Are you ready to start your dream daycare business? Congratulations! In the following article, we cover the most important steps you will need to take in order to launch your childcare business. There may be challenges ahead, but careful planning and preparation will set you up for success. This guide is a great place to begin.
How Do I Know I Am Ready to Start My Childcare Business?
Great question! As with all new endeavors in life, you can never be one hundred percent ready for a new business venture, but we encourage you to use the following questions to help you assess whether starting your childcare business at this time is right for you:
- Do you have significant childcare work experience?
- What is your educational background? Do you have formal training or a degree in Early Childhood Education or a similar child development program?
- What is your motivation for starting a childcare business? Do you love children enough to work with other people’s children day in and day out, riding out challenges and meeting the demands of childcare work and business ownership?
- Are you in a financially, mentally/emotionally, logistically stable place in life? Are you reasonably healthy? A new business venture is an exciting, but taxing, opportunity.
- Is there a need in your community for your daycare business? The need for childcare services is on the rise, but is this need already being met by existing daycare businesses in your area? You will want to find out.
Once you are certain you want to move forward with launching your own childcare business, here are some essential first steps you will need to take.
Research State and Local License Requirements
In order to operate a legal childcare business, you will need to obtain the proper licensing from your state and local governing authorities. You can check out your state’s license requirements through online resources, like Childcare Aware of America and the National Database of Childcare Licensing Regulations. You can also check with your local government’s office of children and family services.
Construct a Business Plan
If you decide to apply for a small business loan to open your childcare business, you will need to put together a comprehensive business plan for your new daycare. Even if you don’t pursue funding from a lender, a business plan is a must. Your business plan will help you create a comprehensive picture of your daycare business. It will help you answer essential questions about your business:
- Will you run your daycare business out of your home?
- Will you lease or buy space?
- Will you purchase an existing daycare?
- Will you work by yourself or will you hire employees?
- What will your budget look like?
- How many children do you plan to enroll?
- How will you market your business?
- How will your business meet the needs of families in your community?
- Who is your target market?
- Who are your competitors?
- How will you use loan funds?
- What start-up costs do you anticipate?
If creating a business plan sounds intimidating, be encouraged. The more thought you invest in developing a sound business plan, the better prepared you will be to face the realities of starting your daycare business. If you have a well-developed plan to follow, you will be more likely to succeed in your childcare business venture. This step is crucial.
What kind of insurance will you need to open your daycare business? It depends on what kind of childcare business you plan to operate. General liability insurance, property insurance, professional liability insurance, workers’ compensation, and umbrella insurance are some of the options you will need to consider. Check out this article from the Honest Buck Accounting blog about your preschool insurance options.
Develop Policies and Procedures
Work out all the fine details concerning the policies and procedures you want in place before you open your daycare doors to clients. There are a variety of daycare policy templates online to help you with this step. You will want to carefully write out everything from your safety, medical, and emergency procedures, to your health, nutrition, and daily care policies, to your payment and attendance policies, plus all other protocols you, your staff, and your clients will adhere to when your business launches. Your state and local daycare licensing requirements will be a helpful guide as you develop your policies and procedures.
Get Your Daycare Facility Ready
Whether you will be running your daycare out of your home or operating at a separate location, you will need to purchase the necessary equipment and supplies. Safety equipment like first aid kits and fire extinguishers, cleaning supplies, classroom furniture, baby gear, food and feeding supplies, toys, arts and crafts supplies, diapers and wipes, and quality administrative tools, like a digital childcare management software program, are a few categories of supplies you will need to consider as you get your daycare facility ready for little ones. Your supplies should, of course, be accounted for in your business budget.
Hire Staff and Choose Curriculum
These steps may not be relevant to your daycare business, but if you do need to hire employees and choose a preschool curriculum for your childcare program, you will want to do both with care. Check out this article for best hiring practices and tips to hire the right employees for your new daycare. Then take a look at this guide to choosing a preschool curriculum that meets the needs of your daycare program.
Market Your Daycare Business
It’s time to spread the word and enroll your first daycare attendees. How will you market your daycare business? As with all business expenses, marketing should always be included in your childcare business budget. Take advantage of no-cost and low-cost marketing tools, like word-of-mouth, flyers in local businesses, libraries, coffee shops, churches, grocery stores, and other places of interest in your community, social media pages, and online business listings, like Yelp, Angie’s List, and Google My Business. Create a website for your new daycare business to establish your online presence. You don’t have to try every marketing tactic under the sun but stick within your budget and use as many avenues available to you to spread the word about your daycare.
Hire a Knowledgeable Accountant
Your business is your livelihood, so make sure your finances are in good hands from the start. Many daycare business owners soon find themselves completely overwhelmed by the financial side of their business. Payroll processing, tax preparation and compliance, invoicing and receivables, and optimizing your budget can add undue stress to the already high demands of childcare work. Give yourself peace of mind and ensure the profitability of your new daycare business by outsourcing your business accounting to the experts.
It’s no secret that the financial experts here at Honest Buck Accounting are passionate about helping driven entrepreneurs launch and grow successful childcare businesses. We hope this guide to the essential first steps of starting your dream daycare business will be helpful to you. Now that you’ve taken the first step to starting your dream business by reading this guide, take the next step and schedule a discovery call with our accounting team! We would love to learn more about your childcare business accounting needs.