Costs of Starting Up a Day-Care Center

People who love children might consider owning and operating a day-care center as a career choice. Depending on the type of day-care center you would like to open, the costs can vary. Opening a home day-care center can require an investment of as little as $300, whereas startup costs for a full-scale center can be $10,000 or more, depending on your location. When considering starting a day-care center, there are several points to evaluate to assess your startup costs.

Types

Your first step will be deciding the type and size of day-care center you want to open. In-home day-care centers usually accommodate no more than seven children per caregiver, with no more than three being younger than age 2. If you decide to care for infants only, most states limit that number to four or fewer infants per caregiver.

If you decide to open a center, the requirements will vary by state or county, and in most cases, the number of children you can care for will vary by the physical size of your location and the size of your staff. Employees of a center are required to be paid minimum wage and most likely will expect benefits to ensure a quality staff.

Another type is a combined home and day-care center. This is an in-home day-care center where half of your home may be converted into a day-care center, and you hire one or two employees. The cost of these employees can be minimal, such as college students that may work for three or four hours a day at minimum wage with no benefits.

To best determine which works better for you, decide your purpose of opening a day-care center. If it is mainly to care for your children along with others, you will want to start with a home center

Requirements

State and counties have specific requirements regarding licensing, CPR certifications, regulations that may require you to make repairs, etc..

In most states, the licensing fees require more time than money. Approximately $35 to $100 will be required. CPR is often one of the classes you need to take to get licensed, which will cost about another $30.

You don't have to be licensed if you care for four or fewer children (as when kids babysit at night), but it does allow you to care for more children and apply for food reimbursement programs for meals.

Other requirements by states involve safety concerns, such as water temperature, door or cabinet locks, and sanitary conditions.

Equipment

Next you will need equipment to run the day-care center. Some items you will need include:

Toys: $50

High chair(s): $50 to $100 (shop discount or closeout stores, or use the ones you may have used for your own children, but be sure your equipment is in good shape and up to current standards).

Playpens: $50-100 -- most states require individual sleeping areas for infants.

Changing area: Cost varies depending on what you set up. It could be as simple as a mat or a changing table.

Other items would include decorations, books, activities, spare items that parents may forget and table settings for children.

Advertising and Business Costs

Day care is a business, and you will need to treat it that way. Advertise your services (craigslist.com is free, local newspapers vary), set up an accounting system (which may be a simple log of payments by child or family), insurance, telephone (around $20 a month) and miscellaneous supplies ($30 month).

Inusrance may include liability and building insurance if you open a center and can cost as much as $1,000 a year. If you have a home center, you can add a rider to your current policy for around $20 month to add protection for the children in your home and the parents coming to pick them up.

Conclusion: Total Costs

So what are the total costs?

If we look at a home day-care center, the breakdown looks like this:

Licensing and training: $50

Equipment: $200
Advertising: $25
Insurance rider: $200 a year ($20 month)
Miscellaneous: $50

Total: $525

If you decide on opening a day-care center, the costs above this will increase depending on the size, and you will need to add in rent, perhaps a larger insurance policy, employee costs and utilities.

References

• Small Business Administration day-care centers
• Day-care budget article
• Day-care licensing by state

Resources

• Small Business Administration day-care centers
• Day-care licensing by state