How much does it cost to start a home daycare?
About $9,300 all in for a small one, opened by one founder in an American city: $6,150 to open the doors and $3,150 to keep going for the 6 months it typically takes to pay its way. Below, every item at low, typical and high with where it comes from — and your own quote, for your country, your town, how you start and the money you have.
To open: $6,150
Cots, high chairs and play equipment: $2,000 ($800–$4,000). Playground: child tables/chairs $100–$300 per child, changing tables $250–$500; a home of about eight children (estimate)
Toys, books, art supplies, rest mats: $1,200 ($500–$2,500). Playground: consumer goods $2,350–$4,750 for a small centre; a home's about half (estimate)
Licence, inspection, background checks: $500 ($100–$1,200). Playground: child-care licensing $100–$800, inspections $200–$600, background checks $50–$150 per person
CPR and first-aid training: $150 ($50–$300). Playground: training $50–$600 per employee
Liability insurance, first year: $1,200 ($600–$3,000). Home daycare liability cover is commonly $500–$1,500 a year (Procare and Brightwheel home-daycare guides); estimate at the high end with a policy rider
Flyers and a listing: $300 ($50–$1,000). Our estimate: flyers, a free listing and a paid one on a childcare finder
Forming the company: $800 ($150–$2,500). An LLC's state filing is $50–$500 (state fee schedules), plus an EIN (free) and a registered agent; the World Bank measured the procedures at about 1% of income per capita, about $850 (Doing Business 2020); a lawyer's formation package $500–$2,000.
To keep going until it pays its way: $3,150
Running costs while sales build: $3,150 ($750–$10,800). Food and snacks (8 children), Diapers, wipes, cleaning supplies, The household's extra electricity, heating and water, Child-care management software, until it breaks even; sales are taken to grow evenly to cover them, so about half is needed. Break-even: A home provider's costs are small next to one family's fees: a few full-time children cover them (estimate from the figures above)
All in: $9,300
About $9,300 all in ($3,000–$25,300): $6,150 to open and $3,150 to keep going for the 6 months it typically takes to pay its way.
$10,000 of your own covers it.
The trade's published range, before the months it takes to pay its way: $1,000–$10,000. Procare and Brightwheel home-daycare guides: $1,000–$10,000 to open a licensed family child care home; state licensing fees $0–$500 (sim-launch-costs.ts)
How much does it cost to start a home daycare?
About $9,300 all in ($3,000–$25,300) for a small one, from home, in an American city. To open: Cots, high chairs and play equipment $2,000; Toys, books, art supplies, rest mats $1,200; Licence, inspection, background checks $500; CPR and first-aid training $150; Liability insurance, first year $1,200; Flyers and a listing $300; Forming the company $800 — $6,150. To keep going for the 6 months it typically takes to break even: running costs while sales build $3,150 — $3,150. The trade's published startup range is $1,000–$10,000 (Procare and Brightwheel home-daycare guides: $1,000–$10,000 to open a licensed family child care home; state licensing fees $0–$500 (sim-launch-costs.ts)), which leaves the months before it pays its way out.
What does SparkTower's simulator pay to open it?
The simulator pays the one-off opening costs before the first customer — the running costs and the founder's living it plays month by month: Safety work: gates, locks, smoke alarms, first aid $3,000; Cots, high chairs, toys and play equipment $3,000; Licensing, inspection and background checks $1,000; Liability insurance $1,200; Forming the business $300; Flyers and a listing $300. A home day-care: $1k–$10k (Procare and Brightwheel home-daycare guides; state licensing fees $0–$500).
How much of that do you keep?
$6,000 of it — the kit, fit-out or stock it bought — is still yours afterwards, something a buyer would pay for and a lender would lend against; the other $2,800 is spent.
What if my own money doesn't cover it?
Most founders borrow the rest. A small-business term loan runs about 11% a year over 5 years (SBA 7(a) loans are the prime rate plus 3 to 6.5 points), repaid every month from the start — before the business has found its customers. In SparkTower's home daycare simulator the founder starts with $15,000 of their own money; the launch costs come out of it and leave $6,200 to trade on, with nothing borrowed.
Can you start a home daycare with no money?
Not in full: lenders want the owner to put in about 20% (the SBA's own floor for a start-up is 10%), and lend against the kit, fit-out and stock a launch buys, not its marketing or a software build. What a founder with nothing does is open smaller — a few children to start, with what the home already has — on about $3,200 of essentials (safety work and first aid $1,500; licensing and background checks $500; liability insurance $1,200), borrowed as a microloan (the SBA's are up to $50,000, at 8–13%) or, for a few thousand dollars, on a card at about 22%. The rest is bought once the business can afford it. A home day-care opens on what the house has, with the safety work and licence a state asks (Procare and Brightwheel home-daycare guides).
Will it earn the money back?
That depends on what you charge, how many customers you win and what your rivals do. The free home daycare simulator pays these costs before it opens, borrows what the founder's cash doesn't cover, and plays the business forward against real rivals, so you can see whether it earns them back before you spend them.
What it costs to start others like it
- Cost to start a small-town business — $126,000 all in
- Cost to start a café — $155,000 all in
- Cost to start a restaurant — $223,000 all in
- Cost to start a salon or barber — $128,000 all in
- Cost to start a gym or studio — $208,000 all in
- Cost to start a food truck — $116,000 all in
- Cost to start a bakery — $145,000 all in
- Cost to start a retail shop — $160,000 all in
- Cost to start a cleaning service — $27,100 all in
- Cost to start a landscaping business — $53,900 all in
- Cost to start an auto repair garage — $156,000 all in
- Cost to start a daycare or nursery — $117,000 all in
- Cost to start a plumbing or electrical trade — $55,400 all in
- Cost to start a construction company — $80,700 all in
- Cost to start a trucking company — $113,000 all in
- Cost to start a solar installer — $99,000 all in
- Cost to start a property developer — $937,000 all in