To start a daycare, you must research local licensing requirements, create a business plan, secure funding (typically $30,000–$150,000 for center-based programs), find a compliant location, prepare the facility with necessary safety equipment, hire qualified staff, and market your services to families.
Learning how to start a daycare takes passion for early childhood education, compliance with local licensing requirements, and strong business skills. This guide outlines the essential steps to successfully open your own childcare program in 2026.
The state of child care in 2026
The childcare industry remains vital but is navigating a volatile period. Understanding the current economic landscape is crucial before you open a daycare center.
- Ongoing recovery: The sector is still stabilizing after significant closures in previous years.
- Rising costs: Providers face escalating expenses for rent, insurance, and wages, requiring careful financial planning.
- High demand: With childcare costs rising and workforce participation increasing, the demand for quality, affordable care remains high, creating opportunities for well-managed programs.
- Employment outlook: The need for preschool teachers and directors remains steady, with thousands of annual openings projected through 2033.
Benefits of opening a childcare program
Launching a childcare program offers financial independence and the opportunity to make a difference.
- Personal childcare solutions: If you have young children, owning a program solves your own childcare needs.
- Financial autonomy: Owning a business allows you to control your income and make strategic decisions for growth.
- Tax advantages: Business owners can often write off expenses like utilities, supplies, and portions of housing costs (for in-home programs).
- Community impact: You play a direct role in shaping the cognitive and social-emotional development of young children.
Childcare Licensing and Compliance Checklist
Download this free checklist to simplify the childcare licensing process.
Understanding startup costs
Before diving into the steps of launching your program, it is essential to get clarity on the financial responsibility ahead. Startup expenses vary widely based on your business model.
Typical cost ranges
- Home-based daycare: Startup costs typically range from $5,000 to $50,000, reflecting the lower overhead for using your own residence and reducing renovation and facility expenses.
- Small to medium center-based program: Budget between $30,000 and $150,000, depending on facility size, required renovations, and local regulations.
- Larger commercial centers: Startups for centers serving 50+ children may require $250,000 or more due to extensive space modifications, equipment, and licensing requirements.
Cost breakdown
| Cost category | Estimated range |
|---|---|
| Facility and renovation | Home-based: minimal; Commercial: $75K–$300K |
| Licensing and regulatory fees | $500 to $5,000 depending on state and capacity |
| Staff salaries and training | $20,000 to $35,000+ per employee (varies by region) |
|
Furniture and supplies |
$15,000–$50,000 |
| Insurance | $1,500 to $5,000 annually |
| Marketing and launch promotions | $1,000–$7,000 |
| Working capital | $30,000 to $100,000 (3-6 months reserve) |
Notes on variability
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Location matters: Urban areas generally come with higher rent and renovation costs; conversely, rural locations may cost less upfront but could limit tuition potential and scale.
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Program choice impacts budget: Home-based operations involve fewer regulatory hurdles and facility costs, though they may limit enrollment capacity.
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Staffing ratios: Required caregiver-to-child ratios (e.g., 1:4 for infants) substantially affect salary outlays—especially critical for infant programs.
Checklist: How to start a daycare in 9 steps
Opening a daycare requires careful preparation. Follow these steps to keep your business compliant and help your program run smoothly.
1. Learn about licensing requirements
What licenses do I need to open a daycare?
You typically need a license from your state’s Department of Health and Human Services (DHHS) or Department of Children and Family Services (DCFS). Requirements often include specific staff-to-child ratios, safety inspections, and director certifications (such as a CDA credential).
- Check with Child Care Aware of America for state-specific maps.
- Contact your local Child Care Resource & Referral Agency (CCR&R).
- Review education requirements for directors and staff.
2. Write a business plan
A solid business plan guides your startup process. Key elements include:
- Mission statement: Define your educational philosophy.
- Budget: Outline startup costs and projected revenue.
- Operations: Plan for staffing, hours, and curriculum.
- Funding: Determine if you will use personal savings, small business loans, or daycare grants.
3. Find a location
Choosing the right location for your daycare center is a critical step in ensuring accessibility, safety, and convenience for families while meeting licensing requirements and community needs.
- Zoning laws: Ensure the area is zoned for commercial childcare.
- Safety: Avoid high-traffic areas or proximity to hazards.
- Accessibility: Choose a spot convenient for commuting families.
- Capacity: Ensure the square footage meets state requirements per child.
4. Get insurance
Protect your business, staff, and the children in your care. Essential insurance policies include:
- General Liability: Covers injuries on the property.
- Professional Liability: Covers errors in supervision or care.
- Workers’ Compensation: Mandatory in most states if you hire staff.
- Commercial Property: Protects your building and equipment.
