare out of it. Homes with large living spaces, like an open basement, are ideal for daycares. You also want to ensure that you have outside space to allow the children to play or a park nearby where you can take the children regularly.
If you plan on growing your business very quickly and caring for large amounts of children, then we encourage you to consider getting a commercial building for your daycare. Operating your daycare in your home will limit the growth of your business and the number of children you can care for due to the amount of space available.
If you have decided to get a commercial building, you want to ensure that it still has the space available for your business. It’s also important to make sure that the monthly rent for the building fits within the budget for your business. Going far over your budget is a quick way to put your business in jeopardy.
Getting Permits for Your Location
Once you have decided on your location for your business, it is time for you to get all the required permits from your state for your building. Like other regulations, each state will have different requirements for the buildings a daycare can operate in.
This step can include having someone from the state coming to your location and doing an inspection of the space. Therefore, it is important to have your location ready before you complete this step. We recommend having everything tidy and put in their proper places, making it easy for the inspector to navigate your location.
Some things that may be required for your location are certain square footage available for the children, safety precautions to be taken, adequate bathrooms and outdoor space. You can often find a list of what is required in your own state on your local government’s website. This will help you prepare and ensure your location meets each requirement.
Depending on if an inspection is required in your area, you want to keep in mind that getting your permits for your location can take time. This process can generally take up to a month or longer if you need to make changes to your building. Therefore, you don’t want to plan to open for business right away during the time that you are getting your building permits.
Complete Any Required Training
In order to get your childcare license, most states will require the business owner and any employees to complete certain childcare training before they will provide a license and allow you to open for business. Your specific training requirements should be found during the first step when you research your state’s regulations.
For most areas, the childcare training that is required is not lengthy in time. It will generally consist of attending and passing a variety of short classes. Once you have passed all the training, it is important to keep any certificates or paper documents you received that show that you took the class. When you go to apply for your license, your state will often require proof that all of the training has been completed.
Some states may also require that employees be certified in CPR before opening for business as well. In some states, you will be required to have a certain length of experience in providing childcare services as the business owner, although this requirement is less common than completing the training. Read more about training and certifications here.
Purchase Business Insurance
Most states will require proof of business insurance before you can successfully apply for your business license to operate a daycare. Each state will vary in the type of insurance they require and the amount of coverage, but most states will have some sort of insurance requirements. This acts as a form of protection for your business and the children in your care.
When looking for business insurance, we recommend getting 3 to 5 different quotes from various insurance companies. This will help you get the best deal for your business. You want to evaluate the amount of coverage included, the deductible, the cost of the policy and any other benefits that the policy might come with.
When purchasing insurance to operate a daycare business, it’s important to not skimp on your coverage. By having adequate coverage, you will protect your business in the long run. If you don’t have enough coverage, you could end up being personally responsible to cover any extra costs that your insurance won’t cover (if an accident arises).
Apply for Your License
Once you have gathered all of your important documents and resources, it’s time to fill out your application for your business license and submit all your information! This is your final step in getting your license for your childcare service business.
As mentioned earlier, it is essential that you have everything you need before submitting the application. If you fail to include certain information or pass a specific requirement, you will have to revise your application. This will add to the length of time it takes to get your license and can also add to the cost of getting your license.
For most states, your application can be filed on your local government’s website. If this is not available in your state, you can submit your application by visiting your local city’s courthouse. You want to plan on your application taking anywhere from 2 weeks to 2 months to be processed and approved.
Once your application is approved and you have your license, you want to keep this document in a safe place! We also recommend hanging a copy of your license up in your daycare where your clients can easily see it as well, verifying that you are licensed and running your business with a solid foundation!
Am I required to have employees to open a daycare business?
No, you are not required to have employees in order to start a new daycare business. As you are starting and you are only caring for a few children, you can often operate the business by yourself. However, you will need to hire employees in order to grow your business.
For most states, one adult can only care for so many children at one time. Therefore, you will need to hire employees in order to increase the number of children you can care for. Hiring employees can be an excellent way to bring in more income and grow your business (by being able to accept more clients).
What expenses will I have as a new daycare owner?
As a new daycare owner, you will have specific expenses for your new business. You will need to cover the cost of getting your license, permits and business insurance. You will also need to purchase toys and play equipment for the children.
Other expenses you will have include cleaning supplies to keep your daycare clean and free of germs. You may also need to provide snacks and meals for the children in your care. Your business expenses will often start lower as you are just starting and then will increase as your business continues to grow over time.
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.
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Meet Shawn Chun: Entrepreneur and Childcare Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online daycare business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a childcare business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Daycare Business Boss: I want to help childcare business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.