Key Takeaways
What are the two primary business models for a daycare?
You can either open a home-based daycare (6–12 children, lower startup costs) or a commercial childcare center (20–100+ children, higher cost and complexity).
How far in advance should I start the licensing process?
Start immediately. Licensing typically takes 3–6 months, so it must be the very first step in your timeline.
What staffing requirements must be met before opening a daycare?
All staff must be hired, fully trained, and background-checked before the first child is admitted to the center.
How does one avoid a chaotic opening week for daycare?
Set up your digital enrollment and registration systems well before your doors open to manage paperwork and payments smoothly from day one.
Most people who want to know how to start a daycare think the hardest part is getting licensed. It isn’t. The hardest part is doing everything in the right order — because if you sign a lease before you know your zoning is cleared, or hire staff before your license application is submitted, you’ll spend money you don’t have on a timeline you can’t control.
This guide walks the full startup sequence from model choice through first enrollment. No state-specific detours — the framework applies everywhere, with pointers to where your state’s rules will shape the specifics.
What Does It Really Take to Start a Daycare?
Starting a daycare means choosing your care model, getting licensed, securing a space, handling business setup, hiring staff, and enrolling your first families — in roughly that order. Most people underestimate how long licensing takes. In most states, the application-to-license timeline runs 3–6 months, and you can’t legally care for unrelated children for pay without it.
That sequencing matters more than any single step. The decisions you make in month one — home daycare versus center, which age groups you’ll serve, how many children — shape every cost, staffing, and licensing decision that follows.
What’s the Difference Between a Home Daycare and a Childcare Center?
Home daycares operate from a residential space — your home or a caregiver’s — and typically serve 6–12 children depending on your state and whether you hire an assistant. Childcare centers require a commercial facility and can serve anywhere from 20 to 100+ children, with full staff teams.
The model you choose determines three things immediately:
Startup costs: Home daycares can open for $10,000–$30,000 in most cases — mostly licensing fees, safety upgrades, supplies, and insurance. A childcare center typically requires $50,000–$150,000+ once you account for commercial lease, renovations to meet square footage and accessibility requirements, equipment, and staff onboarding before you earn your first dollar of tuition.
Licensing path: Both require state licensing, but centers face stricter facility inspections and director qualification requirements. Many states require a center director to hold an early childhood education credential or a Child Development Associate (CDA) certification.
Staffing: Home daycares are often operated by one or two caregivers. Centers must meet state-mandated staff-to-child ratios by room — 1:4 for infants, 1:6 for toddlers, and 1:10 for preschool-age children are common benchmarks, though your state may differ. That means hiring several staff members before you open.
There’s no universal right answer. If you’re testing the concept with limited capital, a home daycare is the lower-risk entry point. If you’re building a business with growth potential and multiple staff, a center is the right structure from the start.
How Do You Get Licensed to Run a Daycare?
Licensing is non-negotiable — and it starts earlier than most people plan for. Here’s the general sequence, which you’ll need to confirm with your state’s specific agency:
- Find your state licensing agency. Every state has a different agency overseeing childcare licensing — it may be the Department of Children and Families, Health and Human Services, or an early learning division. Child Care Aware of America maintains a directory of local Child Care Resource and Referral (CCR&R) agencies at childcareaware.org — that’s your best starting point for state-specific rules.
- Attend a licensing orientation. Most states require a mandatory orientation before you can even submit an application. These are often available online. They walk you through the application process, required training, and facility standards.
- Complete required training. Before approval, expect to complete pediatric CPR and first aid certification, a health and safety pre-licensing course (safe sleep practices, communicable disease management, child abuse recognition), and background checks with fingerprinting for all adults who will be in the space.
- Clear your facility. If you’re opening a center, this means zoning approval, a fire safety inspection, and a licensing inspection verifying square footage per child, bathroom ratios, outdoor space, and emergency exit requirements. For home daycares, expect a home inspection covering similar safety standards.
- Submit your application and wait. Processing times vary by state — plan for 3–6 months minimum. Do not sign a commercial lease you can’t exit until your license is approved or at minimum your application is submitted with a clear path forward.
Get your licensing timeline mapped out before you do anything else. Everything else — your lease, your staff hires, your marketing — runs downstream from it.
How Do You Handle the Business and Finance Side?
Once you know your model and have your licensing timeline, the business setup runs in parallel. You don’t need the license in hand to do most of this — but you do need to do it before you open.
