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How to Start a Daycare at Home, a Simple Step-by-Step Guide

How To Start A Daycare, A Simple Step-by-Step Guide

Note: This post is not to take place of your state’s licensing requirements. Make sure to follow the guidelines and laws within your state when it comes to operating a daycare out of your home. This article is for informational purposes only.

I’m guessing you’re here because you want to learn how to start a daycare business out of your home.

Well first off, you’ll need to check with your state to see if there are any licensing requirements.

What most people don’t realize is that if you are caring for more than one child from two or more families then you are required to be licensed. At least, that’s the requirement here in California. This rule may not apply to all states.

Here’s the thing, each state will have its own requirements that you will be required to meet before obtaining your daycare license. Just like a prerequisite followed by an appointment with your licensing analyst. While I’m sure there are some universal requirements most will have their own.

You can use the below list by state to see if a license is required. This is information I’ve gathered off the internet for that particular state. Make sure you do your own research. Or call the licensing department to find out the required information to obtain your license.


Take a pre-licensing orientation either online or in person held by your state. The pre-licensing orientation will help you get prepared for what is needed to be done at your house to get you ready to obtain a license from your state. Follow all requirements and regulations needed before scheduling your analyst’s pre-licensing visit.

Here is an example of a pre-licensing readiness guide for family child care homes. This one is issued by the state of California. But, you can take a look to help give you an idea of what is expected when getting ready to get your license approved.

Take required courses by your state

There may be some courses that you are required to take based on your state. Here are some examples of courses that may or may not be required by your state. But, very important courses that every child care provider should take required or not.

Must complete 16 hours of Pediatric Health & Safety Training obtained from an EMSA approved vendor, or accredited college/university

    ✓ Preventive Health Practices
    ✓ Pediatric CPR certification
    ✓ Pediatric First Aid certification
American Red Cross First Aid/CPR Certified Badge  

Must complete 3 hours of Mandated Reporter Training

    ✓ What the law requires of you as a mandated reporter
    ✓ How to spot indicators of possible child abuse or neglect
    ✓ How to talk to children about suspected abuse
    ✓ How to make a report
    ✓ What happens after a report is filed
    ✓ Special issues related to child abuse reporting for child care providers

Get your house ready

Some suggest getting down on your hands and knees and roaming your daycare area or home to look for any dangers that may need to be corrected before licensing issues you a license.

Some things that I noticed was that I need to put safety covers on all electrical outlets. I needed to make sure I had age-appropriate toys. This meant getting rid of anything chokeable for babies, such as any toy that might fit through a toilet paper roll or paper towel tube. If an object fits in the tube, it’s too small for children under the age of 3. Children under the age of 3 are at the highest risk for choking due to their small airway, underdeveloped ability to chew and the propensity to explore items with their mouth.

You can find age-appropriate toys by visiting garage sales, Facebook Marketplace, or on Craigslist. We actually got our 6-seat Angeles® Bye-Bye® Buggy on Craigslist for $120 when it retails at $1300. So there are some good buys on there.


There are three types of forms you will need to keep record of in your daycare. They are children’s forms, facility forms, and information to be posted in your family child care home. Below I have listed “examples” of forms you may be required to keep on file in your home. Forms/records must be kept for a period of time such as three years depending on what is required from your state.

Children’s Forms

Facility Forms

Information to be posted in your family child care home

  • Emergency Disaster Plan – This must be posted in your home next to the telephone and the Earthquake Preparedness Checklist, must be attached and available to the public.
  • Notification of Parents’ Rights Poster – This poster must be placed in an area of the home where all parents can see it.
  • Facility License, – Your Family Child Care Home License must be posted in an area of the home where it can be easily seen.
  • Notice of Site Visit must remain posted for XX days (during the hours that children are in care) after each site visit by a licensing representative.
  • Any licensing report documenting a type “A” citation must be posted for XX days during the hours that children are in care.
  • Any licensing report or other document verifying compliance or non-compliance with the Department’s order to correct a Type “A” deficiency must be posted for XX days during the hours that children are in care.


While maybe not required by licensing, this is an important step to take to make sure you have your policies and procedures are in writing. Be sure to check out our article, how to enforce daycare policies even if you’re an introvert. Unfortunately, as you’ll find out, people will take advantage of your kindness.

You’ll forever be changing your daycare handbook to keep up with the things that you are learning while operating a daycare. And with things that you read online to protect the children and yourself. Like I just read this article about why a daycare does not accept sleeping children at drop-off. This is something every daycare should consider adding to their handbook.

