Starting a Child Care Center

Make a Business Plan and Find Location

Having a plan for your business that considers your business model, budgeting, taxes, insurance, and recordkeeping is important.

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Child care centers can operate as either nonprofits, private businesses, or a franchise. Each business model has its strengths and weaknesses, and one may be more suitable for your specific situation.


A nonprofit corporation’s purpose and activities must serve the organization’s mission to benefit the public, and may not be operated to profit other persons or entities.

Private Businesses

Private businesses, also known as for-profit child care, can be organized in many ways depending on their size, structure and personal preference.


If you want to go into business for yourself but don’t want to start from scratch, buying an existing child care business or opening a franchise can be an appealing option.

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You will need to have a budget and a way to track your income and your expenses. Use Google Sheets, Excel, Apple Numbers, Quickbooks or whatever you find most useful.

Budgeting Template

Preparing a budget will help you figure out your expected expenses and if your projected profit will cover them. You will need to think about how many children you plan to serve, tuition fees, staffing costs, startup costs, equipment, materials, marketing, and other items you may need to purchase before your child care center is even open.

Business Taxes

You will need to file business income tax information with local, state, and federal agencies unless your business is tax-exempt. You may want to consult with a tax professional, such as an accountant or a lawyer that specializes in business practices, to help you.

Business Insurance

Insurance protects you if an accident, injury, or natural disaster occurs. Your Navigator or child care licensor will be able to help you think through some considerations.

Business consulting is also available from First Children’s Finance.

Evaluating Your Needs

Before you build, purchase, or rent a space for your child care business, it’s important to assess your needs. This information can help you think about the best location for your child care business.

You will need a location with a valid mailing address before you submit your child care center application. If this information is missing, the application cannot be processed.