The daycare industry in the United States is thriving. Since 2014, the industry has recorded 3.5 percent growth annually, generating a whopping $56 billion in 2019.
As an entrepreneur looking to start a daycare business, there couldn’t be a better time to break into the industry. You can turn your passion for kids into good money.
However, just because the industry is thriving doesn’t necessarily mean your new daycare business will. Starting a daycare business that can succeed means doing your research and establishing a strong foundation.
Continue reading for a comprehensive guide on how to start a successful daycare business.
Understand the State of the Day Care Industry
Nationally, the daycare industry is doing well. However, there are specific states or local regions experiencing slow growth.
This is why the first step to starting a daycare business that will thrive is to understand the nature of the daycare industry in your state. Narrow down to the locality you’d love to open the business.
Are existing daycare businesses blooming?
If the local industry is struggling, it won’t be a savvy move to go ahead and start the business anyway. You’ll only be setting up yourself for failure.
In addition to developing a clearer picture of the industry, it’s important to understand how daycare businesses operate.
Know Your State’s Day Care Licensing Requirements
The daycare industry is heavily regulated, and it’s easy to see why. Children are typically a vulnerable lot, which means they need the best care. State governments develop and enforce regulations for the establishment and management of daycare facilities.
As such, the next step is to research your state’s daycare licensing requirements.
What guidelines do you need to comply with before your new business can obtain the required licenses? How will these requirements affect your ability to start and run the facility as a business?
Besides state licensing requirements, there are well-established national industry standards that all daycare facilities should adhere to. Check out these standards as well so that you can embark on building the business with them in mind.
Draw a Business Plan
A daycare facility is a small business, but this doesn’t mean you can start it without having an elaborate business plan. This is the document that spells out the nature of your daycare.
Drawing a good business plan can be challenging, particularly if you don’t have any business plan writing experience or expertise. Don’t force your way with it. It’s savvier to hire a small business consultant with daycare management expertise to help you write it.
Either way, your business plan should include the following details.
- Name of the daycare facility
- Ownership and organizational structure
- Vision and mission statement
- Range and description of services offered
- Capital requirements
- Financial (income) projections
- Sales and marketing strategy
- Staffing and operations strategy.
Raise the Startup Capital
One major benefit of hiring an expert to write your business plan is you’ll get a good estimate of the amount of money you need to start and run the business until it’s turning a profit.
Do you have the required startup capital? If you’re self-funding the business and the money is ready, you can proceed to the next.
However, if you’re anything like most entrepreneurs, you certainly have a small portion of the money or none at all. Don’t make the mistake of starting the daycare without the required capital. This is why you should embark on raising the amount of money you need.
There are a couple of options at your disposal. You could take out a business loan, fundraise from friends and family, partner up, or get funding from an equity or angel investor.
Each of these options has its pros and cons, so be sure to do your research and settle on a funding strategy that suits your needs.
Identify an Ideal Location
When starting a daycare business, location matters. You need to find a place with not only a sizeable number of potential clients but also one that’s easily accessible.
Be sure to keep an eye on the competition. Don’t settle on a location that already has an established daycare. Your facility might not be able to shake off the competition.
Set Up the Facility
A daycare facility needs special planning. The layout must meet relevant safety guidelines. You can hire a contractor that specializes in equipping daycares with the necessary structures.
Bear in mind the daycare licensing agency in your state will inspect the facility before issuing you with a license or permit. You cannot afford to slip up, which is why hiring a contractor is important.
Once the facility is set up, focus on hiring the daycare staff.
Daycare workers who care for the kids must have occupational licenses and must pass background checks. Your state might not have these requirements, but if you want your facility to develop a reputation for providing the best childcare services, you should hire qualified and diligent workers.
Prepare Your Facility for Launch
With everything set up at your facility, you’re ready to open its doors and start receiving your first clients.
You can plan a launch ceremony so that people can come to check out the facility. You want the first impressions to be spot on. Read this article to find out more about the importance of showcasing your facility.
Remember the marketing strategy in your business plan? This is the time to implement it.
Starting a Daycare Made Easy!
Starting a daycare is a sound business decision. The demand for childcare services is high in most communities. You just need to get the basics right.
With this guide on how to start a daycare, you’re now in a stronger position to build a business that will succeed.
Keep reading our blog for more small business tips.