Deciding to start a childcare center is the very tip of an iceberg that can sink your hopes and plans if you don’t have a solid plan in place. Whether you begin with childcare in your home or decide to create a free-standing facility, there is a generally defined pathway from making your decision to opening your doors.
There is high demand for quality childcare. If you cannot provide that quality, you may not attract the demographic and revenue you hope. Follow these tips for starting a childcare center, and the quality will follow.
Get educated
Professional education and training is the starting point for any career in child development and starting a business.
- A degree in early childhood development provides the foundation for your business.
- Business courses help you learn budgeting, business planning, and other aspects of operating a company you may not be familiar with.
- Safety certifications such as CPR and first aid are sure to be on the list of requirements for opening your childcare facility.
Learn from other small business owners by joining a networking group where you can share information about daily operations, marketing, and financial planning from others who have gone before you.
Later, you can pay it forward as you gain enough experience to pass along to the next new businessperson.
Research licensing requirements
Childcare licensing is regulated at the state level. In some regions, there may also be local requirements to meet. Identify the zoning requirements for a childcare business before purchasing a building or outfitting your home.
- Search for childcare licensing [your state] to find the proper department to contact for the correct guidelines and regulations.
- Local childcare licensing agency websites may also prove helpful.
- Requirements can include CPR certification, clear driving record, and other safety-related conditions.
- Expect an inspection before you open to ensure you meet all legal and safety specifications.
The local Social and Rehabilitation Service, Department of Human Services, Child Safety Department, or Department of Children and Family conducts the initial inspection and then periodic inspections to learn if your facility maintains compliance.
Planning and financing
Before you can begin planning, you need to decide what type of facility you want to operate. A home-based childcare center is not the same as a larger free-standing facility or a franchise.
- Create a business plan that includes your goals and how you plan to reach them.
- The business plan has an executive summary, a business description, operations and marketing information, an employee section, and financial statements.
- Your business plan will guide your budget from identifying everything you need to purchase or lease to the amount you need to charge to generate revenue.
If you expect to apply for a business loan, the lender likely will require a business plan as part of the application process. You will also have an employee policy started that you can complete before hiring help.
Running a childcare business may net you some tax credits. The government allows tax deductions for specific business purposes, including using your house as an in-home childcare facility. Grants may be available as well to help defray startup costs and provide additional education in childcare development.
Create contracts
To guarantee both you and your customers are treated fairly, develop a contract for parents to sign before you care for their children. A contract is a legally binding document that says what you will and won’t provide and your expectations for your relationship with each client.
- The contract should include drop-off and pick-up times, any fees or penalties for being late, the services you will provide (such as meals) and how payment will be handled.
- Consult a business attorney that specializes in childcare businesses to help you develop the contract.
- Never work without a signed contractual agreement that spells out everything so you won’t get into legal hot water.
The contract specifies tuition, fees, days and hours of care, and other details of the business. You may even have a clause that specifies how long the parents agree to use your service with an appropriate escape clause to provide a guaranteed revenue stream for that period.
Marketing
Nobody can open a business and just expect people to show up. It could happen but maybe not fast enough to keep you afloat. As a small business person, you need to learn some marketing savvy to differentiate yourself from your competitors and build awareness of your services.
What makes you stand out from the pack? Are you using special educational techniques or will you cater to a specific demographic? Decide now so you can target your marketing accordingly.
- All businesses should have a website. It can be a bare-bones site that has your contact information and tuition, or you can add functionality like online enrollment, downloadable forms, and details about the various activities available.
- Use social media to promote your business, including discounts for the first month of tuition and announcements of special events.
- Build an email list from website visitors to keep them in the loop about various developments in your facility. A monthly newsletter for prospective parents keeps your business in front of them until they are ready to sign with you.
- Inexpensive print advertising may be appropriate. Design and print fliers to hang on bulletin boards, leave at pediatrician offices, and distribute elsewhere. You have a local business; the locals need to know about it.
Monitor the success of your various marketing efforts. You need to know what is working and what needs to be tweaked or discontinued. You have a limited budget and less time. Only do as much as you can track, so you don't waste money and effort.
Get feedback from parents, too, to learn where you need to improve or add to your services and find out about issues before they grow. Ask teachers for feedback as well so you can provide them with the materials and space they need. An experienced teacher can help you grow your business by bringing other ideas to the table.
Remain professional
You love kids, or you wouldn't be opening a childcare center, but no matter how adorable your little children are, they will leave you. Parents will change jobs or move, kids move on to elementary school, or things just don't work out.
Don't become too attached to the kids you have now and be prepared for a few bad days now and again. If you have done your marketing right, new kids will follow on the graduating class's heels, and you will always have little ones around.
Use childcare management software
Childcare management software is one of the most valuable tools you can purchase. The right software solution can automate many of your repetitive tasks like billing and payment processing.
Allowing parents to check in and out digitally mitigates the need to print and sign attendance sheets every morning. You can even provide a parent portal so your clients can access forms, look at video and pay online.
Starting a childcare center takes perseverance and patience, both requirements for a successful teacher or childcare professional. Educate yourself about both child development and business. Plan carefully and find out how you can comply with every regulation. Then continue to learn how you can improve your services so it will grow and survive for a long time.
