By | Natasha Ramirez
Good childcare can be difficult to find, especially in the middle of a global pandemic. If you’re looking to start your own business, or are looking to make some extra cash with a side hustle, starting a daycare might be exactly what you’re looking for! Not only can you make money doing what you love (working with kids) but you will also be creating a much-needed service in your community.
Starting a high-quality daycare business is a time-consuming, messy, and frustrating business. But it can also be immensely rewarding. If you love children and want to start a profitable business around them, daycares are a great way to do exactly that.
Here are five things you can do to make your new daycare business as profitable as possible.
Figure Out Your Expenses
Have a solid idea of what your daily, monthly, and yearly expenses will look like. The start-up costs will vary by location, but if you’re starting from scratch, you’ll need:
- Toys
- Child-sized furniture
- Daycare insurance
- Child-friendly foods
- Building utilities
- Arts & crafts supplies
- Daycare scheduling software
- Hand sanitizer and cleaning supplies
Once you have those start-up costs decided, your monthly expenses should become more clear. Then, you can start to calculate the minimum amount you will need to charge per child to keep your daycare profitable. If you plan on bringing on staff, you will need to factor in salaries and employee benefits to your monthly expenses as well.
One of the first things you need to do is research the child care regulations in your area. This will determine how many children you’re allowed to take care of, what age range they need to be in, whether you’re allowed to feed them, and what types of licenses your area requires before opening. Not complying with these regulations could come with hefty consequences. It could make monetizing your business more difficult, and you could be charged large fees or even have the government shut down your center.
Look Into Tax Benefits
Running your own business can provide you lots of tax benefits. Especially if you’re running a home-based business, you can write-off costs like food, internet, and even substantial chunks of your mortgage. Make sure to keep a detailed log of all your expenses, both business and personal. Since your home and business are connected, it may be helpful to talk to a tax professional. They will make sure you’re writing-off the correct expenses so you’re secure from a tax perspective.
Put Effort Into Marketing
To operate a daycare, you obviously need children! And to get children signed up for your services, their parents need to know about you. Marketing can be time-intensive, but it’s necessary to grow your center. Hang up posters around town, start growing your social media accounts, set up booths at local events, and make sure your daycare center is listed on Google.
Word-of-mouth referrals are absolute gold in the parenting community. Parents with children near the same age gravitate to each other and love to share parenting tips and other advice (like their favorite daycares). Facebook groups and online parent forums are a great way to make yourself a part of that community. You can give parenting advice, share interesting articles, and comment on other parents’ posts. Try not to be too promotional—you want them to see you as a valuable resource before they decide to trust you with their children.
Provide Extra Services
If you’re renting a brick and mortar location instead of setting up your daycare in your home, you’re most likely letting it sit empty during the weekends. Try renting that space out for community events. You’ve already made the environment friendly and fun for children, so let your clients know your location can be rented for birthday parties, scout troops, and other child-focused events.
Taking care of children doesn’t have to be the only service you provide to your clients. Add-ons could also include hosting parent education nights, selling homemade children’s toys, or even taking family portraits!
Since you’ve already developed a relationship with your clients, they’re more likely to trust that your services will bring them value.
Keep a Rainy Day Fund
You won’t always have a full classroom of children. Parents decide to stay at home, families move, or people simply don’t want to pay for child care anymore. Some months might have thinner profit margins than others. But growing a business takes time and patience. Make sure you have enough money saved up to cover expenses during those lean times.
What About COVID-19?
If you’re looking to start a daycare business soon, you can’t ignore how COVID-19 has changed the child care industry. More than 50 percent of daycares closed because of the shelter-in-place orders and the rise in unemployment. Even though states are opening up and children are heading back to school, daycares are still struggling to recover. It will be even more of an uphill battle than in previous years, but the country needs high-quality child care, especially now.
The Bottom Line
Starting your own business is one of the most rewarding things you can do. If you have a passion for your work, it will show. And the work that you do at your daycare can impact those children for the rest of their lives. Creating a profitable daycare business will take a lot of hard work, but it’s 100 percent worth it!
