Daycare teacher draws with children
If caring for youngsters interests you, running a daycare center can be a fulfilling and in-demand business idea. — Getty Images/Thinkstock Images

If you’re looking to start a business where there’s always a demand, starting a daycare center is a great option. More than 23% of children under the age of five attend child care. If you want to learn how to start a daycare, here are seven steps to get started.

Find out the licensing requirements

Start by finding out your state’s licensing requirements for child care providers. Some states have additional requirements like health regulations, safety codes and zoning laws.

Following these procedures will help you avoid any fines and will help you keep the children in your care safe. You should contact the Department of Children and Family Services (DCFS) in your state to learn about any existing licensing requirements.

[Read more: Starting a Business? A Guide to Business Licenses and Permits]

Choose a location

Next, you’ll have to decide on the location for your daycare center. Many providers choose to operate a daycare out of their home, but you can also choose to rent or buy a place.

The advantage of running a daycare center out of your home is that your overhead costs will be much lower; however, you’ll need to make sure you follow all safety protocols.

If you choose to buy or rent a location, it’s a good idea to look for an area that doesn’t need many repairs. And look for a location that will be convenient for parents to drop their children off.

Work out the business logistics

Now you need to work out the logistics of your daycare. The first place to start is by determining how many children you can care for at one time.

Most states have strict rules regarding the number of children you can have in a daycare. If you plan to hire staff members to help you run the center, you may be able to take on more children at once.

You also need to determine the minimum and maximum ages of kids you’ll be caring for. And you need to outline your hours of operation. For instance, do you plan to offer full-time child care, or will you provide an after-school program for parents?

As a daycare provider, you have a big responsibility to keep the children in your care safe. The best way to do that is by putting safety parameters in place from the beginning.

Apply for insurance

As a daycare provider, you’re taking on a certain amount of liability in caring for children. So before you can get your center up and running, you’ll need to apply for insurance.

According to the SBA, you’ll need to take out liability insurance and accident insurance. Liability insurance will cover any accidents that occur in your child care center, damage to your property and legal costs if you’re taken to court.

Accident insurance could be good supplemental insurance to purchase. If a staff member or child is injured, accident insurance should help cover the costs. Before buying any insurance, you should seek out the advice of a licensed insurance agent.

Check out the competition

Competitor research is a vital component of any successful business. Researching your competition will help you identify gaps in the market and help you narrow your services and marketing strategy.

Make a list of all of your direct and indirect competitors and the types of services they offer. Take note of their strengths and weaknesses, and how you plan to set your daycare center apart. This information will be crucial if you ever plan to seek out small business financing.

[Read more: How to Conduct a Successful Competitive Analysis]

Put safety parameters in place

As a daycare provider, you have a big responsibility to keep the children in your care safe. The best way to do that is by putting safety parameters in place from the beginning. Ensure children have a safe, clean area to play in that is free of breakables and hazardous materials.

Have age-appropriate toys available for children to play with and an outdoor space where they can run and play while still in view. If you purchase equipment like cribs, booster seats or high chairs, make sure they meet current safety standards.

Set up your policies and procedures

Finally, you need to set up your policies and procedures. For instance, you’ll need to address how your daycare addresses things like illnesses, holidays and meals.

Having established policies and procedures will protect the children you’re caring for and limit your potential liability. The SBA recommends coming up with a contract for parents to sign, so everyone is on the same page.

[Read more: Step-by-Step Guide to Starting a New Business]

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published April 28, 2021