Operating a Day Care Business

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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

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