How much does it cost to start a home daycare?

What drives the cost

Safety upgrades for inspection

Locks, baby gates, smoke and carbon monoxide detectors, outlet covers, and a fire extinguisher run $400 to $2,200 in the plan. A home that already has a fenced yard and separate nap room lands near the low end.

Cribs and safe-sleep equipment

Cribs for infants and cots for older children cost $400 to $1,200. Licensing rules usually specify crib standards and spacing, so check before buying secondhand.

Licensing steps and background checks

Applications, inspections, fingerprinting, and background checks for you and any adult in the home are required before opening. Fees vary by state, so check with your state childcare licensing agency for current amounts.

Liability insurance

The plan budgets $400 to $1,000 for the first year of business liability coverage. Standard homeowners policies typically exclude a home business with children in care, so this is a separate policy.

Learning materials and child-size furniture

Toys, books, and learning materials take $500 to $1,400, and child-size tables, chairs, and kitchen items add $250 to $800. Mixed-age groups need more variety than a single-age room.

The cheapest way to start a home daycare

Get licensed for the smallest capacity first, use furniture and toys you already own where they meet safety rules, and buy new only for cribs and anything the inspector flags. Skip new outdoor play equipment if your yard is already fenced and safe, and use free billing apps until you have more than a few families.

• Ask your local childcare resource and referral agency about free safety kits or start-up assistance
• Buy toys and books from consignment sales, checking every item against recall lists
• Enroll in the federal child and adult care food program to offset part of the cost of meals
• Use free state early learning standards as your curriculum guide instead of buying a packaged program
• Install gates and cabinet locks yourself rather than hiring a handyman

Costs owners forget

• Higher utility bills from heating, cooling, and laundry all day, budgeted at $220 a month in the plan
• A higher homeowners insurance premium or required rider once you run a licensed program
• Ongoing training hours for license renewal, set aside at $40 a month
• Wear on floors, walls, and furniture that you will eventually repair or replace
• Paying an approved substitute when you are sick, since licensing usually requires a backup plan

Monthly operating costs

• Liability insurance$75
• Utilities increase (water, electric, heat)$220
• Billing and parent app$30
• Training and license renewal set-aside$40
• Marketing and waitlist ads$80
• Cleaning and household supplies$90
• Total per month$535

How owners pay for it

Most home daycare owners pay for start-up from savings because the costs are modest. Some states and local agencies run start-up grants or equipment programs for new family childcare providers, so ask your resource and referral agency. Charging a registration fee and the first month’s tuition upfront also helps cover early supplies.