How to Start Your Own Pre School (Learn How to Open a Daycare for Kids)

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Preschools are one of the lucrative business opportunities currently. There are different types of kids’ daycares available today. Some are meant for specially-abled children, some are based on creative aspects, and some are from home while some look like business.  If you got the vision or if you see a need for a preschool, this is a great time to open one and earn a living.

Preschools are a super effective way to help kids achieve their true potential. However, children are the most difficult humankind to understand and work with. It is an arduous task to start and run daycare. From right information to the right care management, everything will contribute to your success. If you are ready, we are ready too to guide you with the right steps to start a pre-school.

Steps to Start a Kids’ Day care

There are majorly two ways to run a preschool business. If you have a child of your own and want to work from home, you may consider a home-based daycare business. On the other hand, if you choose to care for more children then you should consider an independent center for your business.

Step 1: Find Out if there is a Need for a Preschool

Before you plan your business and do the legal formalities, you need to find out if there’s a need for child-daycare in your community or locality. You have to research the market thoroughly to find out.

First, identify how many daycares are around your community. Parents do not prefer sending their 2-year-olds too far from their homes. Ensure you have minimum competition around.

Find out if they are running on a profit. You need customers for your business. Here, your main customers are toddlers. Look at the census data in order to find the number of potential customers, such as number of recent marriages, a number of families with children aged 0 – 3 years, income of the families, and the number of working parents.

You will get the information from your local municipal government or state’s census bureau.

Your next step should be talking and interviewing families in your community. Ask them the kind of play schools or specific childcare needs they would prefer. Find out whether the type of service is already provided in the locality. If not that should be your key selling point and your primary service.

Step 2: Your Business Plan

Any start-up business is processed based on a perfect business plan. The more comprehensive and accurate your business plan is, the easier will your journey be. Once you have identified the specific need for a preschool in your locality, it is time for you to write your business plan down. Writing a business plan is a big task. You may have to put in a lot of effort and time to develop one. A traditional plan includes a lot of headings and points, most suitable for obtaining a business bank loan. You should opt for it if you plan to open a big daycare center.

On the other hand, a lean business plan outlines the important elements of a business, such as the finance, business projection, and marketing plan. It works as a reference point for your company. However, it will not aid lenders or bankers to understand why they should lend money to your start-up.

Some of the key elements you have to work on for your business plan include:

  • Current market
  • Potential customer
  • Services you offer
  • Location
  • Start-up capital
  • Funding options
  • On-going budget
  • Business vision and goals
  • Mission statement
  • Financial strategy and projection
  • Marketing strategy and projection
  • Staffing

Step 3: Decide Your Business Type

Location and Setting

Although the types are many, the forms are only two, namely a home-based business and a center-based business. Your chosen business type will determine your budget, legal formalities, growth, marketing etc.

If you are tight on budget and have access to very limited resources, a home-based daycare business should benefit you more. Home based business generally has fewer expenses, lower overhead costs, convenience, and flexibility. Legal formalities are also not as strict. If you have a child of your own, other parents will feel more comfortable sending their toddlers to you. However, you would need the kind of space and atmosphere inside your home where children can play and get entertained.

Although center based businesses are expensive to establish and run, they provide an opportunity to grow and earn more. You also get more space for children’s activity.

Kind of Business Service

Next step is deciding the type of service you want to offer or the kind of childcare you want to operate. Remember you had interviewed local parents for their opinions and preferences? The interview report and your motivation should determine your offered service. Some of the ideas of child day care businesses include:

  • Faith and culture based care
  • Care center to reinforce  or build skills
  • Learning environment
  • Care center for differently-abled children
  • Parents and children bonding care center
  • Or just a normal play school where children come, play and participate in creative activities

Your choices will decide the area needed for the play school, the skills required to manage the children, the budget needed, and other stuff, such as ambiance, toys, activities etc. to run the school effectively.

Step 4: Form Your Business Legally

In this section, we will focus on steps need to be accomplished to make business official.

Business Name: Choose a cute, endearing, and attractive name for your business. Look up the secretary state’s office to ensure that your proposed name is not already taken by a competitor. Your name should represent your services and should indicate your business type. Examples include: “Nini’s Home-Mummy Care”, “Advanced Preschool for Special Child”, “Jhoola – Activities Based School”…

Business Structure: You have to form your business structure and register your business accordingly. Your choices include Partnership, Sole Proprietorship, LLC and Corporation. Speak to your attorney in order to get a good understanding of the different business structures, their pros and cons, and their tax obligations.

Insurance: Once you have registered your business, you should focus on buying a great insurance policy to protect your personal assets, lest your business faces legal issues. Depending upon the size, services, and type of your school, the number of insurance coverages will vary. Some of the common ones are liability insurance, property insurance, business insurance, and workers’ compensation insurance.

