How to Start a Licensed In-Home Daycare

Starting a licensed in-home daycare is an excellent way to work from home, care for young children, and run your own business. The demand for quality childcare is high, making this a rewarding and potentially profitable venture. However, to ensure the safety and well-being of the children, in-home daycares are regulated, and obtaining a license is necessary. This guide walks you through the steps on how to start a licensed in-home daycare, covering everything from initial planning to compliance and promotion.

Step 1: Research State Licensing Requirements

The first step in learning how to start a licensed in-home daycare is understanding what kind of licensing you need. Licensing requirements for in-home daycares vary by state, so it’s crucial to understand the specific regulations in your area. Most states require in-home daycares caring for a certain number of children to be licensed. Visit your state’s Department of Health and Human Services (DHHS) or Child Care Licensing website to learn about:

• License Types: There may be different licenses depending on the number of children you plan to care for, ages, and other factors.
• Background Checks: Many states require background checks for anyone over 18 living in the home.
• Training and Certifications: States typically require basic childcare, first aid, and CPR training.
• Space Requirements: Guidelines on the layout, safety equipment, sleeping arrangements, and sanitation.

Pro Tip: Some states have online portals that guide you through the licensing process, provide forms, and offer information on regulations.

Step 2: Develop a Business Plan

Another important part of how to start a licensed in-home daycare (and any business in general) – is writing your business plan. Creating a business plan for your daycare will help you organize your goals, outline your services, and calculate initial costs. It’s essential for securing financing and establishing a roadmap for your business.

Key Components of a Business Plan:

• Mission Statement: Define your daycare’s mission and values.
• Services Offered: Detail the ages you’ll care for, hours of operation, and special programs, if any.
• Market Analysis: Research local demand for daycare services, competition, and pricing.
• Budget: Outline startup costs, operating expenses, and expected revenue.
• Policies: Define policies for sick children, discipline, and meals.

Pro Tip: Include a plan for handling emergencies, health protocols, and other safety issues, which will be essential for licensing and appealing to parents.

Step 3: Complete Required Training and Certifications

Many states require training in basic childcare and first aid to ensure the safety of the children under your care. Look into the specific requirements for:

• CPR and First Aid: Most states mandate CPR and first aid certification.
• Child Development Training: Some states require coursework in child development, nutrition, and child safety.
• Ongoing Education: Licensing agencies may require ongoing professional development in early childhood education.

Pro Tip: Check with your licensing agency for approved training providers, as these may vary by state.

Step 4: Prepare Your Home to Meet Safety Standards

Your home environment must meet specific safety standards to get approved as a licensed daycare. This includes setting up the space, child-proofing, and ensuring a nurturing environment.

How to start a licensed in-home daycare – check these:

• Designated Play Area: Set up a play area with age-appropriate toys, books, and activities. Ensure the area is free from hazards.
• Child-Proofing: Install safety gates, cover electrical outlets, secure heavy furniture, and remove any choking hazards.
• Sleeping Arrangements: Provide cribs, cots, or nap mats as per your state’s requirements. Bedding should meet safety standards.
• Sanitation: Have hand-washing stations, disposable gloves for diaper changes, and sanitation routines for toys and surfaces.
• Outdoor Space: If you plan to use outdoor space, secure it with a fence, remove harmful plants, and ensure supervision areas.

Pro Tip: Most states require regular inspections, so having everything in order from the start will help streamline the approval process.

Step 5: Apply for Your License and Schedule an Inspection

Once your home meets all requirements and you have completed the necessary training, it’s time to submit your license application and prepare for an inspection.

Licensing Process:

• Submit Application: Complete and submit the licensing application form, along with any required documentation, such as proof of training, background checks, and a floor plan.
• Pay Fees: Most licensing applications include processing fees, which vary depending on location and license type.
• Schedule Inspection: A licensing agent will conduct a home inspection to ensure your daycare meets health and safety standards. Be prepared to address any concerns or modifications they may suggest.

Pro Tip: Have a checklist based on state requirements so you’re fully prepared for the inspection. The inspection checklist might be very valuable in how to start a licensed in-home daycare preparation.

Step 6: Establish Operational Policies and Procedures

Clear policies and procedures help create a smooth and professional environment for both you and the parents of the children in your care. Consider drafting policies for:

• Daily Routine: Outline activities such as playtime, nap time, meals, and educational activities.
• Meals and Snacks: Decide if you’ll provide meals and snacks or if parents need to pack food for their children.
• Drop-off and Pick-up: Set clear times and procedures for drop-off and pick-up, including late fees if applicable.
• Sick Policy: Clearly define when children should stay home to prevent the spread of illness.
• Emergency Procedures: Include plans for fire drills, medical emergencies, and other potential issues.

Pro Tip: Create a parent handbook with all your policies and share it with families during the enrollment process.

Step 7: Set Competitive Pricing and Payment Options

Research daycare rates in your area to set competitive prices for your services. Decide on payment schedules, such as weekly or monthly fees, and policies on late payments.

Common Pricing Factors:

• Full-Day vs. Part-Day: Charge different rates depending on whether children are in full-day or part-day programs.
• Sibling Discounts: Offer a discount for families enrolling more than one child, if feasible.
• Additional Fees: Consider any additional costs, such as registration fees or supplies fees, to cover materials and activities.

Pro Tip: Provide flexible payment options (cash, credit, bank transfer) to accommodate parents’ preferences.

Step 8: Market Your In-Home Daycare

Once your daycare is licensed, it’s time to attract clients. Use a mix of online and offline strategies to market your business effectively.

