Opening your own daycare center can be a very profitable and life-changing adventure! Your business can positively affect the lives of children and can also provide your own family with financial security. If you are in the process of starting a daycare center, you may be wondering what you can do to help your daycare get off to a great start. To help your daycare be successful, we have provided our top 7 tips for starting a daycare center!
Our tips for starting a daycare center include:
- Evaluate Your Market
- Research State Regulations
- Be Willing to Hire Help
- Complete Regular Inspections
- Evaluate Your Rates Regularly
- Be Visible Online
- Invest in Marketing
Evaluate Your Market
Before you complete any other tasks involved in starting a daycare, it is important to evaluate your market first. You want to ensure that the demand for childcare services is high in the specific area that you will be opening your own daycare.
While evaluating your market, you also want to evaluate what the common childcare rates are in your specific area. You can do this by calling around to 3-5 daycares near you that are established and have good reviews. You want to ask them what the rate would be for a specific age range, along with what the price difference would be for part-time or full-time care.
After calling the other daycare facilities, you want to evaluate the prices you were given. Do you see any common prices or is there a range all the daycare facilities were in? As you are starting your own daycare, we recommend keeping your prices in this range since this is the current rate your target market is paying.
The other benefit of looking at the other daycare facilities near you is it gives you an idea of what your competition is like. You want to pay attention to how many other daycare facilities there already are in your own community. What are your competitors known for? Is there something you can specialize in that will make you stand out?
The last piece of information we recommend evaluating for your market is the age range of children. Is there a specific age range of children that has the highest demand for your services? For example: In some areas, many daycare facilities have more toddler-aged children than any other age. If the schools in your area don’t have many after school activities or programs available, there could be a higher demand for school-aged children as well.
By knowing the age range of children that will be the most populated in your daycare, you will have a better idea of what supplies you will need to purchase more of. For example: If you have more toddlers in your daycare, you may need to consistently stock up on art supplies and snack options best suited for toddlers.
Another benefit of knowing what ages of children you will have the most of is it will give you insights on what you need to look for when you hire down the road. If your area has a high demand for childcare services for toddlers, you will want to ensure that you hire caregivers that have experience with caring for toddler-aged children.
Research State Regulations
Each state will have its own regulations and rules for operating a daycare facility. These regulations may include licenses, building permits, safety guidelines, the number of children you can have in your care, staff experience and amounts of exercise you need to provide children with each day.
To ensure that your daycare is operating legally, it is essential to first research your own state’s regulations for childcare services. We recommend visiting the National Database of Childcare website to locate your state’s childcare department, along with a list of your area’s specific regulations. You can find their website by visiting childcareta.acf.hhs.gov.
When you are submitting your application for a business license, it is common that you will be asked questions upfront regarding the regulations for your daycare facility. It is always better to research your regulations before applying for your business license, so you will be more prepared and will have to make fewer changes to your application.
Even after you have started your daycare business, we recommend regularly checking your state’s regulations to see if any changes have been made. It is best to check for any changes at least once a year, if not more often.
Be Willing to Hire Help
As you first open your daycare facility, it is possible to operate your business with one person. This will help you keep your costs low. This is especially common if your daycare is operated out of your own home. However, you will be extremely limited on how many children you can care for when you are the only caregiver. To help your business expand, it will be essential to hire additional caregivers.
When you begin the hiring process, we recommend doing a very thorough interview. During the interview process, it will be vital for you to ensure the potential employee has the experience you are looking for and will be a great fit for your daycare. We recommend seeking caregivers that have a minimum of 1 year of experience working in childcare.
Hiring additional caregivers will allow you to care for more children and it will also free up your own time to work more on building your business. If you are the only one caring for the children in your daycare, your time will be limited for activities like investing in advertisements or managing your online presence.
Another benefit of having additional help available is it allows you to take breaks when you are feeling overwhelmed or are having a difficult time with a child. Since working in the childcare industry can be very demanding, it’s important for all caregivers to get adequate breaks throughout every workday.
Complete Regular Inspections
When you are operating a daycare facility, the safety of the children in your care is always your number one priority. Therefore, we recommend completing regular inspections throughout your facility. You should be regularly checking toys, furniture and all play equipment that the children may use.
