How to Start and Run a Day Care Business

Introduction

Approximately one-half of the children in the United States today are cared for by someone other than an immediate family member during some portion of each day. In two-thirds of two-parent homes, both parents work, providing a large and ever growing consumer base for the day-care industry. In addition, 12 million children, more than 20% of the children in the United States, live with single parents who need child care in order to work.

For-profit businesses are only one of the several different types of day care that now exist with each type used by different groups within the day-care market. Many of the small child day-care businesses are home-based, or operated out of a privately owned home. By contrast, center-based operations tend to be larger in size and include franchise, on-site company-sponsored, cooperative and individually owned centers. Approximately 15% of employed mothers use center-based day care for their preschool children as their primary source of child care. An additional 13% of working mothers use center-based care as their secondary source and use a baby-sitter or family member as their first choice. Surveys show that more affluent, better educated families rely more on paid care and center-based care than lower income families, who rely primarily on relatives.

The market demand for child care has also led to the development of chains of day-care facilities. Some of the chain leaders of day-care operations are Kinder-Care, founded in 1969, with more than 850 locations in 40 states and Canada; LaPetite Academy, started in 1970, with 358 centers in 20 states; ARA Services, which bought National Child Care in 1980, with 142 schools in 11 states; and Gerber Products with 57 Gerber Children's Centers in six states. A number of the chains offer franchise opportunities.

Programs vary in scope of services provided. The business can be full-day care, drop-in care, extended care (for parents who may be out-of-town for a period of time), after-school care, or night-time care. A special type of daycare service is one for seniors, rather than children.

Starting a daycare operation in your home can cost from as little as $500 to as much as $5,000, depending upon how much equipment you need to buy and remodelling you need to do to meet licensing laws. Full-scale daycare centers operating from an independent business location can cost as much as $100,000 to start.

Some of the items you may want to budget for are:

Licensing Fees	Advertising
First Aid/CPR Certification	Liability Insurance
High Chairs	Booster Seats
Nap Mats (these could also be charged to each family as part of an initial registration fee)	Playpens/Portable Cribs
Bedding	Safety Devices
First Aid Kit	Computer
Software	Books
Toys	Educational Materials
Arts & Crafts Supplies	Disposable Gloves
Disposable Changing Pads	Antibacterial Cleaners
Food	Child-sized Tables and Chairs
Sanitary Storage for Used Diapers	Step Stools for Sink and Toilet
Outdoor Play Space (sand, hard surface for wheeled toys, swings, climber, garden)	Make-believe Props, Clothes and Costumes for Dressing Up and Pretending
Record Player, Tape Recorder and Radio	Canister for Colors, Pencils and Other Miscellaneous Art Materials

Professional Resources

Business Use of Your Home (Including Use by Daycare Providers)
The rules from the IRS about tax deductions for using your home for your business.

Child Care Aware
A non-profit initiative committed to helping parents find the best information on locating quality child care and child care resources in their community. They do this by raising visibility for local child care resource and referral agencies nationwide, and by connecting parents with the local agencies best equipped to serve their needs.

Child Care Glossary
Service providers and specialists in the field of child care use terms that are not often used by the "average person." Here is a glossary of terms frequently used by child care advocates and providers.

Child Care Information Exchange
Resources for providers and parents about child care issues.

Child Care Parent Provider Information Network
A cyber center for family home child care advocates.

Child-Care Service Business Startup Guide
Written by the experts at Entrepreneur.com.

Family Daycare Provider Meal and Snack Log
An example from the IRS of how to keep track of meals and snacks so you can deduct their cost on your taxes.

National Association of Child Care Professionals
National association committed to strengthening the skill level of leaders in the field of early child care and education.

National Child Care Information Center
The National Child Care Information Center (NCCIC), a project of the Child Care Bureau, Administration for Children and Families (ACF), U.S. Department of Health and Human Services, is a national resource that links information and people to complement, enhance, and promote the child care delivery system, working to ensure that all children and families have access to high-quality comprehensive services.

National Association for the Education of Young Children
The National Association for the Education of Young Children (NAEYC) is the nation's largest and most influential organization of early childhood educators and others dedicated to improving the quality of programs for children from birth through third grade.

The National Association for Family Child Care
The focus of NAFCC is to provide technical assistance to family child care associations. This assistance is provided through developing leadership and professionalism, addressing issues of diversity, and by promoting quality and professionalism through NAFCC's Family Child Care Accreditation.

National Child Care Association
National association serving the private, licensed childhood care and education community. NCCA provides access to money-saving opportunities, great networking, and professional development opportunities.

National Child Care Information Center
A national resource that links information and people to complement, enhance, and promote the child care delivery system, working to ensure that all children and families have access to high-quality comprehensive services.

National Resource Center for Health and Safety in Child Care (NRC)
Promote health and safety in out-of-home child care settings throughout the nation by disseminating information about standards and regulations nationwide.

The Nation's Network of Child Care Resource and Referral
The national network of more than 850 child care resource and referral centers (CCR&Rs) located in every state and most communities across the US. CCR&R centers help families, child care providers, and communities find, provide, and plan for affordable, quality child care.

Sample Day Care Business Plan
Software program that provides a business plan for a day care center that you can edit to fit your particular circumstances.

Operating a Day Care Business