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Today the vast majority of parents work full-time in addition to raising their children. Roughly four in five parents utilize some form of child care as they struggle to balance the responsibilities of their jobs alongside being a parent. Day cares provide a valuable service to these parents. Furthermore, by engaging children in fun and educational activities with peers, day care centers allow children to develop some independence from their parents, as they learn how to play cooperatively with kids their own age.

Start a daycare by following these steps.

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your daycare. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

What are the costs involved in opening a daycare?

The cheapest business model for a start-up daycare is to run your daycare out of your own home. In this scenario, you could accommodate up to four or five children without having to pay rent for a separate facility, and your only monthly expenses would be food, toys, and other educational materials. Expect a one-time cost of up to $300 or $400 per child for general supplies, and an additional $80 to $100 a month for food. You may require different devices, like a child lock gate, and other safety locks for drawers and cabinets. In total this shouldn’t cost much more than $100.

In addition, you will also likely want to invest in some small-scale local advertising, and a custom-built sign for the front of your home.

The final major start-up cost for your business will be the legal fees associated with registering your business and drawing up contracts to protect your business from liability claims.

What are the ongoing expenses for a daycare?

For a home daycare, monthly costs could be as little as $50 per child for basic food items and other supplies. Bigger daycare facilities will need to pay rent and utilities, as well as insurance costs, depending on the number of children they accommodate.

Staffing expenses will likely be the greatest monthly cost, as most states require several adults to be present at any given time when group sizes go beyond a certain amount of kids.

Annual salaries for a daycare worker and daycare teacher are approximately $20,000 and $25,000 respectively, depending on experience

Who is the target market?

Your main clientele will be working parents who have young children and who need someone to help watch their kids during the day. Depending on your location and the specific needs of your local community, you may also wish to cater your services to a certain demographic. The kinds of clients you attract will also largely depend on how much you charge and the quality of care you are able to provide.

How does a daycare make money?

Day care providers are paid either an hourly rate per child or a fixed monthly or annual rate.

How much can you charge customers?

Childcare rates are adjusted according to the following four factors:
Whether your business is located in an urban, suburban, or rural setting
What kind of childcare you provide, and what special services you offer
The age of the child
The number of hours the child will spend at your center each week

Daycare centers throughout the United States charge anywhere from $350 to over $1,000 per month per child for full-time care. Average expenses vary state-by-state, with states like Massachusetts, New York, and Minnesota tending to be the most costly, and states like Mississippi, Kentucky, and Louisiana tending.

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