Children can often be hard on the things they are using, and toys can get broken easily in the daycare environment. By regularly checking all the toys in your daycare, you can see if any toys have broken into small pieces or have any sharp edges that may be dangerous to the children. We recommend disposing of all broken toys regularly.
For play equipment and furniture, you want to ensure that nothing has come loose or may break when a child is climbing on it. For example: If part of your playground has come loose, a child may fall and get hurt when they climb on it.
Completing regular inspections should be done approximately every 2-3 weeks. This will also give you the peace of mind in knowing that your facility is running properly. You won’t have to worry about the chances of anyone getting hurt by a broken toy or equipment.
Evaluate Your Rates Regularly
Deciding on the rates you will charge your clients is a vital part of starting your daycare business. However, we also recommend regularly evaluating your rates as well, even after you have opened your business. This will ensure your business continues to be successful.
The demand for childcare services in your area will fluctuate over time. Therefore, the competitive pricing for a daycare facility can also change. By regularly evaluating your rates, you can ensure that you are still charging the right price for your area and keeping up with your competition.
Another factor in evaluating your rates is the cost of living, which will consistently increase over time. If you avoid evaluating and raising your rates, your business can end up losing money. If all your business expenses are increasing and you’re not receiving a higher amount from your clients, your business finances will end up going negative.
We recommend completing the same task that you used to find the competitive rate in your area when you opened your business. Call around to 3-5 different daycare facilities in your area and ask for what they would charge per child. You should be completing this activity once a year to ensure that you have the best rate for your business as possible.
Be Visible Online
Once you’ve started your daycare business, we recommend taking the time to ensure your business is easily visible online. By being visible online, your potential clients will have an easier time locating your business when they’re searching for childcare services.
The most cost-effective and quickest way to be visible online is through social media. You can create a Facebook and Instagram business account for free. Both can be created within a matter of minutes. You can use these accounts to share your rates, any specials you may be having and if you have any current openings in your daycare.
If you have more time available to invest, we recommend also creating a website. You can easily build your own website through a website host like GoDaddy. Many of the website hosts offer services with a website builder where you can design and create your website on your own, even without any coding experience. These can often range anywhere from $15 to $40 a month to keep the website running.
Invest in Marketing
Our last tip for starting your daycare business is investing in marketing. Once your business is off to a solid start and you are ready to accept more clients, marketing will be a valuable tool to help you reach more of your potential clients.
If you don’t currently have a budget for marketing, we recommend starting with ways to increase your word of mouth marketing. Word of mouth is the quickest way to build your business. Parents are very particular about who they trust with their children and they will often seek the opinions of their family members and friends.
If you have a positive relationship with your current clients, they will be more likely to recommend you to their family and friends who may be in need of childcare services. Therefore, the first step in increasing your word of mouth marketing is ensuring you have a positive reputation and relationship with all your clients.
The second step in increasing your word of mouth marketing is to think of ways to encourage your clients to share about your business. You can easily do this through referral programs, where you offer your clients a discount or a special for everyone they refer to your business (once the new client purchases services).
If you have a small budget for marketing, we recommend investing in social media ads. Once you have created a Facebook business account, you can easily set up ads on your own. The best part is you can control the amount of money you spend on each ad. You can also add in the characteristics of your target market to increase the success of your ad.
How many children can one caregiver watch in my daycare?
The number of children one caregiver can watch at one time will depend on your local state requirements and the age of the children in your care. Each state will vary regarding their regulations for how many children one person can watch.
If the children are older, one caregiver will be able to watch more children at one time. For infants, we recommend one caregiver never watch more than 2-3 infants alone at one time. This is due to infants requiring large amounts of attention and care.
What are the costs of starting a new daycare business?
The cost of starting a daycare business will depend on if you are starting your business out of your home or if you will be renting a commercial building. Starting your business out of your home is a great way to keep costs on the lower end of your new business.
You will also have expenses like a business license, any required permits, and your supplies. The cost of a business license and permits will vary depending on your specific location. Supplies can go anywhere from around $200 to in the thousands, depending on how much you are looking to spend.
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.