5. Prepare your facility
Creating a safe, engaging, and well-equipped environment is crucial to ensuring the success of your childcare facility.
- Safety: First aid kits, smoke detectors, outlet covers, and secure furniture.
- Furniture: Cribs, nap mats, child-sized tables, and storage units.
- Play materials: Age-appropriate toys, puzzles, and books.
- Technology: Systems for check-in, security, and billing.
6. Develop policies and procedures
Create a parent handbook and staff manual covering:
- Health and safety: Sick policies, medication administration, and emergency drills.
- Operations: Hours, pickup/drop-off procedures, and closures.
- Enrollment: Forms, tuition rates, and payment schedules.
- Curriculum: Educational goals and daily schedules.
7. Hire qualified staff
Hiring qualified staff is essential for creating a supportive and high-quality childcare environment. Skilled and dedicated team members play a critical role in fostering early childhood development and ensuring smooth daily operations.
- Verify ratios: Adhere to strict state-mandated adult-to-child ratios.
- Background checks: Conduct rigorous criminal and fingerprint checks.
- Qualifications: Ensure staff meet educational requirements (CDA, CPR/First Aid).
The Childcare Director's Complete Toolkit for Hiring Great Staff
Use this toolkit to interview qualified candidates and hire the best educators for your childcare program.
8. Invest in childcare software
Streamline your administrative tasks so you can focus on the children. Tools like brightwheel allow you to:
- Automate billing and payments.
- Manage enrollment and daily attendance.
- Communicate with families via a centralized app.
- Track learning progress and curriculum.
Getting your childcare license is just the beginning. Launching your program takes planning, tools, and reliable support. That’s why brightwheel offers a dedicated New Program Experience designed to guide you every step of the way. With our all-in-one platform, you can simplify enrollment, set up billing plans, and stay on track for a smooth, successful opening.
I would say that if you are a new program that you should definitely jump on brightwheel and just experience it. It’s tools that help make your life easier as the owner and director. There’s no reason not to, with the cost and the effectiveness, it’s 100% a yes for me.” Crystal D., Owner & Director at Lil’ Ranch Hands Family Childcare Home in Minco, OK
As I build my new program, the billing features are a game changer. I can easily invoice parents, and everything is automatically tracked—especially helpful come tax season.” Emily K., Owner of Emily Finzen Childcare in Lake Benton, MN
Experience Curriculum allows you to lean into creativity while following the curriculum. It’s all right there, it’s all prepared for you, and then you can lean into it.” Leinani G., Owner of Creative Minds Learning Academy in Bothell, WA
Brightwheel helps us in every way possible. From their onboarding and support team to the features that keep us organized, on track with planning, and communicating smoothly as a team to parents and each other. I couldn't imagine a better management system for our program." Harida H., Administrator at Play Pals Daycare in Maumee, OH
9. Market your program
Marketing your childcare program effectively is key to attracting families and building trust in your community. By showcasing your program's unique qualities and emphasizing the value you provide, you can stand out in a competitive market.
- Online presence: Build a website and list your program on directories like Winnie.
- Community: Partner with local schools and businesses.
- Social media: Share photos of your facility (respecting privacy) and educational philosophy on your social media pages.
- Open house: Host open house events for interested families to tour the space.
Frequently asked questions
Can I open a daycare in my home?
Yes, most states allow you to operate a family childcare home. You will still likely need a state license, liability insurance, and a home inspection to ensure the space is safe for children.
Is owning a daycare profitable in 2026?
Yes, daycare centers can be profitable, though margins vary by location. Profitability depends on managing occupancy rates (enrollment), controlling labor costs, and maintaining efficient collection of tuition fees.
How long does it take to open a daycare?
The timeline typically ranges from 6 to 12 months. This accounts for finding a location, renovations, the licensing application process (which can take several months), and hiring staff.
What is the most expensive part of starting a daycare?
For commercial centers, the facility (rent/mortgage and renovations) is usually the highest startup cost. For ongoing operations, staff salaries and benefits are the largest expense, often accounting for 60–80% of the budget.
Learn more about daycare licensing regulations in your state
Want guidance on how to start a daycare in your state? Consult your state's childcare licensing department or check out our state-specific guides below for more information:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington, D.C.
- West Virginia
- Wisconsin
- Wyoming
Take the first step to opening a daycare today
Starting a childcare business is both a rewarding and challenging journey. From navigating licensing requirements and managing startup costs to hiring staff and building trust with families, every step requires thoughtful planning.
By following these steps, you’ll have a clearer understanding of how to start a daycare that not only meets state regulations but also creates a safe, nurturing environment for children. With the right preparation and dedication, your daycare can grow into a thriving business that makes a lasting impact on your community.
