How To Start A Daycare Center In Texas

If you’re wanting to start a daycare facility, Texas is a wonderful state to do so. Texas has a relatively normal amount of regulations for daycare facilities, but they offer helpful training and small-business resources to help you along the way. Before you launch your daycare facility and start caring for families, there’s a number of things you need to do to ensure success.

If you are looking to start a daycare center in Texas, there are the 5 steps you need to take:

Create a business plan
Become legally compliant
Create a marketing plan
Find a location
Purchase equipment
Hire employees

Table of Contents

1. Create A Business Plan

Before anything else you should develop a business plan to answer questions such as:

Is this a viable business?
What’s the market landscape?
What will my expenses be?
What’s my budget?
When will I begin to turn a profit?
How will I find customers?
What type of daycare business will this be (Home-based, privately-owned, franchised)

There’s a number of other questions to address but these are a good starting point. Your business plan highlights some of the challenges you will face so you can prepare a plan for how to solve them.

Your business plan is meant to be a dynamic document that evolves as your business grows. Make sure you are updating your business plan regularly so it aligns with your goals and current status.

If you’re going to be applying for funding you will need to make a more extensive business plan, the standard format includes the following:

Executive Summary
Company Description
Market Analysis
Organization & Management
Service or Product Line
Marketing & Sales
Funding Request
Financial Projections
Appendix

To help you get started, see below for an example of each section of the business plan.

Executive summary

Head Start Daycare is a start-up business in the North Dallas area. Our mission is to provide safe, affordable, and engaging child care for the middle to upper-class parents of Dallas. After doing extensive market research we found that many customers are looking for safety and affordability in their daycare provider.

Company description

Head Start Daycare is a home-based child care provider service in the Dallas, TX area.

To satisfy the unique needs of customers in our area, we will be offering unmatched safety at our facility, while also keeping rates at an affordable level. Head Start Daycare will have small group sizes paired with low overhead costs in order to achieve these goals.

Head Start Daycare will be positioned as the best daycare option for working parents that need affordable childcare along with peace of mind while they are away from their child.

Market analysis

We will be focusing on families in the North Dallas area so families don’t have to drive too far to our facility.

Our market research showed that many of our competition focuses on adding activities, day trips, and fancy toys to their offering. After talking with some parents in the area we found that this was not what they were looking for and that there was a need for an affordable daycare facility that offers unmatched safety.

Organization & management

Stephanie Wilson is the sole proprietor of Head Start Daycare. She will be the only employee for year 1, with plans to hire 1-2 employees year 2 and year 3.

Services offered

The services Head Start Daycare will offer are:

Social
- Playtime throughout the day
- Conflict resolution in real-life scenarios
- Games that involve teamwork
Educational
- Basic math, reading, and writing skills in a fun environment
- Educational toys and games available
Safety
- Stephanie Wilson is a licensed EMT
- Group sizes will be kept small to allow for sufficient attention to each child

Marketing & Sales

Our target market is working parents between 25-45 that have an annual household income between $50,000-$150,000. This market typically needs both parents working once the child has gotten to age 1 and therefore needs help with child care.

We will reach these customers through a combination of digital marketing, print advertising, and a referral program.

Our brand will make our customers feel like their child is in the best hands while they are at work.

Funding request

We are not currently asking for any additional funding.

Financial projections

Start-up costs are projected to be between $1000-2500

We project $25,000 in sales the first year. We are hoping to increase sales gradually at a rate of 30% each year. If we continue to grow at this rate we expect to purchase a new facility in year 4.

You can find more information and sample business plans here, Write your business plan

2. Become legally compliant

It is important to do your research to make sure you are compliant with Texas laws and business regulations. Some things you need to do:

Register your unique business name with the Texas Secretary of State’s office
File your federal tax identification number with state and local revenue offices
Choose what type of business to register (Sole proprietorship, partnership, LLC, or corporation)
Obtain a federal employer identification number from the IRS office and register the number with state and local agencies
Obtain a business license from the Department of Revenue
Obtain business insurance
Join the National Child Care Association (NCCA) and any other associations you want to be apart of, you can find a list here
Join your local chamber of commerce

If you need more information here are some more resources on rules and regulations in Texas:

3. Create A Marketing Plan

In order to connect with customers effectively, you need to have a solid marketing plan. Marketing is not just advertising; it is how your entire business is perceived by customers.

We are going to go through the key components to creating an effective marketing plan. Not every daycare will need to implement every piece of marketing material, choose what is right for your business and your budget.

