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11 Min. Read

How to Start a Daycare: 12 Simple Steps

How to Start a Daycare: 12 Simple Steps

Opening a daycare centre may have long been a dream job where you could combine doing what you love and achieving financial freedom. Although starting a small business like this requires much effort, research, and know-how, the result can be gratifying.

To help you get there faster and start providing childcare services as soon as possible, we share the top 12 steps you should follow on how to start a daycare.

Table of Contents

12 Steps That Help You in Opening a Daycare Business

Key Takeaways

Frequently Asked Questions

Get A Headstart On Your Accounting

12 Steps That Help You in Opening a Daycare Business

Below are steps you can follow to give your daycare business a head start.

Learn About Daycare Permit and Licensing Requirements

Starting a business where the clients are infants or small children has specific legal requirements and childcare licensing standards. Each province has different laws, so it’s best to check for childcare regulations in your particular area to legally operate.

Your licence will dictate the number of children you’ll be able to accommodate at once, as well as the school age children range to enter daycare.

Plus, it’s also necessary to meet safety and health regulations in the centre before opening a licensed childcare program. For example, you must get a food handling certificate if the kids will also have meals or drinks.

Here are some considerations for opening a childcare business in different provinces in the country:

  • Alberta – childcare licence is needed for childcare services that will have more than 7 children at a time.
  • British Columbia – licence required for having more than 2 children (non-blood-related, meaning not your own children).
  • Manitoba – licence approval is needed, as well as extra health and safety requirements for infants.
  • New Brunswick – see the Early Learning and Childcare Services department website for more information.
  • Newfoundland and Labrador – the Child Care Act requires the owner to apply in writing to a Manager to get a licence.
  • Northwest Territories – study the Department of Education, Culture and Employment site for details on how to apply.
  • Nova Scotia – licence needed for daycare facilities that take care of more than six children.
  • Nunavut – for at-home daycare centres, submit the Application for a Child Care Facility License.
  • Ontario – get a licence from the Ministry of Education if you plan on taking care of more than five children (13 or fewer).
  • Prince Edward Island – get a licence from the PEI Early Learning and Child Care Board.
  • Quebec – requirements are different depending on the type of the facility.
  • Saskatchewan – submit the Licensed Family Child Care Home Application for at-home daycare business.
  • Yukon – get a one-year licence for family daycare from the Yukon Government.

Consider Taking Early Childhood Education Classes

Many owners of daycare services and  centres have a degree in early childhood development and education. If you want to start a business and get your  licence, taking education classes can help.

An early childhood education degree is not just about passing exams and getting a diploma. It’s about standing out from other  providers and gaining experience from field professionals. It’s also about becoming a better daycare centre owner.

Finally, a degree gives you peace of mind knowing you can make decisions that will benefit your  business. It also helps attract families and makes obtaining a  licence a much easier task.

Create a Daycare Business Plan

Creating a business plan is a must-do for any new business, and daycare centres are no exception. However, drafting such a business structure plan takes quite a lot of work, especially if you have big expectations for your daycare facility.

The first step in drafting a plan is to outline everything you wish to include. This can cover the following:

  • Outline
  • Company summary
  • Market analysis and research
  • Assessment of the business need
  • Marketing plan
  • Sales plan
  • Financial plan and projections
  • Plan B

You can always expand this list as your business grows. But given the many aspects of a business plan, where exactly should you start?

Well, exploring your market before diving deeper into plan realisations is recommended. If not, you could launch your daycare centre, only to find out there are zero people in your area who are interested in that service.

So, it would be best if you do market research and analysis and ensure you’re about to create a business that actually has an audience. Otherwise, opening a daycare would make little sense.

Budget plans are the second most important aspect of planning. Here are some aspects you want to include:

  • Startup costs, daycare equipment, educational tools, and other items to ensure adequate care
  • Business insurance (general liability insurance, property insurance, molestation insurance, etc.)
  • Daycare licensing requirements costs
  • Workers compensation
  • Recreational programs

Create Financial Goals

Anyone planning to start a small business needs to consider their financial goals. Once you set your financial goals, you can stay focused on achieving them and ensuring your business is on track.

In addition to a business plan, a budget plan can help you achieve success in a trackable and transparent way.

You can get help from friends who work in finances or use free templates online to create a budget.

Here are some of the questions you should ask yourself in the process when opening a daycare:

  • Will you be hiring any employees?
  • How many children can you host?
  • Will your home need room expansion?
  • Will you purchase extra toys, bedding, safety equipment, and other items
  • Will you be renting a space in a building? What is your business location?

Pro Tip: Include the fees for inspection, licensing process, and zoning in the budget plan. It’s also good to have a 20-30% buffer zone for some extra purchases like fire extinguishers for safety regulations.

Research Possible Tax Credits

Some in-home daycare business expenses are eligible for tax deductions for space you use for business purposes. Daycare centres also write off their daycare expenses. This includes housing payments, vehicles, utility bills, and childcare supplies.

