How to Start a Day Care Business in UK USA (Business Plan)

Day care business

Do you have these questions in your mind?

  • Is the Kids’ Care business profitable?
  • How to start a Kid’s daycare from home?
  • Tips to start a Kid’s daycare business
  • Things needed to create a daycare at home

In this article, you will find answers to all your questions. So please grab a cup of coffee, and let’s get started.

Table of Contents

What is a Kids Day Care Business?

A kid’s daycare business provides supervision and care for children daily, typically while their parents are at work or otherwise unavailable. 


Daycare centers may be licensed by the state and may offer various programs, such as full-time care for infants and toddlers, before- and after-school care for school-aged children, and summer programs for children of all ages.


Daycare centers typically have a set schedule and follow a structured routine, which may include activities such as play, crafts, outdoor play, and educational activities. 


The staff at a daycare center may include teachers, assistants, and caregivers, who are responsible for the well-being and safety of the children in their care.


Market Insight: $50 Billion Kids Day Care Business in the US and UK combined.

Day care business

Types of Kids Day Care Business

Before starting a daycare business, you must first decide what type of daycare you want to open. Some Day Care Business models so that you may decide accordingly:

Day Care Center: 

  • In a daycare center, qualified private providers operate from commercial spaces and offer full-time or part-time reliable child care.
  • It can accommodate more children and bring in more revenue.
  • It provides a beautiful opportunity for children of various ages to play together, learn from peers, and mainly gain preschool skills.
  • Daycare centers provide children with an activity structure, regular reports, and updates on child -development.
  • Operating hours of child day care are similar to most parents’ schedules.
  • Provides play-based learning, although some may also integrate preschool curriculum.


In-Home Day Care:

  • An in-home daycare is child care offered by private home providers.
  • Often cheaper than a daycare center.
  • In-home daycare is for a smaller group of children of all ages to play, socialize and learn; it functions more like a family than a daycare center.
  • In-home daycare provides children with a more flexible and unstructured schedule of activities throughout the day.


In addition to the above business models for child care, there are various childcare options:

  • Babysitter
  • Nanny
  • Family Child Care Homes
  • Child Care Centers
  • Preschool Programs
  • School Age Programs
  • Family, Friend & neighbor Care
  • Before & After School services

Keeping in mind your time capacity, financial restraints, and personal preference, you can choose the type of daycare you’re willing to open.

The kid's daycare industry comes with great responsibility, but at the same time, it is incredibly rewarding.

Find your Daycare Niche

If you want to be successful, you must have a niche in your vertical.

Find an exceptional service in the daycare facility that helps you specialize; this factor will set your daycare business apart from the other daycare providers.

This specialized service might encourage parents to enroll their children at your facility, as you have a specialization unmatched by other daycare providers.

Here are numerous daycare niches to help you decide:

  • Part-time childcare centers
  • Religion-based curriculum daycares
  • Home economics daycare
  • Sports daycare
  • Infants only child care center
  • Faith-based/religious
  • School Child Care
  • Montessori
  • Preschool
  • Reggio Emilia
  • School-age
  • Special needs
  • Vacation and summer
  • Waldorf

Find and pay attention to a niche other daycares need to do in your area. It will increase your enrollment rates, create a positive learning experience for the children, and make parents even more satisfied with your childcare facility.

Is this Kids Day Care Business Right for you?

Before opening a daycare business, you must determine if this is the right path. Then, you have to consider the pros and cons that come along with the kids’ daycare business.

Here are some pros and cons of owning a daycare business:

Pros :

  • The joy of working with kids.
  • High demand due 
  • Writes off your household expenses at the time of tax.
  • You can spend more time with your kids.
  • Indoor working.
  • You’ll be your boss.


  • Long working hours.
  • Establishing initial trust with parents & kids.
  • Costly Safety Guidelines.
  • In-Home Daycare Home Business
  • Need constant planning 
  • Profit margins are average.

A typical day in a Kid's Day Care business:

- Management & supervise the safety of children in their kids
- Ensure the basic needs of toddlers & infants be fulfilled
- Organize multiple meals and snacks
- Ensure Hygiene
- Organize various activities
- Help kids to explore interests
- Maintain schedules and routines
- Make sure kid have proper physical activity, rest, and playtime
- Make sure that every kids has mental & emotional support

Day care business

Investment in a Kids Day Care Business

When starting a daycare center, your average startup cost varies with the type of daycare center you want to run. It can be either a home daycare or a daycare center.

Starting up a home-based daycare centre will require fewer startup costs than that of a daycare facility or centre, which range from $10K – $50K.

Required fixed costs:

  • Business registration costs
  • Furnishing
  • Insurance
  • Legal fees
  • Equipment


Variable Costs:

  • Utilities
  • Transportation
  • Medicine kits
  • Art & Craft Supplies
  • Cleaning supplies
  • Food and kitchen Supplies


The prominent startup and running costs also include salaries and wages. As your business grows, upgrading your space and repairing it will also be costly.