Here are three examples of parent handbooks I’ve found online that will help guide you on making your very own handbook.

Butterflies and Bumblebees Daycare Parent Handbook
Morning Star Child Care Parent Handbook
Kiddie Kollege Daycare Parent Handbook


This is a legal binding contract, where a policy handbook is just that a book of your rules and procedures. A contract usually states your hours of operation along with the amount to be paid to you for your child care services. I do not have a handbook per se for my daycare but I do have a contract that my daycare families must abide by. This contract is actually a re-enrollment contract for children already in my care.

Here are some examples of some daycare contracts I found online:
Sample Family Child Care Contract
Parent-Provider Child Care Contract
Family Child Care Contract

How will you be accepting payment?

There are many different ways to collect payments from your customers just like any other business. But, my preferred way is PayPal. Even though it has a fee it allows me to setup recurring payments. What does that mean? That means that my customer makes a one-time payment using my recurring payment link and then is charged on a weekly or monthly basis depending on how the recurring payment link is setup on your end. Use PayPal ‘recurring’ payments and never ask for a daycare payment again.

It basically takes place of you having to ask for daycare payment on a weekly or monthly basis. Once the credit card is charged the first time it continues to charge that same credit card depending on the billing cycle schedule you have setup. So for instance, if your customer makes a payment on Monday and you have your billing cycle setup to be weekly. Then every Monday their credit card will be charged and you will get paid without any hassle. It really is a win, win.

✓ Cash
✓ Check
✓ Credit Card
✓ Google Pay


[youtube video =”ykj6vgz2Brs”] This is a great tool to be able to communicate with your daycare families. The software management tool I use is called Brightwheel. You can manage classrooms, observe students, collect tuition, and stay in touch with families – all from one easy-to-use childcare app.

Replaces the need for paperwork. As with Brightwheel you can log activities such as diaper changes and potty breaks, bottle feedings, nap schedules, mealtimes, attendance, notes, medicine, kudos, and photos all for free. For their premium, paid version, you can log activities such as video, incidents, and the ability to create custom tags to log specific activities affiliated with your program.

✓ Reduce paperwork
✓ Capture milestones
✓ Share moments digitally
✓ Engage families
✓ Digitize check-in
✓ Bill easily
✓ Run reports quickly
✓ Centralize your database

Other childcare management software platforms are HiMama and Kinderlime.


Having child care liability insurance is another thing child care providers should consider having when opening up a daycare at home. Some states even require that you carry liability insurance when operating a daycare out of your home. A daycare insurance program protects you, the children in your care, and your business investment.

The state of California, however, does not require you to carry liability insurance, although highly recommended. Again this is something you’ll need to check with and see if your state requires you to carry insurance. In the state of California, if you do not carry liability insurance you must have your daycare parents sign an affidavit acknowledging that the daycare facility does not carry liability insurance or a bond in accordance with standards established by Family Child Care statute. Having an affidavit or waiver does not protect you. You will have to pay your own legal fees and parents will collect any money awarded from a lawsuit from you.

How much will your business insurance cost? The annual cost of daycare insurance ranges from $250 for an in-home child care business to $2,000 for a larger daycare center. Of course, every child care business is unique and therefore has different insurance needs.

There are three things you can do to help protect you, your family, and the children in your care and they are:

    ✓ Maintain a good safety program
    ✓ Follow applicable licensing requirements
    Purchase insurance

To help give you an idea of the safety hazards you can find in your daycare we have included a chart of the child care centers percentage of safety hazards provided by Garzor Insurance.

Child Care Center Percentage of Safety Hazards Image source: Garzor Insurance

Remember you have a legal duty to act with reasonable care while supervising children. You could be sued for negligence to use reasonable care if a child is injured or becomes ill while in your care. Protect yourself and purchase liability insurance.


I get these quite a bit in my area:

Hello Elyssa @ Shadow Oaks Daycare,
I have recently opened a daycare in my home like you. I was wondering if I could get some advice as you have years of experience? I opened my doors in January and have yet to enroll anyone. I’m on Yelp, Care.com, CCRC, Facebook, Instagram, Craigslist and Google. Do you have any advice you could offer for how to get the phone ringing when just opening up? Any help would be greatly appreciated. Have a great day!

