There are many reasons people decide to open an at-home daycare. It may be the most convenient work option for you if you care for your own children or grandchildren. You may love kids or deeply desire to be your own boss. No matter the reason, it is important to know how profitable this endeavor will be before you even start out.
A family daycare can make around $30,000 per year. This salary can vary depending on multiple factors including how many kids you take in, what your costs are, how much you charge, how many employees you hire, and what the cost of living is in your area.
While there are many factors that could increase or decrease the amount of money you make from a family daycare, it is important to recognize that it can be a lucrative career if you are willing to put the work in to build it from the ground up.
Requirements Come First
If you are asking a question about income, you are likely eager to get started with your new business endeavor. However, before we discuss how to make your new family daycare as profitable as possible, you must be sure to take all of the time you need to get your business legalized.
There are many basic requirements that must be handled when starting a business of any type, but there are even more when you bring children into the mix.
It is natural in our society to want to make sure our youth are safe, healthy, and well-cared for. For that reason, there are many legal requirements that all childcare givers must have:
- CPR and First Aid Certifications
- Building Inspections
- Daycare Insurance
- Instructor Education
- Child Proofing
All of these requirements will vary based on your location, but it is important to make sure you have satisfied your local regulations completely before beginning.
How Many Kids Am I Watching!?
The first factor that will affect how much money your family daycare can make is how many kids you decide you will watch at once.
There is much to consider with this decision, but you must first check to see if there are any legal requirements which will restrict you from having more than a certain number of children.
Some states allow only five or six children at once in an in-home daycare; other states may have even stricter requirements. The law changes all the time, so check with your local authorities to be sure your daycare remains legal.
Once you determine what your legal restrictions are, you then need to consider how many children you can handle at once personally. If you do not have much experience watching multiple children, you might want to practice watching some relatives to get a feel for it before diving in.
Another worthwhile consideration is how many children your home will adequately support. While most places of residence can easily accommodate multiple kids, if you are living in a small space, you may be more limited.
Ideal Roster Number
Once you have determined how many children you can legally watch, personally handle, and physically accommodate, you have found your ideal roster number.
Your goal is then to fill your daycare to that roster number. To make more money, you need to sign up more children. If you only have two children sign up, you will only make half as much as you might if you had four sign up. It may seem self-explanatory, but this is a huge aspect of making all the money you are able to with your family daycare.
Note: You should never take in more children than you or your space can handle just to try to make more money. While you want your daycare to be profitable, you also need it to be a safe environment for every child that attends.
The Basics: Expenses and Income
When considering how much money you can make from your family daycare, you need to go back to the basics: expenses and income.
- If you make more income, you will bring in more profit.
- If you make less income, you will bring in less profit.
- If you have higher costs, you will bring in less profit.
- If you decrease your costs, you will bring in more profit.
Yes, this seems simple – that’s why we call it the basics.
While it is certainly easy math, it is not difficult to forget what this means when it comes to your family daycare. For example, you may find yourself stuck trying to make more income if you are at your legal, personal, or physical limit. However, you can always make more money by raising your process – as long as your parents are willing to continue paying them.
When it comes to costs, you also might not think of every single cost that is going to come your way before you get started in business. As you go, you will become more aware of what your regular bills will include.
This list might help you get started:
- Snacks and meals
- Heating and cooling
- Daycare Business Insurance
- Wipes and cleaning supplies
- Craft and activity supplies
- Curriculum and education supplies
- Sports and playground equipment
Once you have determined your costs, you will likely find yourself falling into a routine of paying them. However, do not forget our basic math from earlier. If you can find a way to decrease your costs, you will bring in more profit.
This does not necessarily mean skipping the curriculum, sports equipment, or snacks, but it may mean finding ways to shop cheaper as you go. Perhaps you can find recycled curriculum, used sports equipment, or even snacks at a less expensive grocery store.
Every dollar that you save will just go right back into your pocket. This additional support will help you to serve your children for even more years to come.
We Need Help!
At some point, you may find yourself in need of additional staff for your family daycare. This can mean many things depending on how your daycare is set up and who is already involved.
If this is truly a family-run endeavor, it might mean another family member pitching in a bit more than they have in the past. If this is the case, they may not need to be paid since the whole household is benefiting from the business anyway.
If there are no family members to step in and help, you may actually need to hire someone to work full time or part time with you. The cost for this can vary widely.
If you are hiring a seasoned daycare worker or educator, you may find yourself paying much more than you would for a teenager who is lending a few hours per week as their first job.
No matter who you hire and how, make sure they are worth the extra cost to you. If they do require payment, this is money out of your paycheck. However, if their presence allows you to take on one or two more children, this may reap benefits above and beyond the cost.
Location Matters Most
Finally, pay attention to the area you live in and the local cost-of-living.
If you live in an area with a higher cost of living, parents will likely be able to pay higher prices for their child’s care. If this is the case, you do not want your prices to be too low because you will be missing out on available income.
If you live in an area with a lower cost of living, you need to make sure you do not price yourself out of the market. If parents make less money, they may not be able to afford higher prices.
Other Factors Worth Weighing
There may be other special circumstances worth keeping in mind as you weigh whether or not it is worth it for you to start a family daycare.
Ages of Children
The age range of children you accept could drastically affect the costs incurred.
If you only take babies and young children, you will need to consider naptime equipment and safe spaces for them to be contained. If you only take in school-age children, you may need larger playground equipment instead. If you take on all ages, you will have many costs to consider.
Lack of Travel
When you are adding up how much money you will make in this endeavor, consider how much money you will be saving by not commuting to and from your current job. Depending on your commute, this can be quite significant.
Is There a Need?
You want to be quite certain that there is interest in your business before you get started with your family daycare.
If it is going to take a long time to fill your child roster, you want to be sure you can hang in there for a few months before you start making more profit. Alternatively, if there is desperate need for this service, you will be able to get started right away.
Do You Have Children?
If you currently have children or grandchildren in daycare, consider any monies you will save on personal childcare when adding up how much you can make.
- How Do I Sign Up More Children for My Family Daycare?
A great way to add children to your roster is by advertising well. You can do this online and offline by spreading the word about your family daycare and making sure everyone knows the way you can serve them.
Another great way to spread the word about your business is by encouraging your current parents to tell other parents who may be interested. You may consider doing this through a referral program that offers a discount for parents who successfully sign up another family to your center.
- What Should I Look for in a Daycare Employee?
While you definitely want to make sure your potential employee loves children, you also need to make sure they are responsible.
When it comes to working with kids, there are a number of things that can go wrong at any time, so you want to make sure you are working with someone that you can trust.
Look for experience and solid references in any employee you take on. You might even want to have them interact with a child as part of their interview so you can really get a feel how they operate.
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.
Now you have counted the $$, checkout our 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.