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Develop a Business Plan

Occupations with a high number of employees working nights and weekends--such as janitorial, hospitality, customer service and technical support--are experiencing substantial growth, and workers in these fields find obtaining quality child care an even greater challenge than their 9-to-5 counterparts. For many working parents, there is no single solution to their child-care needs. More than a third use more than one option, such as day-care centers part of the time and friends, neighbors or relatives on other occasions.

A recent study conducted by the Urban Institute, a nonprofit policy research organization, revealed that about 30 percent of working parents have two child-care arrangements, and another 8 percent are using at least three. The study found that 65 percent of parents juggling multiple child-care arrangements use a combination of formal day-care centers, Head Start programs, and baby-sitting by relatives and friends.

Another 20 percent use two separate day-care centers. What are the characteristics of a person who would do well operating a child-care center? Lois M. If you're going to be running a family child-care center, Brenda B. A child-care business can easily be started in your home with just a few weeks of planning and a modest amount of startup cash. A commercially located center takes a greater investment of time, energy and money.

The size and type of business you choose will depend on your start-up resources and goals for the future.

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Many child-care providers are satisfied with a one-person operation in their home that generates a comfortable income while allowing them to do work they enjoy and possibly even care for their own children. Others may start at home and eventually move to a commercial site as the business grows. Still others begin in commercial locations and are either content with one site or have plans to expand. As you complete your startup efforts, use this checklist and tailor it to your own needs to make sure you've covered all your bases before you open your doors.

Prime candidates who need full-time child care are parents with infants to 5-year-olds. Parents with children over 5 are good prospects for after-school care programs. The market segments most likely to use child-care services are dual-income families and single-parent households in most income brackets. A number of government programs help low-income families pay for child care so the adults can stay in the work force.

Within this very broad market is the more narrow group of clients you'll serve. Use market research to figure out who these people are and how you can best attract them to your center. Janet H. The goal of market research is to identify your market, find out where it is, and develop a strategy to communicate with prospective customers in a way that will convince them to bring their children to you.

When Lois M. Contained in that 5-mile radius were six child-care centers serving approximately children. Brenda B. Living in a small town, she knows just about everyone and is well aware of the lack of child-care services. I've had families on my waiting list for up to two years.


Before you open your doors to the first child, you should decide on the services you'll provide and the policies that will guide your operation. To simply say you're going to "take care of children" is woefully inadequate. How many children? What ages? What hours? Will you provide food or ask their parents to? What activities will you offer? What sort of price and payment policies will you have? And the list goes on. Your first step is to check with the appropriate regulatory agencies to find out what's involved in providing particular services. For example, each state has its own guidelines for the maximum number of children and maximum number in each age group in a family child-care facility.

States also have guidelines regarding the number of caregivers required per number of children in each age group for commercial facilities. There will likely be other requirements and restrictions, depending on the type of facility you run. Decide what services to offer based on your own preferences and what your market research says your community needs.

Your choices include:. Caring for children can be enjoyable and rewarding, but if you're taking care of other people's children and accepting compensation for it, then caring for children is a business and it needs to be managed accordingly. Even though you probably want to get into this business because you love children and not because you love to keep records, pay taxes and worry about staffing, you must do these tasks effectively if you're going to maintain a viable operation.

The high rate of attrition in the child-care business is driven in large part by the fact that many caregivers focus almost exclusively on nurturing and caring for the children in their charge, and neglect the financial and management sides of their operations. But whether your goal is a small, family child-care center or to build a chain of commercial locations, you must deal with administration and management issues if your business is going to survive.

Everything You Need to Start a Day Care Center

If you plan ahead, that won't be hard. Set up your financial record-keeping system from the outset in a way that will provide you with the information you need to monitor your profitability and handle your tax reporting. You may want to hire a consultant or an accountant who specializes in small businesses to help you at first; this small investment could save you a substantial amount of time and money in the long run.

Expect to spend a significant amount of time on management, marketing and administration. If you have employees, they need to be trained and supervised. Provider Resources.

Day Care How to Choose the Best Facility for You | What to Expect

Search Now. State by State Resources for Families Want to learn more about child care in your state? Search by State. Checklists for Your Child Care Visit In-person child care visits help families learn about a program before choosing one. Download Checklists. E-Books for Child Care Providers Check out our new resources designed to help child care providers open and operate a successful child care business.

Find Resources. Address N. Courthouse Rd. Television ads are pretty expensive to create and distribute. You'll probably have to hire a company to produce the ad for you so it looks professional. This is a cheap and easy way to spread the word about your new business. Focus on neighborhoods and places frequented by young families.

Benefits of day care

To open a child care business, start by developing a business plan and budget. Next, select a location, prepare it for inspection, and contact your local government about completing the inspection and obtaining your business license. Then, purchase child-friendly equipment for your facility and hire trustworthy employees with experience working around children. Once you're equipped and staffed, start advertising your business!

For tips on complying with government and tax laws, read on! This article was co-authored by our trained team of editors and researchers who validated it for accuracy and comprehensiveness. Together, they cited information from 8 references. Categories: Business by Industry. This article has over , views, and 31 testimonials from our readers, earning it our reader-approved status.

