Operating your own daycare center is both challenging and rewarding. An organized approach can help you start your business off on the right foot. Here we present a handy checklist for opening your own daycare center.
Before you can begin, you need to learn. Even if you have been working in daycare for a number of years, it can be helpful to visit other daycare centers and network with childcare facility operators to get a sense of the challenges they face and how they have organized their businesses. Working for a business is much different than operating one yourself.
Establish Your Business Entity
Register your business as a legal entity with the secretary of state of your state. Each state has different requirements and regulations; check your state’s website for more information. Prepare to be an employer as well. You will be responsible for tax withholdings and other requirements.
- Establish and receive your articles of organization or incorporation.
- Obtain a federal tax identification number from the IRS.
- Register for a state tax identification number.
Once you have your business entity and tax identification numbers you are ready to open a daycare center.
Review Licensing, Certification, and Training Requirements
Daycare licensing is governed by the state. Each state has a different set of regulations including teacher certification and training requirements. Contact your state department of human resources or child and family services to learn about your state.
Also, you can check the local childcare licensing agency’s website to help you gather necessary documentation and information to apply for your license. Examples of requirements include CPR training and certification, and teaching certificates for all teachers.
Now is the time to shop for business insurance including worker’s compensation, liability, and property insurance. Your state licensing agency may have specific requirements.
Create a Business Plan
Now that you have established your business and obtained all your tax and licensing documents, it’s time to create a business plan.
- Executive summary – a summary of all the important information about your business.
- Business description – include a mission statement and history of business formation.
- Market analysis – determine your target market and analyze your competition.
- Organization and management – highlight your experience and qualifications as well as those of any business partners.
- Sales and marketing strategies – how your business will make a profit and the type of promotional efforts you have planned.
- Funding requirements – especially important if you plan to apply for a small business loan. Use a range of numbers and include your expected profit margin.
- Financial projections – base them on information about your expected revenue growth and market trends.
A business plan is your roadmap to guide you through the process of starting your business.
Find and Prepare Location for Facility
Whether you will run your daycare center out of your home or a separate location, you should check for requirements set by the licensing agency. You may be limited to a specific number of children depending on the location of your daycare.
Unless you are purchasing an existing childcare facility, check local zoning ordinances and install any playground equipment, classroom equipment and supplies, and safety accessories.
If you are planning to open a daycare center in the near future, then you should take into account that COVID-19 is making its own adjustments. You may need to contact a dedicated development team to develop an interactive online platform.
Develop Policies, Procedures, and Contracts
State licensing requires that you develop and publish specific policies and procedures. Your experience and research may inform your need for others. Formal policies and procedures provide legal protection for you and your business.
While contract templates are available online, consult a business attorney to customize your employment and enrollment contracts to avoid any misunderstandings and clarify how your policies are administered.
Determine Staffing and Activities
If you expect to hire teachers and other staff, look to your business plan and licensing requirements to determine the required child to staff ratio for your type of facility. Use a childcare management software application to track employee hours and administer payroll.
Also, what style of education will you provide? Plan activities with the assistance of your staff to support that style of learning.
Market Your Business
It isn’t enough to open a business; you need to let the right people know you are there. Go back to your business plan and create a marketing strategy for getting the attention of those you expect to purchase your services.
Use both online and print materials to spread the word. Set up a website, create social media business profiles, and partner with local schools, churches, and businesses to promote your daycare center.
More and more people are going into business for themselves. Some will not succeed due to lack of planning. Follow these guidelines and educate yourself on how to run a business and your dream daycare center can become a reality.