Guest Post by Rosemarie Groner of The Busy Budgeter. Thank you Rosemarie!
When I was pregnant with my son, I had no intention of being a stay-at-home mom. But as soon as I met him, there was nothing I wanted more than to be home with him. While blogging has been a blessing that has made that possible, the other thing that really contributed to my ability to stay home, was running a daycare out of my home.
And I want to share this because there are so many benefits of why you should start an at-home daycare.
First of all, you get to work from home. That also means that, even though your work day will likely be 10 hours long, you’ll get to swap laundry, do dishes, and make meals during your working hours… and avoid a long commute.
Plus, depending on your current job, having a work-life balance is a lot easier when you work from home. After all, you can spend all day having quality time with your kids, not just an hour or two between dinner and bedtime, if you work a typical 9-5.
It’s also something that allows you to make a considerable amount of money, so you can not only thrive financially in the short-term, but also have the ability to bulk up your savings a to achieve your long-term goals, like buying a house, for instance.
There is nothing more fulfilling (and hard!) than getting to raise your kids, and it’s a blessing to be able to give that gift to another mom that needs help.
How To Start An At-Home Daycare Business
The best resource for starting an at-home daycare is a book called How To Start And Run a Home Daycare. It has literally everything you need to prepare for and take into account before you begin, and during your daily routine once you open.
It also gets straight to the point without any fluff, which is great when you don’t have a lot of time to read.
Starting a Home Daycare Checklist
Make sure it’s right for you
Starting an at-home daycare is an incredibly involved process, so it’s worth making sure this really is the job for you.
If you want to succeed, you should love kids, first and foremost. Having a house full of kids requires a lot of patience and genuine love. But believe me, after a short time, the kids you watch will become like your own.
You also need to make sure your husband is 100% on board with your plan as well. After all, if he has an unexpected day off, he’ll end up being a helping hand – and because he lives in the house, he’ll have to go through a lot of the same training’s and background checks as you. Don’t go into this without his full approval, or you’ll cause a lot of unnecessary marital strife.
Also, you should consider that kids = mess. Crayons on the walls, sticky floors, unidentifiable goop in the couches, that sort of thing. The extra kids will mean extra wear and tear on your house, which is something worth considering, especially if you’re in a rental.
If you feel comfortable with all these things, it’s time to move forward.
Determine the need in your area
Before you worry about licensing and insurance, you need to figure out what parents (your potential customers) need. What might people want in a daycare that isn’t out there currently or is in short supply?
Is it a daycare center that serves organic foods? One with a Montessori curriculum? One that offers overnight shifts? Whatever it is that you feel you might be able to fill, this will help set you apart from the competition.
The best way to determine your pricing is to find out the cost of local daycare centers in your area per age. The easiest way to find out what others are charging is to call around and ask them as if you were a prospective parent (which is also sometimes called espionage 🙂 ).
Then, compare their model to your own. For instance, if you plan to serve exclusively organic food to children, or if you plan to get extra training to offer a Montessori curriculum, you can charge a little more than a daycare that doesn’t feature those things. If not, or if you only want to have older kids, you might consider charging a little less.
It’s also important to make sure that there is a need for what you’re offering. In most places, there’s no shortage of need for a reliable daycare, but you want to be sure you’re not living in an area with an over-saturated market. And if you are, that may not mean you need to give up on running a daycare: you may just need to dial back your income expectations a bit.
Determine licensing and insurance requirements
Here’s where you get to see government bureaucracy in action. It’s not fun, but it’s an important part of the process if you want to do this legally (and avoid hefty fines in the future!)
Start by calling your state and telling them you want to start a home daycare and where you live. This varies so much from state to state that I can’t tell you exactly who to call, but if you call the general number for your state, they can put you in touch with the right people.
Depending on your state, you may need these requirements for home daycare:
- A business license
- A fire inspection
- A food handler’s permit
- CPR/first aid certification (a good idea regardless of requirements!)
- An inspection of your kitchen by the health department
- Emergency plans* (again, a good idea!)
You may be surprised by all the requirements you need to fulfill and how much time it will take. That’s why I recommend doing this very early in the process.
*Here are a couple free printables that can help you with putting together an emergency plan.