Learn more Assess the need for child care in your community. Before you decide to open a business that provides child-care services, your first step should be to research the market for that service in your community. There are several ways you can obtain this information, but perhaps the best way to do this is to talk directly to local parents to determine the specific child-care needs of the community in which you want to do business. Try some of the following: Interview several families and ask the parents what type of child care they could benefit from, and the extent to which this type of service is already provided by local businesses.

Look at census data for your community, including the number of working families with children of an appropriate age, the number of recent marriages, and the income distribution of those families. You can find this information from a number of sources, including the U. Census Bureau or your local municipal government office. Identify existing child-care businesses.

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  6. Your next step should be to determine who your potential competitors might be. If there are a number of businesses in your area offering a certain type of child care, it would be best for you to distinguish yourself by serving a need yet unmet in your community. Consider some of the following when evaluating your potential competitors: What age groups are already being served?

    What are the hours of the other businesses? What types of child-care services are already on offer in your community? How many of these types of businesses already exist in your community? Decide whether you will operate a home-based or center-based child-care business. While the specific types of child care you may decide to offer are numerous, there are basically two forms of child-care businesses: 1 a business run out of your home or 2 a business run at an independent location. Which type of child-care business you would like to run will determine what you will need to account for in your budget and what legal requirements with which you will have to comply.

    When making this decision, consider that home-based child-care businesses generally have fewer expenses and lower overhead, have more flexible hours, and are more convenient for you and, likely, the parents whose needs you will be serving. The legal requirements to operate a home-based child-care business are also generally less strict than those for a center-based child-care business.

    What does a Childcare Worker do?

    Decide what kind of child-care business you want to operate. After deciding whether you wish to operate your child-care business at home or in an independent facility, the next step is to decide what type of child care you would like to offer. Perhaps the best way to start making this decision is to examine your motivations for going into the child-care business.

    By considering why you want to get into this type of business in the first place, you can better understand what exactly you want to offer your community. Do you want to offer care based around a particular faith? Do you want to offer a learning environment focused on building or reinforcing skills? Do you want to offer a space for children to come and play?

    Deciding what type of service you will offer up front will not only allow you to build the business you want, but it will also allow you to budget for the things you might need to run such a center effectively educational materials, toys, etc. Make a budget. One of the most important things you can do when preparing to start a business is to make a budget.

    Doing so will help you plan for the future of your business, and ensure that it has the opportunity to succeed based on the funding you have available to you. You should consider start-up expenses, annual expenses, and monthly operating expenses. When making your budget, consider the following types of expenditures: Licensing, inspection, and insurance fees. Medical testing and clearance. Safety devices e. Food, toys, and equipment for your planned activities. Wages for prospective employees. Rent, mortgage, and utility fees. Choose a name for your business. One of the more important steps in the process is choosing a name for your business, because that is what will represent your services to the outside world.

    Your name should be catchy, easy to remember, and should indicate the type of service you will be providing. You will need to check with the secretary of state's office for your state to ensure that your proposed name does not conflict with any other name currently on record with the secretary of state. Choose a type of business entity. There are several different types of legal structures for your potential business, each with its own benefits and drawbacks. For instance, if you operate as a sole proprietor, you will have likely have an easier time filing your taxes.

    However, if you operate as a corporation or a limited-liability company, you will be able to limit your liability for anything that happens while you operate your business to the funds that you placed in your business i. Part 1 Quiz Why is it beneficial to use a separate building for your child care business? There's less overhead cost than a home-based business. You have room to expand your business. You can set flexible hours.

    You can offer more specialized care. All of the above Not quite! Contact your local country municipality. Once you have a business plan in place and are ready to actually start setting up your business, your first step should be to contact your local government to determine what legal requirements with which you must comply in order to properly run a child-care business in your county. What sort of building codes you must meet. What sort of occupancy laws are in effect in your county i.

    You can also contact your local child-care agency an arm of state government by typing in your zip code on this website and clicking "search for your local agency. Select a location. If you plan to operate your child-care business out of your home, then this step is already complete. If you plan to open a separate facility, however, you will need to choose one that is in a good location that you can afford based on your budget.

    You will also need to consider, depending on your available funding, whether you will buy or rent this space. If you are looking for a location outside of your home, consider the following factors when making your selection: Is the location convenient for parents? Does public transportation serve your proposed location?

    Is the area safe? Is the space adequate for the business you intend to run there? Contact your county's zoning office. You will have to make sure that your proposed location complies with local zoning laws. To do this, contact your county's zoning office and inquire as to whether your proposed location is properly zoned for child care. Prepare your facility for inspection. You may also need to post an emergency evacuation plan.

    If you do not pass the first time, you will likely be given an opportunity to correct the errors and arrange to be inspected again. Schedule necessary inspections.

    Child Care Providers

    Depending on your jurisdiction, you will likely have to obtain a series of inspections to ensure that your proposed location complies with local health and safety laws. A health inspection. An environmental health inspection. Obtain necessary licenses. In the vast majority of cases, you will have to apply for and be granted the proper licensing in order to care for children. The type of licensing you will need will depend on your jurisdiction.