How Much Does It Cost To Start a Daycare Center

Do you like taking care of and educating children? Well, you could turn your love for kids into a business! That is, by opening a daycare center.

Before the fun, though, you’d have to take into account a lot of considerations. Starting a daycare center is no mean feat and requires a lot of dedication. Most of all, you’d have to spend a considerable amount of money.

With that said, just how much is the cost to start a daycare center? Read on to find out.

Average Cost to Start a Daycare Center

How Much Does It Cost To Start a Daycare Center

The average cost to open a daycare varies depending on the type of center you’re establishing:

  • Home daycare. According to Street Directory, you would spend as much as $5,000 if you’re operating from your house. The exact price depends on the remodeling of your space, cost of supplies, and licensing fees.
  • Commercial daycare center. Expect to spend around $100,000 on start-up costs if you intend to operate in an independent business location.

Aside from your preferred type, the cost to start a daycare center is influenced by the following:

  • Preferred age group
  • Curriculum and activities for the children
  • Experience and qualifications of staff
  • The regulations in your state regarding child care

Cost Breakdown

The major expenses that make up the cost to open a daycare include:

  • Rental of facility and remodeling
  • Equipment and supplies
  • Staff costs
  • Pre-opening expenses
  • Marketing

Rental

Your choice of facility is crucial in starting a daycare center. It’s because the location is included in the licensing requirements of your state. Generally, you are required to have at least 25 square feet of space per child indoors. Outdoors, there should be 75 square feet per kid.

Most owners would prefer renting a facility (if it’s not a home daycare). The rental cost would depend on the size of your center and state regulations.

For instance, the mandate in Illinois is 35 square feet per child for facilities admitting kids aged 2 years and above. If you’re accepting ten children, the interior’s area size should be 350 square feet. If the rent is $20 per square foot, you would pay $7,000 monthly.

Remodeling

After choosing a facility, make sure it’s fit for child learning and play. Also, equipment and furnishings should be safe and clean.

The exact remodeling cost would depend on how much improvement your location needs.

Equipment

Some equipment that you would need for your daycare center includes:

  • Safety equipment (such as gates and outlet guards)
  • Playground equipment
  • Special needs equipment

You should also purchase tables and small chairs. If you’d be admitting infants, you should also invest in cribs.

A simple business plan has the following budget for equipment:

  • Playground equipment: $3,500
  • Playground fence: $3,000
  • Furnishings: $7,500

Supplies

To complete the furnishing of your daycare center, you should purchase the following:

  • Toys
  • Arts and craft supplies
  • Eating supplies
  • Books
  • Cleaning supplies
  • Diapering supplies
  • First aid supplies

For an idea of costs, here is a sample budget allocation:

  • Activity supplies: $250
  • Food preparation supplies: $300
  • First aid supplies: $200
  • Cleaning supplies: $150
  • Nap time bedding: $250

The number of items you need for your daycare depends on how many children you would admit. The variety of items, on the other hand, should fit the age of the kids. For instance, infants should not play with tiny toys as they could accidentally swallow some of its parts.

Daycare Staff

Running a daycare center is labor-intensive. That is especially true if you’re operating in an independent business location and you want more kids to come. There is a required staff-to-child ratio you should adhere to.

For instance, daycares in North Carolina is required by local regulations to set a ratio for each age group:

  • Infants: 1:3
  • Toddlers: 1:4
  • 2 years old: 1:5
  • 3 years old: 1:8
  • 4 years old: 1:9
  • 5 years old: 1:9
  • 6 years and older: 1:11

This ratio would help a child care center achieve national accreditation. There are larger ratios but nothing is more than 1:25.

Staff Costs

The national estimate wages for child care workers in the US ranges from $8 to $15 per hour. Based on these figures, you would have to pay your staff $280 to $525 for 35 hours of work weekly.

So how much would it cost to pay the whole staff? If you’d follow the required ratio in North Carolina, you would pay 3 teachers for 24 3-year-old children. That means you’d have to allocate $840 to $1,575 on labor costs weekly.

Pre-opening Expenses

Before you could open your daycare center, you’d have to obtain a license. Licensing fees vary depending on your location. For instance, the Department of Learning (DEL) in Washington charges the following:

  • Family home child care: $30 per year
  • Childcare centers:
  • $125 per year for the first 12 children
  • $12 per year for each child after the first 12

You would also have to prepare a budget for legal fees and insurance as protection for your business. Expect to spend around $1,500 or more for each.

Marketing

You’d have to promote your daycare for parents to enroll their children into your center. Brochures and pamphlets could do the job for $500. You could also opt for other advertising media such as TV commercials, radio plugs, and print ads.

For a wider scope, you could launch a website. A professional developer would cost around $3,000 and up. Though expensive, owning a site is the fastest way for customers to know about your company.

Additional Costs

Average Cost to Start a Daycare Center

Based on sample business plans and tips on starting a daycare, these are additional start-up costs you should prepare for:

  • Consultant (if you’re not sure about some things related to the business)
  • Research and development (to determine if it’s feasible to start a daycare in your location and keep it running)
  • Stationery
  • Food for the kids
  • Staff training weeks before the daycare center launch

The cost to open a daycare would be much higher the larger your operation. Regardless, running a place for kids is a choice many business owners make out of compassion. If you want to contribute to the growth of the next generation, then by all means, plan your child care center now!

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