Starting your own daycare business might feel daunting, but with the right advice, it can also be the first step on the road to financial freedom. There are many resources to help you learn how to start a daycare and how to launch your new business successfully, some of which also make tax time much easier.
So, if you are asking yourself how do I start my own daycare in my home or a commercial facility, then read on to find your answers within this step-by-step process.
Successful businesses don’t often achieve success by accident; they usually thrive as the result of an excellent business plan. The very first part of your business plan for daycare facilities should detail who you are and what you intend to achieve, providing readers with a succinct overview of your intentions.
When creating a business plan for your daycare business, you should research your consumer base, in this case, parents looking for childcare solutions, and outline several marketing ideas. After that, you present how you will make your money from your consumer base, and how much money you expect to make within the first year, two years, or more. The most effective business plans are living documents, so they get updated with fresh information and new projections as entrepreneurs go along.
Don’t forget to identify how you will structure your business, as your business structure, whether a sole proprietorship, partnership, or corporation, will dictate your tax filing status. This is especially important for obtaining certain tax credits that can help you reduce your tax payments overall.
Choose the Location of your Child Care Business
Part of your daycare business plan should cover the location of your business. Will you operate your childcare services out of your own home or at another property on-location? There are advantages and disadvantages to both options.
Benefits of an in-house daycare include being able to stay home with your own young children, not having to commute to work and a more leisurely morning routine. Drawbacks might include making your entire home child-friendly and sacrificing family time when parents run late.
Advantages of a more spacious on-location daycare include the ability to host a larger number of children and potentially employing other people to help share the load. Possible disadvantages might include having to purchase the day care location, the commute, and more complex licensing laws.
Because you will be working with infants and small children, there are specific legal requirements you must meet when opening a daycare. Local laws vary from province to province, so you want to learn about the regulations in your area before you proceed. It is important to note that such licensing will also dictate the age range and number of children you can care for at any one time.
At the same time, you will also need to adhere to the proper health and safety regulations within your established child care centre. Since you will be handling the children’s food and drink, you will need a food handling certificate. This food handlers certification can be obtained through your municipality.
You can find further information on each province and its regulatory requirements for working with this vulnerable population below.
If you are planning on opening a daycare in Alberta that will provide childcare for seven or more children, then you will need a license. It is important to note that there are different processes for facility-based daycare services and home-based daycare services.
The Government of Alberta will only approve home-based day care if there is a need for these additional services; otherwise, they will only approve daycare facilities for licensing.
Opening a daycare in BC will see you applying for a license if you plan on caring for more than two children not related by blood or marriage. Obtaining a license will allow you to care for up to a maximum of seven children, including the child care provider’s own children. Learn more about child care licensing regulations in BC.
When starting a daycare in Manitoba, you will need license approval for both child care centres and child care homes. Child care centres are divided into infant programs, preschool programs, and age programs. There are extra licensing and health and safety requirements needed for infant programs to ensure the well-being of these younger children.
When it comes to licensed child care homes, family child care can legally care for up to eight children under the age of 12. Group child care services must have at least two providers that can care for up to twelve children under 12.
That being said, if you plan to only care for a handful of children in your home, meaning no more than four children under the age of 12, then you do not need any licenses to operate. Any more than four, including the child care operators’ own children, must obtain a license.
To establish a child care business in New Brunswick you will need to go through the Early Learning and Childcare Services department. Childcare centres can care for up to sixty children when in possession of a child care licence.
Childcare homes, on the other hand, can care for no more than six children of a combination of ages, but can otherwise care for up to nine children if they are all school-age children. These limits include the childcare provider’s own children up to the age of 12.
Newfoundland and Labrador’s Child Care Policy Standards dictate that childcare businesses must apply in writing to a Manager for a new license under the Child Care Act. This child care licence is valid for a maximum of three years. Should you operate your business from your home, you will need written permission from all other household members over the age of 16.
If the child care services operate less than ten hours a week and provide care for three or fewer infants or four or fewer children and infants, it is not required to hold a child care service license.
To apply for child care licensing in the Northwest Territories, you will need to go through the Department of Education, Culture and Employment. The application must identify if it is a centre daycare facility or family home day care facility and whether you will offer full-time, out-of-school, part-time, or preschool care.
You must also include copies of your educational and recreational programs, a floor plan, a report from the fire marshal and public health officer, proof of insurance, an emergency evacuation plan, and more. Once this licensing process is complete, you can operate as a licensed child care program.
Learn more in the Northwest Territories Handbook for Early Childhood Programs.
When starting a daycare in Nova Scotia, you will need to go through the Licensing Services. A license must be issued to any child care facility that provides care for more than six children, or any age combination (0 to 12), or for more than eight school-age children.
