How to Start a Daycare Business in 2025

Starting a daycare business is more than a passion for caring for children—it’s about building a safe, trusted, and thriving space for families in your community.

Whether you’re envisioning a home-based daycare or a full-scale childcare center, turning that dream into a reality requires the right mix of planning, compliance, and smart business strategies. This guide will walk you through every step, from legal requirements to marketing your services and landing your first clients.

Let’s dive in!

Before you get into business plans or start scouting locations, get crystal clear on why you want to start a daycare. Your motivation will guide every decision you make—from the type of facility you open to the families you serve.

Are you driven by a passion for early childhood education? Do you want a flexible business you can run from home? Or are you envisioning a larger center with multiple classrooms and staff?

Once you know your why, it’s time to choose your model. Here are two of the most common options:

Home-based daycare:

• Lower startup costs and simpler operations
• Familiar, cozy environment for children
• Typically limited to smaller groups, which can mean less revenue potential

Center-based daycare:

• Higher startup costs but more room for growth
• Professional facility designed for larger groups and multiple age levels
• Greater earning potential but with more complex staffing and compliance requirements

Choosing your daycare model will also help you decide what age groups to serve. Infant care, for example, has higher licensing requirements and staffing needs than programs for preschoolers or after-school care for older children.

Childcare is one of the most heavily regulated industries—and for good reason. Parents want to know their children are safe, and states want to ensure facilities meet strict health and safety standards. Before you start recruiting families or setting up your space, you need to understand the licensing and legal requirements for running a daycare in your area.

• Start with your state’s childcare agency: Every state (and some cities) has different regulations for daycare centers and home-based providers. These rules typically cover staff-to-child ratios, facility requirements, background checks, and mandatory training.
• Prepare for inspections: Most states require pre-opening inspections for safety, cleanliness, and accessibility. Be ready to address fire safety, sanitation, and emergency preparedness before you welcome your first child.
• Get insured: Liability insurance is a must for protecting your business from accidents or claims. Even small, home-based providers need coverage—it’s peace of mind for you and reassurance for parents.
• Don’t forget contracts and policies: Create clear enrollment agreements, payment policies, and health guidelines. These documents set expectations for parents and help you avoid misunderstandings.

A great daycare starts with a great plan. Your business plan is more than a formality—it’s your roadmap for building a sustainable, profitable childcare service that meets the needs of families in your community.

Why does your daycare exist, and what makes it unique? Maybe you’re focused on play-based learning, bilingual education, or flexible hours for working parents. Your mission will shape everything from your curriculum to your marketing.

Startup costs vary depending on whether you’re running a home-based daycare or a full-scale center, but expect to account for:

• Licensing and inspection fees
• Rent or renovations (if applicable)
• Furniture, toys, and educational materials
• Insurance and legal costs
• Initial marketing expenses

Ongoing costs will include staffing, utilities, food, supplies, and continuing education for you and your team.

Research what other daycare providers in your area are charging. Aim for a balance between affordability for parents and profitability for your business. Some daycares offer discounts for siblings or extended care—these can make your services more attractive to families.

A well-thought-out plan not only guides your decision-making but also helps secure funding if you’re applying for grants, loans, or investors.

Your daycare space is more than four walls—it’s where children will learn, play, and feel secure. Design it to be functional, inviting, and age-appropriate.

• Safety first: Cover outlets, secure furniture, and ensure easy access to emergency exits. Install safety gates and childproof hazardous areas.
• Engagement matters: Create dedicated zones for reading, play, meals, and naps. Stock them with toys, books, and materials that encourage exploration and creativity.
• Think indoors and outdoors: If possible, provide safe outdoor play areas with secure fencing and shaded spots.

A well-organized, cheerful space reassures parents and supports healthy child development—two essentials for building trust and standing out in your community.

You could have the best daycare in town, but without visibility, you won’t fill your spots. Effective small business marketing helps parents find you, trust you, and choose you.

• Build a trustworthy brand: Choose a name and logo that feel approachable and family-friendly. Ensure your branding is consistent across your website, social media, and printed materials.
• Go digital: Create a simple website with your services, pricing, and testimonials. Social media platforms like Facebook and Instagram are powerful for connecting with local parents.
• Invest in targeted advertising: Run local Facebook or Instagram ads promoting your daycare’s open spots.

👉🏻 Want more client-getting ideas beyond social media? Check out our guide with proven strategies for promoting your business locally.

Managing a daycare means juggling parent inquiries, tours, enrollment meetings, and daily updates—on top of caring for kids. Streamlining these tasks saves time and improves the parent experience.

Instead of endless back-and-forth emails, use an online scheduling tool like YouCanBookMe (YCBM). Parents can easily book tours, consultations, or enrollment meetings at their convenience. Automated confirmations and reminders reduce no-shows and help you stay organized.

Ready to save hours each week?

Create a free booking page with YouCanBookMe and make scheduling easy for parents—and stress-free for you.

Provide regular updates through newsletters or parent portals, and ensure quick response times for inquiries. Clear, consistent communication builds trust and long-term relationships.

Digital tools can help track enrollment, billing, and waitlists—so you can focus on childcare instead of paperwork.

Starting a daycare business takes more than passion—it requires planning, compliance, and a commitment to building trust with families. In this guide, you learned how to navigate licensing, create a welcoming space, and market your services effectively.

Now, it’s time to make running your daycare easier. Tools like YouCanBookMe simplify scheduling for parent tours, enrollment consultations, and progress meetings, while automating reminders and freeing up hours you can spend on what matters most—caring for children.

👉 Set up your free booking page now.

FAQ

How long does it take to open a daycare?

Timelines vary based on location, licensing requirements, and setup. On average, expect 3–6 months for planning, inspections, and approvals before opening.

Is opening a daycare business worth it?

Yes—if done right, opening a daycare can be both personally and financially rewarding. Demand for quality childcare is consistently high, making it a stable business opportunity. Beyond profitability, it offers the fulfillment of supporting families and contributing to child development. However, success requires careful planning, compliance with regulations, and strong business management. With a clear vision, proper licensing, and tools to streamline operations, many daycare owners find the investment well worth the effort.

What are common challenges daycare owners face in the first year?

The first year of running a daycare often comes with growing pains. Common challenges include navigating complex licensing requirements, balancing budgets while covering startup costs, and building enrollment quickly enough to sustain operations. Many owners also struggle with staffing—finding and retaining qualified caregivers can be difficult. Additionally, managing parent expectations and communication takes time and tact.