Seek Out Grants and Funding

It’s never too early to look for grants and additional funding opportunities. You’ll be faced with plenty of startup costs, and the best way to compensate is to explore the available government grants.

Some grants also cover child development education so that you can stand out from other  providers.

Available community grants include:

  • Canada Post Community Foundation
  • Open Door Group
  • Child Care Operating Fund (CCOF)
  • Child Care Free Education Initiative (CCFRI)
  • Child Care Maintenance Fund
  • ECE Wage Enhancement (WE)

Draft Up a Contract

Creating a contract is a must when starting a childcare business. You can draft up an agreement that will outline your services. The contract also includes what you won’t provide to the client.

Some considerations to take into account when creating a contract include the following:

  • The time when parents should pick up their kids
  • The consequences when children or parents are late
  • Services provided
  • Parent responsibilities
  • Policy for sick children
  • The number of days off you’ll take and whether they’re paid or not
  • Late payment policy

There are plenty of online resources for crafting contracts so you can have an easier time with this essential yet not-so-fun activity.

Establish Policies and Procedures

The policies and procedures are important parts of any daycare centre contract. Opening a daycare requires you to be legally protected, so your policies must be clearly stated.

The policies also contain logistical information about how your daycare centre runs. You can include information about:

  • Drop-off times
  • Field trips
  • Curriculum
  • Illness
  • Vacation
  • Inclement weather

In short, you can include everything the clients need to know before you welcome their kids into your daycare facility.

Market Your Daycare

Marketing is an essential part of the equation if you want to grow your business. Maybe you’re used to taking care of other people’s children. However, this type of marketing will only be enough if you want to have at most five children in your business.

You can create a page on social media (Instagram, Facebook) and spread the word about the new daycare centre opening up. Conduct research on what you should do to make your online presence successful. Here’s a short marketing overview:

  • Create a website
  • Upload welcoming pictures and introduce your day centre
  • Advertise in local family magazines
  • Post flyers in local libraries, coffee shops, community centres, or grocery stores

Promote Your Daycare on Social Media

Social media is your best friend when starting a new business and for other local businesses. You have endless possibilities in how you want to target your potential clients (or their parents). You can market in parent groups on Facebook, pay for targeted ads, share the word at online parenting events, and more.

Some social media networks you can use for your benefit include:

  • Facebook
  • Instagram
  • LinkedIn
  • Twitter

You can also use social media to post updates about your daycare facility. As a  centre owner, you can post educational content about , share tips on educating children, and more.

Provide Top-Quality Care

The only way to attract clients to your business is to provide top-quality care. If you create an environment in which children enjoy spending time and can’t wait to attend, it’s the biggest compliment your business can get. And it also works miracles in terms of getting new clients.

Word of mouth spreads fast about high-quality, authentic, and professional businesses. And your daycare centre needs to be just that.

You can ask your current clients to leave positive reviews on Facebook, Yelp, or Google to boost your daycare centre’s reputation.

Also, don’t think that your work on improving your daycare centre ends when you open its doors. Quite the opposite – the more experience you get, the more you can adjust your daycare to meet children’s and parents’ expectations.

Family feedback is essential when it comes to fine-tuning your business. Also, feel free to invest in additional education and hire staff to enhance the daycare centre.

Manage Your Business Finances

Managing business finances as a sole business owner can be overwhelming. Many small businesses fail due to the lack of a functional money management system. With so many expenses and tax obligations, it’s hard to keep track of everything by yourself. But when you’re on top of the business finances, you have control over the most critical aspect that keeps your business on its feet. You’re also finally free to achieve your financial freedom.

Keeping on top of your business finances is where smart software like FreshBooks comes into play. FreshBooks accounting software allows you to automate your business expenses. As a result, you have more time to focus on growing your business.

Using FreshBooks is so easy that you can give it a go even if you have no experience working with accounting software. You can easily set reminders for late payments to your clients, create a system to accept credit card payments, and much more.

The platform offers plenty of step-by-step process tutorials so you don’t feel overwhelmed. You can follow the simple steps provided here to start recording your expenses with FreshBooks.

Set Your Books Up For Success

Key Takeaways

Opening your own daycare can seem intimidating at first, especially if you’ve never run your own business before. Even though there’s no ideal blueprint for success, you can follow the steps in this article to get a headstart. Thanks to online templates, FreshBooks software, and social media, opening a daycare has never been easier.

FAQs About Daycare Business

Is running a daycare profitable?

Statistics say that the daycare business profit averages around 15%. It’s higher than most industries in the modern, fast-paced day and age.

What are the responsibilities of a daycare owner?

As a daycare owner, you’re responsible for the daily operations of the facility. You ensure a safe and educational environment for the kids, create a curriculum, and manage and hire staff. You also need to ensure everyone follows safety regulations and communicates with parents.

How much does it cost to start a daycare business?

A licensed childcare program costs $10,000 to $50,000 to build from scratch. The difference in cost is due to many factors. For example, whether you use your home to run your own daycare business or lease a facility can impact starting costs.