How to Start a Daycare | Preschool Business Guide 2026

Opening a daycare not only helps contribute to children’s early development but also generates profits with efficient business planning.  

You don’t need prior experience to run a daycare. Basic qualifications and certain training are sufficient to meet eligibility criteria. 

Our detailed guide “How to Start a Daycare” covers licensing, planning, safety, and enrollment with step-by-step guidance.

Decide on Your Daycare Type

Before starting a daycare, the most important decision you need to make is “which daycare is best for you.”

You can choose to open a home-based daycare and set up a preschool facility in your own home. Alternatively, you can purchase or lease a location to establish a preschool daycare center.

The type of daycare you choose will impact the overall cost of your staff requirements, licensing rules, and other expenditures. 

Though running a daycare requires equal effort, there are still a few differences to understand before making a decision. 

Once you choose a daycare type, ensure you go through your state’s licensing requirements and have all the required approvals. Keep in mind, the number of children attending your daycare program also matters.

Check Your State’s Licensing Requirements

Since childcare rules aren’t the same in every state or country, you need to be aware and well informed. 

• Step 1. Start by searching your state’s licensing agency; you can refer to sources like ChildCare.gov
• Step 2. Find territory information and apply to your state’s childcare licensing office
• Step 3. Then submit background checks for every adult present in your daycare center
• Step 4. Once you submit your file, a health/fire inspection will take place
• Step 5. The next step is approval, but it completely depends on the state and how long they take for approval

Along with the inspection, you will be required to submit the following documents. However, every state has its own set of document checklists, so you might encounter 1-2 different documents. 

• Application for Daycare license
• Proof of identification
• Proof of address
• Business registration documents
• Documentation of background checks
• CPR and First Aid certifications
• Training records of staff
• Document from fire department
• Emergency plan
• Floor plan
• Proof of insurance
• Registration forms of children
• Parental consent form
• Staff documentation
• Health records 

Questions to Ask the Licensing Office: 

Before you complete the required document checklist, do not forget to ask the following questions. Because if you lack any essential parameter, your business might not get approved. 

• Can I operate a daycare center in my own house?
• How many children can I look after?
• What is the age criteria for opening a daycare center?
• What amount of space do I need?
• How many staff members do I need?
• What training is required?
• What background checks should be performed?
• What inspections are necessary?
• What kind of records do I need to keep?
• How often will my daycare center be inspected?

Structure a Business Plan

A preschool daycare is a child care service converted into a business. To run this business successfully, you are required to structure a roadmap. 

Working Hours for Daycare

Before you physically open the business, plan the child capacity you want to take care of and for how long. 

• For example: Some daycares provide kindercare services for 03 – 05 hours. And some daycares provide full-day services for 07 to 08 hours, depending upon their parents’ working hours. 

One-Time & Monthly Expenses 

Your one-time costs will usually include furniture, safety items, toys, signboards, and other items required to set up your dream daycare. 

Your recurring monthly expenses include rent (if applicable), staff wages, sanitary & cleaning supplies, basic utilities, advertising expenses, and insurance. 

Daycare Software for Streamlining Administrative Tasks

A business includes various administrative tasks that need to be monitored all the time. However, this can become a challenge if you are starting a business for the first time. In that case, you can get help from software to streamline all your administrative tasks and automate them. You can: 

• Keep child records
• Manage payments
• Organize registration forms 
• Track attendance of child 
• Update parents with messages 

To optimize your tasks, you don’t need expensive software; you can pick any tool that fits your budget.

Insurance for Daycare Business 

Insurance is always for uncertain days, which helps protect your business. However, local rules and the type of your daycare decide the right coverage you are entitled to receive. Some common types of coverage include: 

• Property coverage (commercial property insurance)
• General liability insurance 
• Your staff’s compensation (workers’ compensation)
• Professional liability insurance
• Abuse and molestation liability insurance
• Separate compensation for home-based businesses

Consult with an insurance professional; they will guide you through different insurance packages and their benefits. 

Choose Appropriate Space and Prepare Interiors 

Child-appropriate interiors are key to any good preschool daycare space. It helps attract kids with bright colours and helps develop motor skills. Along with that, there are a few things you should be careful about, like: 

• Your place should have enough space per child, so that they can easily roam around and take part in activities 
• Make sure your space has at least 2 exits in case of emergency
• Along with soothing LED lights, ensure your space also has natural light coming in 
• The furniture you are using should be eco-friendly; avoid harmful plastic materials 
• The play area should be fenced properly 
• A separate napping area should be there for quiet time 
• Bathrooms should be accessible to children and should have nannies for assistance
• Ensure the toys are eco-friendly, promote motor skills, are easy to play with, and have soft edges

Buy Furniture and Supplies

Furniture for preschool daycare is quite different from ordinary furniture. 

