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Your Complete Guide on How to Open and Run a Daycare

What You Need to Know Before Opening a Daycare

Daycare centers are springing back to life as parents and guardians resume their busy lifestyles. While the slowdown witnessed in 2020 characterized the better part of early 2021, daycare providers are now recording increased enrolment and attendance. Industry statistics project continued growth in the global child care market at an annual growth rate of 9%. From the current projections of $295.99 billion, the market is expected to hit a high of $415.96 billion by 2025.

These are pretty impressive figures if you are planning to open a daycare center. They indicate a ready market for your services, which should be expected. I mean, with most homes comprising dual-earner parents and single-parents, the demand for daycare services will always be there.

That said, the daycare industry is highly regulated. An aspect that ensures parents and guardians can enjoy peace of mind as they go about their daily routines, knowing their children are receiving excellent care in a safe environment.

In this article, we look at some of the basics you need to know before setting up to help you run a successful and compliant child care center. Whether you want to start the business in your home or on commercial premises, this information will guide you through the process. Let’s dive in.

What It Takes to Start a Daycare

Secure Licensing

To guarantee the safety of the children in your care, you must meet certain licensing requirements before setting up the center. The requirements vary across states, so you need to consult your state’s licensing agency for exact details.

But generally, you will require to fulfill conditions such as;

  • Physical space – The facility must have the minimum square footage for the children you plan to host
  • Health requirements – You and the team must pass annual medical examinations, immunizations, etc.
  • Location – You must fulfill zoning, accessibility, and security requirements
  • Education and training certifications – You must possess qualifications such as Child Development Associate (CDA), Child Care Professional (CCP), first aid certification, Early Childhood Degree, Cardiopulmonary Resuscitation (CPR), etc.
  • Safety requirements – You must adhere to cleanliness and safety standards in premises maintenance and food preparation
  • Staffing requirements – You should maintain the proper child/staff ratio (e.g., California child/staff ratio for nine months and three-year kids is 4:1 and 12:1, respectively.)

Once you visit the state licensing agency, they will provide you with a copy of the regulations, which you must fulfill. Afterward, you should arrange for the licensing specialists, plus the building, sanitation, and zoning codes inspectors, to visit your center for inspection. This is because you require the inspection reports when submitting the licensing application.

When applying for the license, you are required to pay a fee, which varies depending on the type of center and capacity. For instance, in California, the fee for a family daycare hosting between 1-8 children is $73 on initial application and $73 for annual renewal. If you’re starting a child daycare center with a capacity of 1-30 kids, the original application fee is $484, while the annual renewal is $242 (based on 2021 numbers).

You have probably heard about some licensing exemptions. Indeed, there are categories of daycare providers exempt from licensing, such as relatives caring for children for a few hours in a day. However, they still need to meet safety and health requirements if the children are under the federal child care financial assistance program.

In essence, licensing requirements will vary depending on the state and your situation. But the licensing agency can supply you with all the information you need to remain compliant. Once you have a chat with them, ensure you glean as much information as possible.

Write a Daycare Business Plan

Once you fulfill the licensing requirements, the next step is to write a business plan for your daycare. Having a solid business plan is essential in that it gives you a framework for running the business successfully.

Among other things, the business plan should detail the logistics, such as the number of children you will care for, the minimum and maximum ages you will take in, business hours, physical location, equipment needed, etc.

Other essential sections include;

  • Defining your value proposition (what makes your daycare stand out from the rest)
  • Providing a market analysis
  • Outlining your business model (pricing structure, gross margin levels, government subsidies, etc.),
  • Identifying your competitors
  • Detailing your team
  • Highlighting your marketing strategy
  • Providing a comprehensive financial plan

Evaluate Insurance Options

Acquiring insurance for your daycare is essential as it helps protect your business should something unfortunate happen. Essentially, you require a general liability policy, property liability cover, and a professional liability plan. If you offer transport to the kids, you may need to take auto insurance. Also, if you’re running a family daycare, check with your homeowners’ insurer for additional coverage details. However, ensure you consult your state licensing guidelines for direction.

Wondering how much you will pay for daycare insurance?

The cost will vary depending on the policies you sign up for, the provider(s) you choose, type of your daycare, number of children, location, etc. Generally, you should budget for an annual premium of between $400 and $1350 for family daycare and $1000 to $3500 for a commercial daycare center.

How to Set Up Your Daycare 

Having handled the legal and logistical requirements, now you need to roll your sleeves and bring your dream to life. Like any other business, running a daycare requires solid strategies, sheer determination, and an even deeper passion for what you do.

While your love for children can get you rolling at the early stages, without a streamlined management system, the business may eventually fail to run smoothly. Below are tips and best practices that you need to implement to keep your daycare thriving.

Create a Welcoming and Safe Space

Essentially, a daycare business runs on the virtue of the trust parents have in the care providers. If, for some reason, a parent has reservations about their child’s safety in your facility, trust me, they will certainly not bring the child there. Parents/guardians can only entrust their children under your care if they have confidence they will be well cared for and safe. By committing to providing a safe and comfortable environment for the kids, you can count on the reputation to guarantee your business continuity into the unforeseeable future.

