Setting Up a Daycare Business – Start-Up Costs

The costs associated with setting up a daycare business can range from only a few thousand dollars up to hundreds of thousands of dollars. Let’s have a look at some of the startup costs that you will most likely come up against if you open your own child care center.

1) Location – The main concern when it comes to startup expenses is whether you start a home-based daycare or rent commercial premises. It is possible to run an extremely efficient business by using your home although you will be sacrificing large parts of your family’s living space. There is however refurbishment costs associated with turning part of your home into a daycare environment that is suitable for children.

2) Licensing, Safety and Compliance Costs – Fire safety equipment such as extinguishers and alarms must be installed, first aid kits must be purchased and the daycare area must be fenced to keep children within a safe play zone. Business licenses and permits will also add on to initial costs.

3) Equipment – To make your daycare marketable you have to turn it into a child friendly environment. Suitable furniture and decorations are needed to create visually stimulating surroundings and you will also need play structures, toys, books, posters and art and craft supplies. Remember to always go with quality as children typically wear things out faster than adults.

4) Administrative area – You will have set up a small area that can be used as an office. Costs here may include stationery, phone line connection and Internet connection.

5) Operating Costs – Some business plans also include operating costs for the first two or three months of business when they calculate startup costs. This is sensible as it may be several months before the business has revenue coming in.

6) Business Launch – Expenses associated with promoting the daycare will include branding (logo design), advertising costs (campaigns should start months before opening day) and expenses associated with throwing an opening party.

It is important to show some restraint as you set up the business and prevent startup costs from getting completely out of control. But at the same time you need to have spent enough by opening day that you are looking fully organized and professional with a set up that attracts families to your services. Carefully budgeting for your daycare business startup costs will go a long way to determining your level of success in the first few months of your businesses life.