Marketing Strategies:

• Word of Mouth: Ask friends, family, and satisfied clients for referrals. Offer an incentive for each successful referral.
• Social Media: Create profiles on social platforms like Facebook and Instagram to reach parents in your community. Share photos, testimonials, and updates.
• Local Advertising: Post flyers in community centers, libraries, and pediatrician offices. Attend local events to network with families.
• Website: Set up a simple website with your services, pricing, photos, and contact information to make it easy for parents to find you online.

Pro Tip: Highlight your licensing and training in all marketing materials, as this builds trust and reassures parents about the quality of your daycare. Learning how to start a licensed in-home daycare and market it will determine your venture success.

Step 9: Maintain Compliance and Regularly Review Policies

Once your daycare is running, staying compliant with state regulations is crucial. Conduct regular reviews of your policies and update your training as needed.

Maintaining Compliance:

• Annual Inspections: Most states require yearly inspections to renew your license. Keep your daycare space organized and well-maintained.
• Renew Certifications: Renew CPR, first aid, and any required childcare certifications according to state requirements.
• Stay Updated on Regulations: Regulations may change, so regularly check with your licensing agency for updates.

Pro Tip: Document all certifications, inspections, and policy updates to ensure everything is in place for license renewals.

Cost Breakdown Examples

Startup costs for a licensed in-home daycare vary depending on location, regulations, and the number of children you plan to care for. Below are two example scenarios to help you estimate expenses.

Small Setup (3–4 Children)
Designed for providers starting on a modest scale with limited capacity.

• Licensing And Permits: $200–$600
• CPR/First Aid Training: $100–$300
• Insurance (Annual): $500–$1,000
• Safety Equipment (gates, locks, fire extinguisher): $200–$400
• Toys And Learning Materials: $300–$600
• Furniture (cribs, mats, child-sized chairs): $400–$800
• Marketing (flyers, simple website): $100–$300
  Estimated Total: $1,800–$4,000

Larger Setup (8–10 Children)
For providers who want to maximize licensed capacity and invest in more structured operations.

• Licensing And Permits: $400–$1,000
• CPR/First Aid Training (multiple staff): $200–$600
• Insurance (Annual): $800–$2,000
• Safety Equipment (additional childproofing, fencing for outdoor play): $500–$1,200
• Toys And Learning Materials: $700–$1,500
• Furniture (cribs, cots, tables, shelving): $1,000–$2,500
• Food Service And Supplies: $300–$600
• Marketing (website, local ads, childcare directories): $300–$700
  Estimated Total: $4,200–$10,000

Key Insight: If you want to know how to start a licensed in-home daycare, you better try to start small first, it keeps costs low and allows you to learn the business before scaling. However, operating closer to maximum capacity can generate higher profitability once fixed costs like insurance and licensing are covered.

Profitability Examples For In-Home Daycare

*Expenses include food, supplies, utilities, insurance, and ongoing replacements of toys/materials.

Insight: Even at a smaller scale, when looking for an answer on how to start a licensed in-home daycare, you need to know that running a licensed in-home daycare can generate a healthy profit once licensing and startup costs are covered. At higher capacity, profitability improves significantly, but it also comes with more responsibility, stricter compliance, and potentially additional staff.

FAQ: How To Start A Licensed In-Home Daycare

What is the first step in learning how to start a licensed in-home daycare?
The first step is to research your state or local licensing requirements. Every region has its own rules about safety standards, caregiver qualifications, and maximum child-to-staff ratios. Understanding the regulations ensures that your daycare will meet compliance from the start.

Do I need special training or certifications to run an in-home daycare?
Yes, most states require some level of training such as CPR, first aid, and childcare safety courses. In some cases, additional early childhood education credits may be needed. Even if not required, pursuing certifications can increase parent trust and credibility.

How much does it cost to start a licensed in-home daycare?
Startup costs vary but typically include licensing fees, insurance, safety equipment, toys, learning materials, and marketing. Costs can range from a few hundred to several thousand dollars depending on the number of children you plan to serve and your home’s setup.

Do I need to make changes to my home before opening?
Often yes. Licensing usually requires childproofing your space, adding fire safety equipment, creating designated play and nap areas, and ensuring outdoor play areas are safe. Inspectors will check your home before granting a license.

How many children can I care for in a licensed in-home daycare?
The number depends on state rules, your home size, and the number of qualified adults available. Many states limit in-home daycares to 6–12 children, with specific ratios for infants, toddlers, and older kids.

What kind of insurance do I need?
Most providers need liability insurance to cover accidents and injuries. Some states require proof of coverage before issuing a license. Additional policies like property insurance or workers’ compensation may be needed if you hire staff.

How do I attract families to my in-home daycare?
Effective strategies include creating a professional website, listing your daycare on childcare directories, networking in local parenting groups, and asking satisfied parents for referrals. Word of mouth is often the strongest driver of new enrollments.

Is running an in-home daycare profitable?
Yes, many providers build profitable businesses, but earnings depend on local demand, pricing, and operational costs. Profitability improves when you manage expenses, set competitive rates, and maintain steady enrollment throughout the year.

What ongoing responsibilities come with running a licensed in-home daycare?
Beyond daily childcare, providers must maintain records, stay updated on licensing renewals, continue training, and pass regular inspections. Strong organization and compliance are key to running smoothly long-term.

Conclusion

How to start a licensed in-home daycare requires planning, organization, and adherence to state regulations, but it can be a rewarding way to earn an income while providing essential care for children in your community. By following these steps—researching licensing requirements, developing a business plan, preparing your home, setting policies, and marketing effectively—you’ll be well on your way to running a successful, licensed in-home daycare.