Find Qualified Staff and Care Givers

If you are looking to add full-time, part-time staff or an assistant, it’s important to start early. Begin by writing down what type of help you need and experience you are looking for. From there, you’ll need to create a job description that includes the role, responsibilities, and the skills needed. Promote this job across multiple channels such as online job platforms (Indeed), local community boards, and social media. Make sure all applicants that you would like to move forward with meet the safety and regulation guidelines within your state.

Attract Families to Your New Daycare

Whether it be through monthly events (like open houses, play dates or seasonal celebration events), Facebook groups, local newspapers and bulletin boards, there are many ways you can promote your program. Think about where families naturally congregate and think about ways you can inform parents that your program is enrolling. Remember to always keep business cards with you in case an opportunity arises.

Running Your Daycare Effectively After Opening

Elevate Your Daily Childcare Services

Taking time to reflect each day and week will help you identify what is going well or what could be improved. Think about all facets of your program from welcoming students each day and activities, to meal times and parent communication. Use feedback from parents as a ways to identify ways to elevate your child care services. Also think about your strengths and what makes you unique – you can create a wonderful program based on what you do best!

Enhance Your Team’s Childcare Skills

The quality of your daycare’s services will be as good as the competence and attitude of your staff. Keeping a qualified, happy, and motivated team is essential to running a successful business. Ensure you prioritize your employees’ welfare by providing excellent working conditions, training and development opportunities, as well as fair compensation packages.

Maintain Safety and Cleanliness

Keeping your daycare center clean and safe at all times is one challenge you need to be well-prepared for. As the little ones play and explore around, they’re bound to create tons of mess. Hence, a regular cleaning and maintenance routine is essential to keep the premises clean and safe round the clock.

Manage Daycare Finances Wisely

There are various grants and incentives available for daycare providers. Don’t limit yourself when it comes to financing the venture. Research widely about available grants and incentives and take advantage of them. This way, you will have enough cash flow to offer superior services and acquire quality equipment, and gain an edge over the competition.

Keep Your Curriculum Current

Networking with peers, gathering feedback from parents, and annually reviewing and updating the curriculum are key practices. Regular documentation and assessment of your curriculum’s effectiveness helps to see the results and also make any necessary changes.

Invest in ongoing training for you and your staff. This can include early childhood education, reading new reports, first aid, and specialized courses in child psychology and development.

Prioritize Ongoing Parental Communication

At Wonderschool, we often hear from parents that the one thing they want to have is clear communication from their children’s caregivers. The method may change by parent, but it’s important to understand what parents are looking for. Make sure to take a quick moment with parents at pickup and drop-off time to connect on what the child needs for the day or how their day went. Connect with parents on how they would like to receive updates throughout the day. And don’t forget about sending any reminders of holidays/closures, updates to programs, materials/items children need for weather or field trips and more. Take time each week to evaluate how parental communication is doing and any changes that could be made.

How to Continue Growing Your Daycare Business

Streamline Daycare Operations with Digital Solutions

As part of your marketing strategy, ensure you build an active online presence to help existing and potential clients access information easily. This should include launching and optimizing a business website and creating social media profiles.

Inform your customers they can connect with you online and be prompt in answering their queries. Also, don’t forget to optimize your online presence for local search by sharing local content, creating a Google My Business profile, and polishing up your online listing on sites such as Yelp, Angie’s List, etc. Remember to encourage the clients to leave reviews online as this can help others find you.

Lastly, invest in daycare software to help streamline the administrative tasks. This can help boost your business efficiency and create a positive customer experience, which is good for your bottom line.

Keep Your Daycare Up to Standard

Ensure you have operating policies and procedures on paper. From staff contracts to facility operations manual and parent handbooks, avail clear guidelines outlining your operations. This allows you to relay your expectations to all stakeholders, thereby guaranteeing the smooth running of operations.

Build Relationships for Daycare Growth and Support

Building relationships can make sure people remember and fully recognize you as a community business. Take the time to reach out to your local chamber of commerce and/or business association and get to know what opportunities there are for you to be more present across the community and among their channels. You can ask if there is a way for you to be featured in a newsletter or communication to the community.

Beyond that, having partnerships with with local businesses, schools, and community centers can help establish more credibility for you. This helps in creating a network that can refer parents to your daycare and also provides opportunities for joint events or programs. Another example of a supportive partnership is finding a local bookstore that can provide books for your daycare, and in return, you can promote their store to the parents.

Start a Wonderschool

Ready to Open a Daycare Center of Your Own? Wonderschool Can Help.

If you treasure kids and are passionate about giving them a solid foundation for future success, starting a daycare is an excellent idea. By providing top-of-the-class services, you’ll always have parents/guardians seeking your services. Again, by adopting best practices and adhering to regulations, you can run a profitable venture while impacting as many future generations as your facility can support.

At Wonderschool, we partner with daycare providers like you to hold your hand and actualize your dream. We provide a platform whereby you can find helpful resources to run your daycare, network with other providers, and get discovered by parents/guardians seeking homey daycare centers for their children.

Interested in our help? Join us today!