Get a HelloDaycare Website

Advertising your daycare is an essential part of starting your daycare. How do you plan on getting the word out there? There are some free ways to advertise your daycare or some paid ways, it’s all up to you.

What has worked for me is for one, creating a daycare website. My website has been my main way of advertising my business and filling my daycare spots. Also, try doing a search on your community Facebook groups for posts looking for daycare. Join a mom’s group is your best bet. Another form of advertisement that has worked for me is advertising on Craigslist. And of course, creating and passing out business cards. Those would be my tips for advertising your child care business.

Advertise Child Care on Yelp

And let’s not forget about Yelp. Yelp is another good and free way of advertising your child care business. Make sure to set up a business account with them. And install the Yelp Biz app on your mobile phone so that you can communicate with potential families looking for child care. Yelp even rewards you by your responsiveness. Make sure to respond fast to all new inquiries as Yelp highlights those businesses that respond in an hour or less.

Here is the link where you can get started creating your Yelp business page for free.

Get Verified License on Yelp

While advertising your daycare make sure to include your license number on all of your advertisements. In some states, this is a requirement. New on Yelp: Yelp now asks you if you want to show your verified license on your business page. Businesses with a Verified badge typically see a 24% increase in leads. With License Verification, Yelp will confirm your trade license with the applicable government agency and display your license more prominently across Yelp. This, however, is not a free feature from Yelp and will cost an average of $1 per day.


As I’ve said before daycare interviews are a two-way street. Not only are you doing getting interviewed but you get to interview the daycare family too. I would suggest scheduling your interviews after hours so that your time is not taken away from the children. Not only will you not be able to provide adequate care during an interview but the children could start acting out which doesn’t go so well during interviews. Try not to disrupt the daycare.

Make sure to go over your policies and procedures with the potential daycare parents. It’s always a good idea to get this out of the way. I even bring out my contract during daycare interviews just so the parents can know what to expect when enrolling into the daycare.

Be prepared to answer the many questions that parents might have. And remember, sometimes the best answer to these questions is “I do the best that I can.” Because really that’s all that we can do.


Enrolling families into your daycare is actually a long process. Some people even charge a registration fee to collect for their time spent registering the child into the daycare. Which, quite frankly, isn’t such a bad idea.

    Go Over Your Handbook

    When enrolling a family into your daycare you’ll want to sit down with them and go over your policy and procedure handbook. This is an important step to make sure that both the parents and the provider are on the same page when it comes to providing child care for said child. Have them sign off that they have read and agree to the handbook. I also tell my fellow child care providers to keep a digital copy of your handbook on your website. That way at anytime you or the child’s parents can refer to it online.

    Sign the Contract

    Once you’ve gone over the handbook, next have them read the contract. You’ll want to go over the contract with them in detail and have both parties (the parents and the provider) sign and agree to the contract.

    Request a Deposit

    Most daycares request a deposit to hold the spot for a child in the daycare. I usually request a two-week non-refundable deposit that goes towards the child’s first two weeks of child care. Some providers have the two-week deposit cover the first week and last week of child care. Sometimes if it’s four to six months before the child starts daycare I even ask for a months deposit. Which isn’t unheard of since some providers request daycare payments on a monthly basis instead of the standard weekly basis.

    Provide a First Day Checklist

    To make the transition as smooth as possible be sure to provide a first-day checklist for the parents. This is a frequent question I get asked during my daycare interviews. Here are three daycare checklists to help get you started on making your very own depending on the ages of children in your care.

    What You Need to Pack for Baby at Day Care
    A Weekly Daycare Packing List for Babies
    Checklist: What to Pack for the First Day of Preschool

Unannounced Licensing Analyst Visit

Now be prepared for your assigned analyst to make an unannounced visit to your facility. You’ll start to get an idea of how often and when they come to visit after a couple of these. Mine usually comes once a year during the summer, but they’re late this year. You can read about one of my unannounced visits from licensing here.

Note: This post is not to take place of your state’s licensing requirements. Make sure to follow the guidelines and laws within your state when it comes to operating a daycare out of your home. This article is for informational purposes only.

How To Start A Daycare At Home, A Simple Step-by-Step Guide

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Interestingly enough, I'm a home daycare provider at Shadow Oaks Daycare in Thousand Oaks, California. Before Shadow Oaks Daycare, I worked at a promotional advertising company in the advertising specialty industry as a System Analyst and Cost Accountant. On my spare time I like to create websites using WordPress.