Based on the average annual growth rate of approximately 3.5%, new daycare centers are continuing to pop up around the United States. When you decide to open a daycare, you will be faced with this decision of whether you should build a daycare center from the ground up, or whether you should buy into a daycare franchise. If you decide to build a childcare facility from the ground up, there are going to be certain expenses that you are going to accrue other than simply paying a franchise fee.
The average daycare center is a one-story building, with 12-foot ceilings. The average size of a childcare facility in the United States is 10,000 square feet. To construct a building of this size, will cost you $1,945,700. Factors that go into the cost of constructing a daycare center include architectural fees, contractor fees, labor costs, and additional costs to open a shop, according to rsmeans.com. You can also expect to spend approximately $2,500 on equipment for your daycare, and anywhere between $2,400 and $3,600 for supplies.
Architectural Fees for a Daycare.
The first step to building a daycare center is designing the building, and having an architect draw up your plans. While fees will vary between architects, you can expect to spend about $160,700 in architectural fees, which will be roughly 9% of your total cost of building your childcare facility. This amounts to $16. 07 per square foot. While this may seem like a substantial cost to pay for having somebody design your building, it is a necessity when it comes to the construction of your daycare.
Remember, you are paying for the architect’s expertise in design, layout, building codes, and other aspects of the construction of which you may not be aware. An architect is somebody who can take an idea that exists in your head, and put it down on paper. This is why architectural fees are among the most important fees associated with building your daycare. Once you can see your beautiful new daycare center, you will see that architectural fees are money well-spent.
Contractor Fees and Labor Costs for a Daycare.
For consolidation purposes, I am going to combine these two categories into one. There are several different types of contractors that you will need to construct your daycare center, and there may also be other types of general labor that you are going to have to pay for to get your facility built. Contractor and labor costs are going to be approximately 25% of your construction budget, costing you a total of $357,000. This amounts to $35.70 per square foot.
Among the many types of contractors that you are going to have to hire will be general laborers, heavy equipment operators, construction foremen, electricians, plumbers, bricklayers, roofers, and many more. There are other jobs at are going to have to be done, which may not require the expertise of a contractor. For example, you might have a friend who is in the flooring business. You may want to use his business to lay down your new floors. Once the contractors have finished construction, you may also want to hire a cleanup crew to come in and touch up a few things they may have missed.
Equipment and Supply Costs for a Daycare
Whether you are building your childcare facility from the ground up or purchasing an existing daycare center, there are going to be equipment and supply costs associated with your purchase. The start-up costs associated with purchasing an existing daycare center cost anywhere between $10,000 and $50,000, which normally includes the equipment found in the facility. In this case, you will probably only have to replace a few pieces of equipment or make upgrades to older equipment. However, according to Next Insurance, you can expect to spend up to $2,500 in equipment when building a daycare center from the ground up.
Your supplies will also cost you anywhere between $2,400 and $3,600, which is an average of $50 per child, per month. It is important to remember that you will have supply cost no matter which path you choose. Some of the equipment purchases you can expect to make include a refrigerator, a washing machine and dryer, an oven with a stovetop range, and a microwave. Whether or not you choose to include computers and software in your daycare center is optional. Some of these supplies you are going to have to purchase are going to include arts and crafts supplies, hand soap, tissues, diapers and Pull-Ups, and Clorox wipes.
Find a sample Daycare budget here.
Additional Costs to Open a Daycare.
After the building is up, and you have made all of your necessary equipment and supply purchases, there are going to be additional costs involved in opening up your daycare center. These are purchases that you will need to make that do not fall under the categories of equipment, supplies, or construction. You can expect to spend roughly $2,500 on additional purchases such as furnishings, daycare operating software, and learning toys, just to name a few. However, these purchases will be necessary for the daily operations of your daycare center.
As we have already covered, a few additional options you may choose to put in your daycare center are computers and learning software for the children in your care. Most parents are looking for something more out of their daycare center, rather than a place that nearly occupies their children while they are at work. Installing computers and learning software in your daycare center can give you the edge over most daycare centers in your area because you will have the reputation of having an advanced curriculum in your daycare that places a strong emphasis on learning.
In conclusion, if you are purchasing an existing daycare center, you can’t expect your startup cost to be between $10,000 and $50,000. However, if you are building a brick-and-mortar daycare center from the ground up, you can expect these calls to be $1,945,700 on average for a one-story daycare center that is 10,000 square feet. The costs associated with opening a daycare center include architectural fees; contractor fees, and labor costs. You can expect to spend an additional $2,500 on equipment, and up to $3,600 extra on supplies for your childcare facility. There are also going to be a few extra costs to open up your new daycare center.
Are there any type of licenses required to start an in-home daycare? Starting an in-home daycare can be an affordable and easy way to earn a living. However, as is the case with many rules and regulations regarding daycare centers, this is determined on a state-by-state basis. Some states require you to be licensed, even if you are running an in-home daycare. There are certain safety and health guidelines that you’re home we’ll have to meet if you want to run a daycare out of it. The website childcare.gov has a list of the requirements in each state.
Should your daycare become licensed and accredited? While a general business license is typically needed to open a daycare center, you can also become licensed and accredited by a state child welfare agency. There may be a little extra work involved in getting your daycare center license, but the work will be well worth it in the end. Parents are much more comfortable sending their children to a daycare center that is licensed and accredited. Daycare licensing is yet another topic that is determined on the state level. Therefore, they are are different regulations for each state. Again, our friends at childcare.gov have provided a list of items you will need to be familiar with to become licensed.
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.
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.