Starting up any business comes with challenges, and opening a daycare center is no different. The startup costs associated with this venture will depend on where you live, because renting a property and paying employees tends to cost more in bigger cities as compared to other locations. For example, starting up a daycare center in New York City would cost a lot more than starting one in North Carolina.
Most estimates indicate that the startup cost ranges from $10,000 to $100,000. The good news is that such ventures are often profitable because parents are always seeking high quality and reputable daycare options for their infants, preschool and school-age children.
Examples of Costs for a Daycare Center –
The startup costs are going to vary hugely based on what type of daycare center you are starting. Some families may want to start a daycare center out of their home. In that case, a huge amount of the startup cost is no longer a factor – buying or renting out a location. Utilities, maintenance and tax expenses are also a lot lower if you are starting out a daycare center from your home.
The rent for a daycare center can vary depending on your location. And most states have regulations about how many square feet are necessary per child. For instance, your state may mandate that at least 100 square feet are allocated per child – 30 square feet inside and 100 square feet outside. So if you are hoping to enroll 20 children, you will need 600 square feet inside and 2000 square feet outside.
If you are renting out a separate daycare space, you must also consider electricity, water, phone, internet and other monthly utility expenses.
The size of the daycare center and its location pay a huge role in operational costs. For instance, running the daycare center out of your house means you may not need too many employees. Perhaps you will run a 10-child daycare center out of the house, which means you may need to pay two or three employees on top of yourself and any family members who are supporting this venture. A receptionist/administrative assistant is required, along with those who are going to deal with the children.
Do not forget expenses for furniture, utensils, safety/first-aid equipment, electronics and other items that will be used at the daycare center – or at your home. It may be a good idea to assess a few of the daycare centers in your area to see what type of equipment is used, as it will help you understand the total expenses in this area.
You will need to spread the word about your new venture. Depending on your neighborhood, and the size of your daycare center, advertising expenses may include flyers, business cards, paid ads on the radio, television and internet, a website and newspaper ads.
Each state has regulations about how to become a licensed childcare provider. Some states require you to take a class, pass an exam or go through other steps before obtaining the license. It is not wise to operate a daycare business, even out of your home, without the proper licenses.