For liability insurance (and yes, you’ll absolutely want this), call at least 3 places and get a quote. If you plan to transport children in a personal vehicle, you may also consider calling your auto insurance provider to see if they recommend increasing coverage – and if so, how much it is.
Determine your business plan
You know the phrase, if you fail to plan, you plan to fail. It’s totally true in business.
You need to determine a few things before you get started:
- What documents/inspections do you need before you can get started?
- What’s your timeline for getting these things done?
- How many kids are allowed in your home by licensing restrictions?
- How many kids are you comfortable watching?
- How much will you charge?
- What will your expenses be?
- Note that you may need a separate budget for paper towels, because you’ll use more than you ever thought possible.
- What new toys will you need? (Here’s how to get toys free)
- What things are required by licensing? (For instance, we needed a commercial changing table before taking any kids on.)
- What policies are important to you?
- During what hours will you operate?
- How will you handle personal sick days? Do you have an assigned alternate person to take your place, if necessary?
- Will you serve lunch, or will you have kids bring their own? Does that remain the same if kids have allergies?
- How do you plan to store important documents for kids?
- Are there any days of the year you won’t be open, such as family holidays or vacations?
- How will you handle doing your own taxes?
- How much time will it take you to get everything ready?
- How much will you need to invest before you make a profit?
- Do you plan to do field trips with the kids?
- If so, how do you plan to handle child safety seats?
Write down the answers to these questions in a Word document or in a notebook, and if you don’t have the answers, do a little thinking/researching until you reach a conclusion you’re comfortable with.
There are a lot of factors that will go into this whole thing, and the more you plan ahead, the better prepared you will be… and that means you’ll be more successful.
Create a Business Budget
Based on what you determined in the previous section, you’ll need to create an actual business budget. Account for the income you expect to make, what expenses you expect to have, and how much you think it will cost to set up your actual daycare area.
As far as setting up the area for your daycare, don’t go nuts yet! Make it clean and inviting, but also understand that until you’re actually doing daycare, you won’t really know what you want and need.
Just get the things you need by licensing requirements, any pertinent childproofing equipment you don’t already have (especially if you plan to take in younger kids and your own kids are older), and a few new toys suitable for the age range you plan to bring in (and note that they certainly don’t need to be brand new – your local thrift store is a great resource for new toys!)
Also, don’t forget that being self-employed has its benefits: that is, there are a lot of things that are tax-deductible. When you purchase things for the daycare, be sure to save your receipts!
A great investment would be Quickbooks self-employed, which helps you track business mileage, allows you to scan receipts into an app on your phone so you don’t have to worry about losing them, and helps you remember what all you can deduct from your taxes. It’s $10/month (and again, is tax deductible, yay!)
This is where the book I mentioned above really comes in handy. You want your daycare contracts to spell out things like:
- Monthly cost
- When payments are due and any associated late fees
- Sick policies
- Penalties for late pick-up
- How disciplinary issues will be dealt with
From a legal perspective, the more you have in writing, the more expectations are laid out and on the table, the better. And from a business perspective, it just makes for a happier client-provider relationship if both parties know exactly what to expect from one another.
After all, they’re entrusting you with the most precious thing they own: their children. They want to know you’re taking that responsibility seriously.
Spread the word
Technically, this is called marketing. But all this really looks like is telling everyone you know about your at-home daycare and beginning to accept applications.
Some places you may consider letting people know:
- Social media
- Play groups
- Printing flyers for friends and family to bring to work with them
The best money I spent in this area was with a local blogger. As a result of advertising with her, I had 22 applications within a week (for 4 spots!)
I know this sounds overwhelming, but you can do this. Running an in-home daycare was extremely fulfilling work, and while hard, gave me the opportunity to spend my days with my kids. I hope this guide made this feel like more of a possibility for you if you’re looking for at-home work!
Rosemarie Groner is a formerly stressed, overworked, and exhausted mom who loves blogging almost as much as she loves brownies. She writes at The Busy Budgeter about how she used the free Ultimate Money Saving Workbook to reduce their spending enough to be able to quit her job, stay home with her kids, and then found ways to make up her salary at home. She’s still working on the cure for exhaustion.