Establishing an at-home daycare centre in Nunavut means submitting a complete Application for Child Care Facility License to one of the province’s four Early Childhood Program offices. You can even apply for government grants and funding through the child care licensing system to help you get your daycare up and running. However, if applying for grant money, you must meet certain other requirements compared to if you finance your business on your own.
When opening a daycare in Ontario, you will need to apply for a license from the Ministry of Education should you receive more than five children under the age of 13 years of age at any one time. To submit a license through this application process, you will need to make an account through the web-based Child Care Licensing System, where you can fill out an application and pay the corresponding fee.
If you are operating an at home daycare, you are required to obtain a criminal background check and vulnerable sector search for yourself and any adult that works or lives at the residence.
To pass the requirements for opening a daycare in PEI, you will need to apply for a license with the PEI Early Learning and Child Care Board.
This application should include a service plan, a letter from your municipality stating the property is correctly zoned, proof of liability insurance, and a registered business name. You will also need a copy of a criminal background check and vulnerable sector search for any adult that lives or works within the at-home facility.
The requirements for opening a daycare in Quebec differ depending on the facility type. In order for a home childcare provider to be recognized under the Government, the business must comply with all service quality standards and health and safety standards.
The provider must not care for more than six children, of which a maximum of two can be under the age of 18 months. This number rises to nine children, with no more than four being under the age of 18 months, when assisted by another adult.
In Saskatchewan, you will need to complete the Licensed Family Child Care Home Application to operate an at-home daycare facility in the province legally. That being said, both licensed and unlicensed family child care homes, with one childcare provider, can care for up to eight children, two of which can be infants.
To legally operate a family daycare home in Yukon, you can apply for a 1-year license by submitting a licensing package to the Yukon Government. To obtain this package, email childcare@gov.yk.ca, or telephone 867-667-3492. You will also need to include three references, health, fire, and safety inspections of the home, an RCMP criminal record check, and a medical exam.
Once your license is underway, the department will provide you with a child-care coordinator to help you set up your home daycare and advise you on policies, hygiene and emergency procedures.
One thing is certain, no matter what province you will operate out of, all licensing applications will need to provide proof of insurance for your daycare. Whether at home or in a facility, childcare services must be insured. For example, all applicants must provide proof of $2,000,000 Public Liability Insurance in the Northwest Territories.
Before you welcome your first child, decide what type of environment you intend to provide. Some daycare facilities have organized syllabi to give young kids a head start on education. Others provide toys and books for less formal free play. Still, others combine both approaches for a hybrid daycare. Your choice may depend on your own educational background, how many children you intend to look after, and what consumers in your area want from a daycare facility.
Daycare clients generally appreciate clear pricing plans and well-written contracts. Consider the amount of paid and unpaid time off you’d like to give yourself each year and include it clearly at the front of the document. Include a list of statutory holidays, such as Canada Day, Labour Day, and Thanksgiving, and let your clients know if you’ll be open or closed each day.
Outline weekly or monthly charges for babies, toddlers, preschoolers, and school-aged children, and list any multi-child discounts. This is also the right time to create a company policy document, which you can use to explain required withdrawal notice, sick child policy, and other standard procedures to your customers.
If you plan to keep a small number of children in an in-home daycare, you might decide to work without support. If you want to keep a larger number of children, you may need to hire additional members of staff. People with childcare experience and a list of reliable references often make great support employees.
You can find out more about applicants by conducting pre-employment screening, which can reveal additional details about job seekers, including any criminal histories. If the people you hire haven’t already gone through first aid training, consider sending them to a St. John Ambulance safety and life-saving course.
A vitally important part of the child care hiring process is vetting applicants with a background check. Due to the nature of this business and the fact you are working with children, anyone you hire must meet certain criteria to ensure the safety of your daycare clientele. This includes a criminal record check, as well as a vulnerable sector check.
At this stage, you can begin looking for daycare clients in your area. Word of mouth is a powerful tool in the daycare world, but before that, newspaper advertisements and yard signs can help drum up interest in your fledgling business.
Besides these traditional advertising methods, you will also want to establish an online presence. Having a website or My Business page on Google will help you get noticed.
Focusing on local SEO is also a great idea, as many people search for local daycare centres near them for convenient drop-off and pick up of their kids. If you optimize your website and make a business page on various reviews sites and childcare directories, then people can find and use your services easier.
The final aspect of your childcare business you will need to cover is your finances. How will you get paid, record revenue, and pay for business expenses? Many businesses turn to invoice and accounting software to help them with this task.
Try using a daycare invoice template to streamline the payment process, tailoring the invoice details to each child and guardian. When paired with accounting software like QuickBooks Online, you can track invoices and categorize revenue and expenses, making the financial management of your child care centre a breeze.
Try QuickBooks Online for free today to get your daycare services off to the right start! At tax time, you can deduct certain business-related expenses, including advertising costs, office expenses, field trips, and business-use-of-home expenses.
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