Are you interested in opening a daycare?

While it can be a fulfilling career choice for any parent, running one can be extremely overwhelming, especially if you’re just starting.

What might be the most daunting, though, is budgeting for it.

Below are a few financial aspects to consider before opening a daycare:

Research Rent or Buying Conditions

If you’re not going to run a daycare in your home, you have to consider rent or property fees.

Keep in mind that a daycare in a good location is important, but this can also mean that your fees could be a bit higher due to such a good spot.

You’ll likely be paying about $20 per square foot per month for those planning to rent. You’ll also need to have some funds set aside for facility fees.

Purchasing a building will be much more expensive and be as high as $100,000.

You can usually pay this in increments, but keep in mind that there might be interest, which can also add up. You’ll also need to be prepared to pay additional taxes.

On the other hand, if you want to open a home daycare, you won’t necessarily have building fees to pay but will need to look at paying extra for electricity and water bills.

Understand the Necessary Licenses and Permits

Daycare licenses and permits can be shockingly pricey, even if you are a parent looking to run a daycare in your home.

While the fees will vary depending on your location, in most cases, it will be anywhere from $100-$300.

Besides this, you’ll need to invest in training.

Most states require you to undergo a training course to understand emergency preparedness, medication safety, recognition of child neglect, and food allergic reactions.

Once you pass this, you’ll need to pass a background check before applying and successfully getting a daycare license.

Brainstorm How Much Supplies You’ll Need

Daycares need plenty of equipment to run smoothly and to keep kids entertained.

Some things you’ll likely need include:

• Tables, desks, and chairs
• Gates
• Plates, silverware, and cups
• Toys
• Crayons, paper, ink, printers
• Blankets

These might be basic things, but their expenses, especially furniture and electronic devices, can add up.

You’ll also want to keep in mind that some things (like toys) may need to be replaced every so often, so it’s good to have some money set aside for that.

Get an Insurance Quote

Daycares are typically legally required to have some sort of insurance.

This is usually general liability which gives you basic coverage over things like property damage and employee injuries.

You could also opt for professional liability (also known as errors and omissions), which will cover you for more intricate issues, like a paperwork mistake or child injury due to negligence.

If you plan to hire employees, you’ll need to get workers’ compensation which provides financial assistance for them should something happen on the job and also protects you should this happen.

While some insurance form is necessary, always search around before you officially purchase a policy.

This way, you’ll better understand what’s available and fits your budget.

Many providers offer an online quote. With this general liability cost estimator, you’ll just need to add a bit of information (like how many employees you have or if you have a claims history), and you’ll get an instant quote.

If you prefer to talk one-on-one with someone, you could also call your provider to speak with an agent who will be happy to chat.

This can often be a good option if you have questions the online quote doesn’t answer.

Consider Advertising Fees

Another thing to contemplate is marketing. This will help get the word out about your new business and show people why they should choose your daycare.

A lot of times, you can do simple social media marketing yourself. With social media accounts, you can post videos, photos, and reels of your space.

This can give potential clients an idea of your services and the overall vibe of the place. You can also interact with people, which makes your business seem more personable.

While you can use basic social media options, you can sometimes purchase extra features (like a boost setting that sends your posts to your targeted demographic).

Depending on your needs, this can range anywhere from $10-$20.

Set Aside for Employee Salaries

You’ll also want to figure out how much you’ll pay employees if you plan to hire some.

In most cases, you’ll need to pay the minimum wage, which is around $15 per hour.

However, this salary might be lower or higher depending on the position and skills you want. On average, though, look to spend about $20,000 per year on a worker’s salary.

Conclusion

Whether or not you want to open a full-fledged daycare or operate one in your home, opening a daycare can be expensive.

This can be extremely overwhelming for business-minded parents, especially if it’s your first venture.

With these tips, though, you can better prepare for what costs might be ahead so you can run a successful business.