Licenses and Permits: Each country or state requires business owners to obtain different licenses and permits, building codes, and occupancy laws to run the business. The numbers and types vary from state to state and business to business. Find out from your state authorities what you must meet to run a child daycare business legally.

Business Account: Apply for an EIN (Employee Identification Number) from your state’s IRS and then open a business checking account. EIN is mandatory for opening a bank account and hiring employees.

Tax Compliance: Depending on your business structure, you will face differing tax obligations and laws. Since taxing is a complex subject, we recommend you to hire a tax specialist and an accountant to help you comply with the tax laws and accounting procedures.

Step 5: Fund Your Business

You cannot run your daycare without proper amenities and facilities for the kids. And, for the right infrastructure, you need funds. In order to gather funds, you have to plan a budget for the next 8 months and work towards it. Start-up expenses, fixed and recurring expenses, annual expenses and other monthly operational expenses must be calculated.

Doing so will help you plan for your future and look for the right funding options. Once you have planned your budget, you will have to apply for loans to gather capital. If your budget is small, you could use your savings account or request your family and relatives to contribute.

For a bigger business plan, you could use one of the following financial aids: Bank loans, Community Loans, Credit Unions, SBA, Crowdfunding, and Angel funding (if you are starting the business for a special cause).

Step 6: Choose Your Day care Centre

If you are going to operate this business from your home, you can omit this step. However, if you plan to run the preschool independently, you need to choose a good location – affordable and profitable. Managing kids below 2 years is a sensitive task. Therefore, choose a location that is very near to a residential society and that is safe.

Safety and convenience should top your chart. Transportation services in location, space, play area, kitchen, and lavatory, and of course hygiene are few other factors that should not be overlooked either.

Depending upon your available fund and your business growth plan, you will need to consider whether to buy, rent, or lease the property.

Meet with the Obligations

Contact your zoning office to find out if the proposed location adheres to the zoning laws. As in, find out if chosen place and area can be used for preschool.

You should also prepare your proposed daycare center for inspection. To pass the inspection in the first attempt, make sure you install cabinets with locks, set tables, chairs, and mats for toddlers to play around, put up smoke detectors, connect proper drainage and electricity system, and plan for emergency evacuation.

Some of the inspection that you have to schedule, to ensure that you are legally eligible to run a play school are health and hygiene inspection, environmental inspection, and fire safety inspection.


Step 7:  Purchase Equipment and Amenities

Based on your childcare business type, you will have to buy your equipment and other entertainment supplies for children. Children of different ages have different likes, dislikes, and needs. Based on their age group, you will have to buy the equipment and provisions.

Here is a list of common supplies that goes inside an effective children’s daycare:

  • Table, chairs, desks, writing board
  • Stationeries – pencils, paper, notebook, safety scissors, glue, color pens and crayons, clipboards, etc.
  • Books – lots of storybooks, encyclopedia, activity books, etc.
  • Kid’s Activities – Toys, games, Legos, building blocks, workbooks, clays, miniatures etc.
  • Cabinets, storage containers, cushions, beds, etc.
  • Meals, snacks, drinks.
  • Outdoor games, such as swings, slides, see-saw, merry-go-round, etc.

Step 8: Choose Your Management Staff

Your last process step in the action plan that completes your daycare should be hiring staffs. You may (or may not) need to hire staffs for your daycare. However, we recommend that you appoint at least one assistant to help you manage the nitty-gritty of business. If your daycare facility is going to be huge, you will need to hire more staffs.

Try to find candidates who have the following attributes:

  • Previous experience in working with children (babysitters, nannies, teachers, counselors etc.)
  • Caring and nurturing nature.
  • Pleasant behavior.
  • Is wise at stress management.
  • Is friendly with kids.
  • Certification course or education qualification in child care, child education, and child development.
  • Good managerial and communication skills

Experience in first-aid treatment and other medical know-how is definitely an added advantage. You may also have to do some background check on your employees to make sure they do not have any state or federal criminal histories, such as involvement in child abuse or child trafficking.

Step 9: Market Your Business

Your business will thrive in 2019 and henceforward only if you have a successful and comprehensive marketing strategy in place. Comprehensive means using all possible means to promote your business. You cannot do it all by yourself and you definitely cannot ignore this either.

Therefore, hire an exclusive online/offline marketing expert for your business and brand identity development. Some of the highly recommended marketing and advertising mediums for children’s daycare include flyers, brochures, newspaper ads, direct marketing, website and blogs, Facebook, Twitter, and Instagram marketing, and pay per click and video marketing.

If you follow these steps one by one, by the end of it you will definitely have a strong sense of the business and its operations. Hope we are able to help you in your new venture. For further inquiries, please comment your questions below.