The Pros & Cons of Owning a Daycare Business

Owning your own daycare business can be a very rewarding endeavor that can also provide you with a salary that will pay the bills. Before you decide to open one though, you need to figure out if this is the right path for you. Whenever you’re considering any kind of business venture you need to look at the pros and cons that come along with the type of business you might want to open. For our purposes, the type of business is a daycare.

Here are the pros and cons of owning a daycare business that should be considered before making a decision to open this type of business.

Pros of a daycare business:

Not a lot of required education
No daycare for your own children
High demand for childcare that will never go away
You are your own boss and set your own salary
With an in-home daycare, some household expenses can be tax write-offs
Highly rewarding career

Cons of a daycare business:

May have to work long hours
Payscale isn’t usually the highest
Adhering to safety regulations can be costly
Your own children can have feelings of jealousy
If yours is in-home daycare, you and your family won’t have much personal space

Now that you know what the pros and cons are, let’s dig a little deeper into these so you can make the most informed decision possible.

Table of Contents

Pro #1: Minimal Required Education

The educational requirements for opening a daycare business are usually just basic education only. Many governments require the daycare owner who is applying for a license to have a high school diploma or a GED.

There is not a requirement, in most cases, stating that daycare business owners have to have a college degree. That being said, there will be some instances where it is required, or in the very least, preferred. If you live in an area where daycare business directors need to have a college degree in something pertaining to caring for young children, then you’ll have to look into furthering your education personally or appointing someone else as your daycare center director.

Keep in mind that just because there is no requirement for education doesn’t mean that there might not be an expectation. It’s best for you to take in as much education surrounding caring for and helping the development of young children as possible. It will show that you are taking this business venture seriously and shows potential customers that you can provide a safe and healthy environment for their children to spend time in every day.

Pro #2: No Daycare Expense For You

If you are the owner of your own daycare business then you won’t have to put any of your own children in daycare. That means you won’t have to pay for daycare costs.

Many parents find that paying for daycare eats up all or most of their income. That’s tough on a family. Choosing to open your own daycare business lets you save money by not having to pay for childcare for your kids and gives you a source of income.

Outside of just the money part of things, not having to send your kids to daycare means that you retain control of their upbringing. We’re not saying there’s anything wrong with sending children to daycare, there are actually a lot of good things that come out of it, but when your kids are with you all of the time, you know what they are being taught because you’re the one doing the teaching.

Pro #3: There Is a High Demand for Childcare and It’s Not Going Anywhere

The need for childcare has only gotten greater over the course of the last few decades. According to The Center for American Progress, less than 33% of all children have a parent that stays at home full-time now. That has changed from a generation ago when more than half of the households in America had one parent who stayed home on a full-time basis.

With these huge changes in who is providing income for the household by going out to work, the childcare industry has seen higher and higher demand for their services. This level of demand is not going to disappear either. Many families find it necessary for there to be two incomes to provide for the needs of the household. This coupled with the views of the world changing and the emergence of various kinds of family structures has done a lot to increase the need for more daycare center businesses.

Pro #4: You’re In Charge

A huge pro to opening your own daycare business is being your own boss. The only people you have to answer to are the governing authorities, and the parents of the children in your care to some level.

You won’t be working for another individual, though, who makes all of the day-to-day decisions on how things are run. You are that person. You can set things up as you see fit.

You will also decide how much your salary will be. Of course, much of this decision depends on how much it costs you to operate the daycare center business, but ultimately the decision is still yours. You’ll decide how much to pay your employees, also, if your operation requires that you have more help.

Pro #5: In-Home Daycare Tax Write-Offs

There are two kinds of daycare businesses you can decide to open: an in-home daycare or a separate daycare facility. Should you choose to open an in-home daycare, you will be able to write-off some of your household expenses at tax time.

There are household expenses that will be involved with running a daycare out of your home. You’ll likely have higher utility bills and water bills. You’ll have to spend more for cleaning supplies, products such as toilet paper, and other items that you regularly use in your home. Because these things are also being used in the operating of your in-home daycare business, you can include them as tax write-offs.

