How Much Does It Cost to Start a Daycare Center?

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Owning a daycare center is a smart, beautiful, and profitable business venture, especially if you are a lover of children, and all the itty-bitty cuddles and hugs they delightfully share with people that care for them. Also, it is perfect for you if you have a maternal and nurturing personality. Being an owner of a daycare center is an opportunity for both monetary and emotional rewards. Recently, daycare centers have been in high demand due to the global higher percentage of working-class mothers and increase in two-family household incomes. This industry has been growing at a rate of 3.5% each year. In the United States, it is a $48 billion dollar industry which employs about two million people yearly.

The average cost of starting a daycare center, according to (a small business website), ranges from 10,000 dollars to $50,000 dollars. This cost varies with the type of daycare center you intend to run. You can either run a home daycare or lease a facility for your daycare center. Starting up a home-based daycare center requires lesser startup costs and risks when compared to  the cost and risks involved in starting up a facility-based daycare center. This video contains detailed information on the cost required to start a daycare center which will help you to be ready to start a successful daycare center. This is because owning a daycare center requires you to be truly prepared and know what cost to expect.

To Setup a Daycare Center, You Should Do The Following

  • Find out specific daycare licensing requirements in your country or state. 
  • Create a business plan for your daycare business.
  • Look for a suitable location for your daycare center.
  • Ensure your daycare business center.
  • Equip and furnish your daycare facility.
  • Develop rules and guidelines for your daycare center.
  • Employ staff/aides for your daycare center.
  • Research and invest in software created to aid child-care.

What are the Important Costs Required to Startup a Daycare Center?

In setting up a daycare center, there are some required fixed costs and they include: business registration, insurance, legal fees, rent (if you are leasing a property), furnishing, and equipment, etc. There are also variable costs such as utilities, stationeries, transportation, medicine kits, food, and kitchen, art & cleaning supplies. The major startup and running cost of a daycare center is  salaries and wages. Typically, the start-up cost required varies from location to location. The number of children you intend to care for will also determine your start-up cost requirement.

Although the major determinant of your start-up cost requirements is the type of daycare center you want to run, the facilities you want to include in your daycare center also influences your cost. Also, the rules and regulations guiding the number of staff or aides per child in your area, will also greatly influence your estimated running costs.

Some other factors that determine the start-up cost required for your daycare business includes: the required licenses and permits, additional intended services to offer, insurance costs, the source of your supplies and ongoing expenses, the cost for branding, promotion and marketing of the daycare center, the need to and the cost of hiring and paying a business consultant and attorney, the cost for furnishing and equipping the daycare center, the need to and cost of recruiting and training staff , and the cost for the purchase and customizing of uniforms for your employees.

Here is a detailed list of the expenses and costs you will incur when starting up a daycare center: 

  1. Business registration: $750
  2. Business licenses, legal considerations, and fees: $2,000
  3. Insurance Payments: $10,000
  4. Furnishings:  $2,500
  5. Stationeries: $100
  6. Equipment: $3,000
  7. Mats and Pillows: $150
  8. Medicine Kits: $100
  9. Part-time staffs/aids: $10,000
  10. Kitchen, art & cleaning Supplies: $500
  11. Water and Trash: $1,800
  12. Phone and Electric: $4,000
  13. Food and beverages: $4,800
  14. Building and hosting a website: $600
  15. Advertising and marketing:  about $4,000
  16. Miscellaneous: $1,000

What Do I Require to Start a Home-Based Daycare Center?

A home-based daycare center has lots of requirements to meet, but they are not as tedious or extensive as a facility or community-based daycare center. The advantage of a home-based daycare center is it`s low startup cost requirement and the ability to control the number of hours you run your daycare center. Each state has different licensing requirements for starting a home-based daycare center. Therefore, it is important for you to know your state`s requirement before starting up your own daycare center, to be sure your zoning allows for a home-based daycare. Before you will be licensed, your home will be inspected, and fire safety check and background check will be carried out. You should also look out for resources available in your locality or state. Knowing all this beforehand will help you focus most of your energy on what is important, which is the children.

What Do I Require to Start a Facility/Community-Based Daycare Center?

The cost of starting up a facility/community-based daycare center largely depends on your choice location and the type of facility you want to build or lease. The cost of building from scratch is much higher than leasing. To lease, ensure you get an estimate of work required and expected costs before signing a lease. Typically, the renovation cost estimate of a daycare center for 76 children in a building is $95,000. This depends on the location and state of the building.

Conclusion on Starting a Daycare

Starting up a daycare center is quite affordable if you want to run a home-based daycare center, and it is very lucrative. Running a daycare requires patience, dedication and time and you should  remember that it is the parents you want to please, even though it is the children you are taking care of. Therefore, your daycare center should have standard facilities that appeal to your prospective parents or guardians taste. If you need any additional help planning the opening and funding of your daycare center, please contact our business planning and funding experts at

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