Can I start a daycare from home?

Yes, a home-based daycare is the most affordable way to enter the childcare industry, with typical startup costs between $10,000 and $50,000. You will still need a state daycare license, background checks, and to meet health and safety requirements, but the licensing process is usually simpler and capacity limits are lower (typically 6-12 children depending on your state). The biggest advantages are eliminating commercial rent and reducing renovation costs, since you are adapting existing living space. The tradeoffs include limited growth potential, mixing your personal and professional life, and stricter zoning restrictions in some neighborhoods.

What licenses and certifications do I need?

Every state requires a daycare license or registration, which involves an application, facility inspection, and meeting specific health, safety, and space requirements. All staff must pass FBI fingerprint-based background checks and state criminal history checks, and many states also require child abuse registry screenings. Pediatric CPR and First Aid certification is universally required for all caregivers and must be renewed every one to two years. You will also need to meet mandatory staff-to-child ratios, which vary by state and age group but typically range from 1:4 for infants to 1:10 for preschoolers. Some states require a minimum number of training hours annually for all childcare workers.

How many staff do I need?

Staffing levels are dictated by state-mandated staff-to-child ratios, which are the single biggest driver of your ongoing labor costs. Typical ratios are 1:4 for infants (0-12 months), 1:6 for toddlers (1-3 years), and 1:10 for preschoolers (3-5 years), though these vary by state. A small center with 20 mixed-age children might need 4-6 caregivers on the floor at any given time, plus a director. Factor in coverage for breaks, sick days, and vacations, which usually means hiring 1-2 additional part-time staff beyond your minimum ratio requirements. Staff wages typically represent 60-70% of a daycare's total operating budget.

What insurance does a daycare need?

General liability insurance is the baseline, covering slip-and-fall accidents and property damage claims, but the most critical coverage for a daycare is professional liability with abuse and molestation protection. This specialized coverage protects your business against allegations of negligence, improper supervision, or misconduct, and most licensing agencies and landlords require it. Workers' compensation insurance is legally required in most states once you hire employees and covers staff injuries on the job. Property insurance protects your equipment, furniture, and supplies, and is especially important if you have invested heavily in playground equipment and learning materials.

How much should I charge per child?

Weekly tuition rates for full-time care typically range from $200 to $400 per child, with infant care commanding the highest rates due to lower staff-to-child ratios. In high-cost metro areas like San Francisco, New York, or Boston, weekly rates can exceed $500-$600 per child. Most daycares also charge a one-time registration or enrollment fee of $50-$200. To build a sustainable revenue model, calculate your total monthly expenses and divide by your target enrollment at 80% capacity, since you will rarely maintain 100% enrollment year-round. Offering tiered pricing for part-time, full-time, and drop-in care can help maximize your facility utilization and revenue.

How long does it take to fill enrollment?

Most new daycares take 3 to 6 months to reach full enrollment, though this varies significantly by location and demand. In high-demand urban and suburban areas with long childcare waitlists, you may fill up within weeks of opening. Start marketing and collecting waitlist signups at least 2-3 months before your opening date, and consider offering early-bird enrollment discounts to secure your first families. Hosting open house events, partnering with local pediatricians and real estate agents, and maintaining an active social media presence are the most effective marketing strategies for new daycares. Word-of-mouth referrals from satisfied parents become your strongest growth channel once you are established.

Home / Daycare Startup Costs

How Much Does It Cost to Start a Daycare?

$10,000 – $500,000

Starting a daycare can cost anywhere from $10,000 for a home-based operation to over $500,000 for a fully equipped commercial center. The biggest cost drivers are whether you run from home or lease a commercial space, state licensing and compliance requirements, and staffing levels dictated by mandatory staff-to-child ratios. Location, age groups served, and meal programs also significantly impact both startup and ongoing expenses.

Last updated Feb 2026 · Based on Child Care Aware of America — Childcare cost data (2024-2025), State childcare licensing requirements database, SBA small business lending data (2024-2025)

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Where This Data Comes From

Child Care Aware of America — Childcare cost data (2024-2025)
State childcare licensing requirements database
SBA small business lending data (2024-2025)
National Association for the Education of Young Children (NAEYC) standards

All figures are estimates based on publicly available data and industry benchmarks. Actual costs vary by location, timing, and business decisions.

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