Identify your ideal customer

The first step to creating a focused marketing plan is identifying your ideal customer. The reason you do this is to help you tailor your marketing message to reach the customers that need, want, and are excited about your service.

“When you market to everyone, you market to no one” – Diana Khoury

As a daycare, you are obviously going to be targeting parents in your geographic area. But not every parent is needing child care services, and not every parent is needing your specific child care services.

When you can narrow your message to target your ideal customer, you will be more effective and get more responses.

To develop your ideal customer, the basic information you need is:

Age
Income
Family size

But it is highly recommended you go deeper and ask questions like:

What are their pain points?
What are they looking for in a daycare?
What would they pay a premium price for?

It is best to write out all this information on 1 sheet of paper and keep it handy. You can also print out a sample picture of your ideal customer. This can seem strange to some, but the more precise your ideal customer, the easier the rest of your marketing tasks will be.

SWOT Analysis

A great tool that can help in your marketing efforts is a SWOT analysis. SWOT stands for:

Strengths
Weaknesses
Opportunities
Threats

Create Your Marketing Message

Your marketing message should reflect your brand and talk directly to your ideal customer. A common mistake businesses make when creating their marketing message is they talk about how great they are.

Your customer doesn’t care about how great your business is, they care about what you can do to solve their problems.

Another common mistake is talking about the features of your service instead of the benefits. Similar to the previous issue, your customer wants to know how you can benefit them, not how many toys you have available.

Some examples of bad and good marketing messages:

Bad

We help your child stay active.

Good

Your child will be exhausted from all the fun and learning they experience at our center.

Bad

We use strict safety guidelines.

Good

You will have peace of mind knowing that your child is in the safest hands possible.

If you keep your ideal customer in mind and what they are needing, you will have no problem creating impactful marketing messages.

Networking

Networking is a wonderful way to establish your business in the local community. Attending local networking events will put you in touch with customers, provide referrals, and can connect you with other businesses in related fields such as:

Schools
Summer camps
Tutors

There’s plenty of networking opportunities in Texas, some great places to start are:

Provide Excellent Service

You can spend endless amounts of money on advertising, create a beautiful website, and be ranked #1 on Google’s search engine, but if you don’t provide top of the line care for your customer’s children, all these efforts go to waste.

The great thing is, you can spend zero dollars, have an OK website, and sometimes come up on search results, but if you have EXCELLENT care and customer service, your daycare will still thrive.

With every customer interaction make sure you are genuine and treat them with respect and kindness. If you do this you will lay a solid foundation for you to build your business on.

4. Find a location

If you are not going to be operating out of your own home you will need to begin the search for a location for your daycare. Picking the right location for your daycare center can be a huge factor in how successful your business will be.

Finding a good realtor and utilizing online resources such as Zillow can be a good start to finding your perfect location.

Texas commercial realtors

5. Purchase equipment

This is a pretty self-explanatory one, there are certain things you need to have on hand at your daycare at all times. The important part is finding reliable sources that will save you money and not give you any problems you don’t need.

Some typical items you need when starting your daycare:

First aid kit
Board games
Toys
Art supplies
Cleaning supplies
Diapers and wipes
Kid-friendly furniture
Napping mats

You can buy everything at local businesses, but there are a number of online retailers that specialize in daycare products and fun activities.

Some of the best that we’ve found are:

5.Hire Employees

Your employees are perhaps the most crucial part of your business. Your employees will be the ones interacting with children and parents on a regular basis.

Finding help for the right price can be a bit of a challenge, but if done right will save you money while keeping your customer service at an elite level.

Guide to finding great employees in Texas:

Use online platforms to find and sort through prospects
1. You can use social media and online job sites to post your jobs and get qualified candidates. Top platforms are:
Ask the right questions
1. It can be difficult to find the right people just from an online search or a quick interview. It is more important to hire based on attitude compared to experience in this situation. When communicating over the phone or performing the interview, look for these traits to increase your chance of getting a great employee:
  1. Are they on-time for the interview?
  2. Do they have a positive and friendly demeanor?
  3. What’s their current employment situation?
  4. What are some of their goals and aspirations?
  5. What are some things they are wanting to get out of this job?
Keep your great employees happy
1. Once you have some employees hired, inevitably some will be better workers than others. Identify these employees and make sure they are satisfied with their position. This can be done with more financial compensation, but treating your employees with respect and kindness also plays a big part.