• It should be durable, have child-sized tables & chairs, and low open shelves
• Invest in high-quality resting mats for toddlers and preschoolers for nap time
• Ensure you have enough space for daycare cubbies, so that kids’ belongings are clearly visible to kids and caregivers
• Choose tables with wide leg space that have enough mobility
• Another necessary aspect is to invest in furniture that is easy to clean & sanitize
• If you like adaptive furniture, only use it if it solves the need
• If investing in mobile units, ensure they are not tall and heavy

The smart decision is to only invest in required furniture and keep other areas clear for clean pathways. Because kids require enough space to walk, play, learn, and rest in between. 

Meet Health and Safety Requirements

Before you seek approvals, ensure your preschool daycare complies with all safety, sanitary, and health measures.

• Ensure it has active smoke detectors and fire extinguishers
• Your place should have carbon monoxide detectors 
• All electrical outlets should be covered and out of kids’ reach 
• The furniture should have anti-tip straps to protect kids from sharp corners 
• Your cleaning supply room should be out of reach of children and always locked 
• Be prepared for urgent medical emergencies, and store basic necessity medications
• You should ask parents if their child has any ongoing medical condition
• Keep small items away from children’s reach that may choke them through the nose or mouth
• Have regular inspection of meals served to children (if provided)
• Ensure your daycare space is spill-free and dry at all times

These are the basic measures you can cover in childproofing to prepare your space safe and sound for any child. However, you should also consider your state rules & regulations to comply fully.

Get Required Training and Certifications

It’s essential for staff members to have basic training and certifications to prove themselves fit for handling and educating children. Along with that, you are required to have Kindercare training like: 

• CPR
• First aid certification
• Safe sleep training
• Child health and safety training
• Emergency training
• Child development training 
• Basic health/food safety course (If applicable)

Along with these educational training programs, you require a business registration (LLC or sole proprietorship) and a background check certificate. Registering your business not only validates your business identity, but it also develops trust among parents. 

Set Your Enrollment Policies

Most parents evaluate the daycare before enrolling their child. So, you need to create a simple yet impactful enrollment procedure. This may include forms for basic details and face-to-face meetings to discuss package details and show them the daycare space. 

To create a package, you can include weekly or monthly subscriptions along with a late pickup fee. However, before finalising your price, analyse others’ daycare packages and calculate your cost per child. 

Also, be aware of what happens if any parent fails to complete their payment. Prepare a notice period for withdrawing the child in such cases.

Hire Staff if Needed

When opening a preschool daycare at home, you at least require 1 attendant and a nanny for proper sanitation. But if you are interested in a daycare centre, a team of qualified attendants, nannies, and a caretaker is required. 

However, before hiring individuals, always consider your state’s rules & regulation for staff-to-child ratios by age. 

Some basic hiring processes include: 

• Step 1. Describe the exact duties of the attendant in the job description
• Step 2. Once the profiles start to pour in, analyse their child care experience
• Step 3. Check if the person has the required kindercare training and education 
• Step 4. If everything feels right, move towards background checks
• Step 5. Check references, if any 
• Step 6. Also confirm if the candidate has proper first aid training and CPR training 
• Step 7. After completing the interview, explain your daycare rules and give them clear duties to follow

Market Your Daycare and Open Enrollment

Once your business is established, marketing is equally important. But you don’t have to spend a lot on advertising your business. 

• You can list your business on Google Business Profile and develop your presence online
• You can join parent groups on social media platforms 
• Otherwise, you can have word-of-mouth referrals 
• Having a small website also benefits your business’s credibility and spreads your business quickly
• Along with these, you should put up a signboard for awareness 

FAQs 

Get answers to all your queries in the following frequently asked questions section. 

Do I need a license to run a daycare from my home?

It depends upon your state. Some home preschool daycare businesses may be exempt from licensing, while others require it. 

How many children can I care for without a license?

There is no single number for all states. Refer to your state’s rules and regulations and analyse the space you have and how many children are allowed. 

What qualifications do I need to open a daycare?

Your qualifications requirement depends upon the type of daycare center you wish to open. Basic CPR, first aid, background checks, education, or child care experience is essential. 

How long does it take to get a daycare license approved?

Approvals depend upon the paperwork that needs to be done, along with background checks, building approval, inspections, etc. 

What is the staff-to-child ratio for a daycare?

The staff-to-child ratio depends on the child’s age and the type of your daycare. For example, younger children often require more adults to take care of them.

Is starting a daycare profitable?

A daycare business can make money, but profits are not guaranteed. Your income depends upon the enrolment you will receive, but you have recurring expenses too. So, it’s important to plan your budget. 

Conclusion 

If you want to generate profits from this business, always keep a realistic budget and advertise your name loudly. Invest in eco-friendly furniture, maintain proper hygiene, and keep the area playful. Focus on the quality of attendants or staff members you are hiring. And lastly, follow your state’s rules & regulations.