Business structure: Most childcare operators form an LLC for liability protection. It separates your personal finances from the business and costs under $500 in most states to set up. Sole proprietorships are simpler but expose personal assets if something goes wrong.
EIN and bank account: Apply for an Employer Identification Number (EIN) through the IRS — it’s free and takes minutes online. Open a dedicated business checking account to keep finances clean from day one.
Insurance: You need general liability insurance specific to childcare. Many states require it as part of licensing. Get quotes early — premiums vary significantly based on the number of children you’re licensed for.
Startup budget: Write a child care business plan before approaching any lender. It forces clarity on your projected enrollment, tuition rates, and monthly costs — and it’s required if you’re applying for an SBA loan or any state-level childcare startup grant. The U.S. Small Business Administration (sba.gov) offers loan programs specifically available to childcare businesses.
Tuition rates: Research what comparable centers in your area charge per week or month, by age group. Your rates need to cover your costs at 75–80% occupancy — not 100%, because you won’t always be full.
How Do You Set Up Staffing Before You Open?
You cannot open with the right intention to hire staff “once things get going.” Your licensing requires specific ratios on day one, and those staff need background checks and certifications that take weeks.
Start here:
- Calculate your ratio requirements based on the age groups you plan to serve and your licensed capacity. If you’re licensed for 20 children across infant, toddler, and preschool rooms, you may need 5–7 staff before you enroll a single child.
- Post positions early — at least 8–10 weeks before your target open date. Childcare positions attract candidates, but background check processing and certification requirements mean the clock starts the moment you make an offer.
- Verify every credential. CPR/first aid cards, CDA certifications, and any state-required training must be current and on file before that person works with children.
- Document your coverage plan. What happens when someone calls out sick on opening week? Have at least one trained backup available or a relationship with a childcare staffing agency before you open.
How Do You Set Up Enrollment Before Opening?
Before you open, you need a way to collect registration forms, deposits, emergency contacts, and immunization records from every enrolled family. Without a system, your first week turns into a paper chase while you’re also trying to run a full room of children.
Build your enrollment process at least four weeks before your first day:
- Create your registration packet. At minimum: enrollment application, emergency contacts, authorized pickup persons, immunization records, medical information and allergy disclosures, tuition agreement and payment terms, photo/media release.
- Set up your waitlist. You’ll likely have more inquiries than openings, especially for infant spots. A clear waitlist process — with a written explanation of how and when you notify families — prevents hard conversations later.
- Choose how you’ll collect payments. Cash and checks are a management headache at scale. Digital payment processing tied to your enrollment records — through childcare registration software — keeps deposits, tuition, and payment plans organized without the manual tracking.
- Schedule your parent orientation. Before or on day one, meet with new families to walk through your daily schedule, sick policy, pickup procedures, and communication expectations. This meeting prevents 80% of the questions you’ll otherwise answer one by one over the first two weeks.
FAQ
How long does it take to start a daycare?
From decision to open doors, most people need 6–12 months. Licensing alone takes 3–6 months in most states. Factor in finding and preparing your space, completing required training, hiring staff, and building your first enrollment class.
How much does it cost to start a daycare?
Home daycares typically require $10,000–$30,000 to start. Childcare centers run $50,000–$150,000+ depending on location, facility condition, and how many children you’re licensed for. Ongoing monthly costs are separate — factor those into your business plan before you launch.
Can I start a daycare with no money?
You can significantly reduce startup costs by starting a home daycare rather than a center. Several states also offer childcare startup grants, and the SBA has loan programs for childcare businesses. But some upfront investment — licensing fees, safety upgrades, insurance, and supplies — is unavoidable.
Do I need a degree to start a daycare?
It depends on your state and your role. Home daycare providers typically need no formal degree, though training certifications are required. Center directors in many states must hold a CDA credential or an early childhood education degree. Check your state’s licensing requirements before assuming.
How many children can I have at a home daycare?
Most states allow 6–12 children in a home-based daycare depending on the caregiver’s qualifications and whether they hire an assistant. Some states cap it lower for infants specifically. Your state’s licensing agency will give you the exact numbers.
Conclusion
Knowing how to start a daycare comes down to sequence: model first, licensing early, business structure in parallel, staffing well before opening, and enrollment systems in place before your first family walks in. Skip steps or do them out of order and you pay for it in delays, cost overruns, or a chaotic first week.
Once you’re through the startup phase, the real work begins. The day-to-day of managing staff, billing, schedules, and parent communication is a different challenge — one covered in full in how to run a daycare business.
Get started, get licensed, and build the systems before you need them.