Pro #6: Your Career Will Be Very Rewarding

Running a daycare business means that you’ll be providing families with a service that they don’t just want, they need. You are helping that family be able to accomplish what they’re trying to do and giving them peace of mind by providing a safe place for their children to be cared for when they are not able to.

You will get to be a huge part of the development and growth of the young children that you care for. Children are full of curiosity and have the ability to learn so much. You’ll get to watch them evolve and give them the guidance they need to do that. In return, you’ll often get a lot of hugs and smiles and appreciation from parents who feel they couldn’t do what they’re doing without you.

Daycare businesses will require a lot of work from you and some long days, but the payoff is really rewarding. Just keep in mind that the best things in life usually come with a lot of work. If this is something you really have a passion for, it will be worth the effort.

Con #1: The Hours Can Be Long

You should do research in your area before you decide on your hours of operation. You want to be able to provide the childcare coverage that is needed by families who may choose to use your daycare.

In some places, you’ll need to be open very early in the morning and close past dinner time. Those who are going to work will need to be able to drop their kids off before going to work and have to have the time to get to your daycare center from their places of work to pick them up. So even if there are a lot of people around your location that work from 8 a.m. until 5 p.m., you can’t be open for just those hours. You need to open at 7 a.m. and close at 6 p.m.

Consider this also. Childcare doesn’t just go away if you’re not feeling well one day. Those families are counting on you to care for their children no matter what you feel like. If you are a one-person operation, you may have to work through your woes some days, and when that happens those days will feel even longer than they actually are.

Con #2: Compensation Is Moderate

For all of your efforts as a childcare provider, the pay isn’t the greatest compared to some other industries. This is going to vary based on where you’re located and how big your operation is, but in the grand scheme of things, it’s safe to say you probably aren’t going to get rich off of owning a daycare business.

In lower-income areas, you can expect to make about $29,000 as a daycare worker. In more prominent areas, with a greater cost of living, you can make closer to around $60,000. For greater insights into how much money you can make, check out our post on this very subject.

Con #3: Safety Guidelines Can Be Costly

Having safety guidelines certainly is not a con by itself. But paying for what it takes to adhere to those safety guidelines can be a con to opening a daycare business.

If you are opening an in-home daycare business you will likely have to pass a health and safety inspection. In some cases, there may be upgrades and renovations required for you to be permitted to open the daycare business in your home. This can be a costly undertaking.

A commercial facility will have to be made safe also. How much you’ll have to spend to get your daycare center outfitted appropriately to meet the safety regulations in your state will depend on how much has to be done to the property.

Con #4: Your Children’s Feelings May Suffer

You may find that you’re met with some new feelings and emotions from your own children when you’re caring for other people’s children. Your children might feel jealous, sad, or neglected in some way.

This is natural for young children. It’s not something you should be afraid of or take personally. You should just prepare for it and be ready to comfort your children. There are a number of things you can do as a parent to help your kids cope better with jealous feelings. The Washington Post highlights nine good things you can do to get your children through those emotions in a healthy manner.

Con #5: An In-Home Daycare Business Takes From Your Personal Space

If you decide to go the in-home daycare route, you’ll be giving up yours and your family’s personal space. Unless you have a designated area in your home that provides some separation between your daycare business and your home, you will have children in your bedroom, in your bathrooms, in your kitchen, and everywhere else they can get to.

There are things that will be broken, dirtied, missing, and moved about. Your work-life balance will be virtually non-existent, since your work is home with you every day. It’s something that can cause a lot of stress in families so you should think about that before making the decision to open this kind of daycare business.

There’s Good and Bad In Almost Anything

There isn’t much in this world that doesn’t come with both good things and bad things. The pros and cons of opening a daycare business are important to consider. There are plenty of good things like being your own boss, having a rewarding career, not needing tons of formal education, and more. But there are also some cons, including low pay scales, long hours, costly safety regulations, and your own kids’ reactions. Weigh the pros and the cons against each other and see what comes out on top for you before you make your decision.