Essential Checklist of Kids Day Care supplies:

1. Health & safety supplies
2. Disposable Towels
3. Cleaners
4. Cleaning supplies
5. Furniture & equipment
6. Diaper Changing Station
7. Step stools for the Bathroom
8. Safety Gates
9. Age appropriate Play material / Toys
10. Smoke detectors
11. Carbon monoxide detectors
12. First-aid & Safety kits
13. Knob Covers
14. Cabinet locks with kid safety features
15. Electrical outlet covers
16. Safety guards for Corners

Day care business

How much does a Day Care Business make?

The revenue for a daycare business can vary greatly depending on the location, size, and type of services offered. 

In the United States, the average revenue for a home-based daycare is around $58K per year. While in the United Kingdom, the average revenue for a home-based daycare is around £34K per year. 

7 tips to run successful Kids Day Care business:

1. Regularly clean and sanitize your daycare.
2. Childproof your daycare.
3. Consistently encourage feedback and reviews from parents.
4. Maintain a detailed handbook.
5. Be active on social media to promote your daycare.
6. Make information accessible to clients and parents online.
7. Plan events and activities for kids each day

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Points to consider before starting Kids Day Care business 

  • Decide how many children will you care for? 
  • Always start with a small number of children
  • Many states have strict rules about the maximum number of children allowed in daycare
  • Minimum and maximum age of children for enrollment at your daycare
  • Timing for children to be dropped off and picked up by parents
  • Will you provide food, or do children need to bring snacks and lunches?
  • Establish health and safety plans for emergency evacuation, sickness prevention, and accident procedures

    Create a contract for parents which includes information about the following:

    – Payment
    – Emergency contact numbers
    – List of people to pick kid
    – Child’s allergies or medical conditions

Challenges in Kids Day Care Business

- Non-compliance in licensing

- Lot of paperwork

- No proper system for progress tracking

- Lack of communication with parents

- Lack of Safety measures

- Understaffing

- Low enrolment numbers

- Difficult student behavior

Day care business

Qualification, Skills Requirements, Training & Certifications

The requirement to start a kid’s daycare business vary significantly from state to state. In addition, each state has different child daycare licensing and family daycare licensing requirements.

Before starting a daycare, you should have an introductory training course about kids’ health, safety, nutrition, and development.

This way, you’ll be better prepared to launch a kids’ daycare business.

TIP: Receive Early Childhood Education / Diploma.

Before starting a daycare business, it is advisable to have hands-on experience in the early childhood development of kids, as you need to know about the right kind of support and care you will have to provide to the kids.

So, get a degree in early childhood education from your local community college.

Licensing Requirements

If you are in the US:

  • Contact your state’s Department of Children and Family Services (DCFS) to learn about specific regulations for childcare providers. 
  • The National Database of Kids Care Licensing Regulations is available at the website.
  • After you have read licensing requirements carefully, you can make an appointment with licensing specialists to ask questions and review the procedure for obtaining your license.


If you are in UK:

  • To start a nursery or other daycare business in the UK, you need to register with Ofsted unless you plan to work with 3 or more people in someone’s home. 
  • Other people involved in your daycare also need to apply themselves to Ofsted as part of your application to register.

Hire only qualified, calm, empathetic, and professional caregivers and assistants. While hiring the staff, you must consider the child-to-staff ratio, which will strongly affect the type of center you run.

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How to Grow your Kids Day Care Business

Your Unique selling proposition (USP) explains to potential customers exactly what makes your daycare special. It helps you grow your Kids Day Care business. 
Your USP could be one of the following:
  • Innovative curriculum.
  • Affordable fee Proper Activity Schedules.
  • Kids loving Staff.
  • Better Ofsted results.
  • Flexible schedules.
  • Longer hours to accommodate working parents.
  • Good location.
  • Better meal Plans.
  • Protocol for health and safety.
  • Supplementary activities like  music or dance classes.
  • Facility for school pick-ups and drop-offs.

In US, experts value the daycare industry at $55 billion in 2019 and in the United Kingdom will amount to approximately 5 million pounds by 2025.

Find a good location for your Kids Day Care 

A few things to consider before choosing a location can be:


  • Always familiarize yourself with the community and understand the needs of the population of an area.
  • Neighborhoods with growing families will be most suitable.

Proper physical space:

  • Your daycare location must have suitable outdoor play space.
  • Enough space for each child to move freely.
  • Proper space for children to play, eat and rest with adequate airflow and comfortable room temperature.
  • There should be room for storage of supplies, staff belongings, and additional items.

Preventive and safety measures

  • Make sure that potential sites should be safe
  • Consider fenced gardens for playtime
  • Leveled outdoor surfaces
  • Spacious playrooms with corner protectors
  • Sufficient kitchen and bathroom spaces
  • Ample parking spaces for parents
  • Preventive measures must include a fire suppression system and two exits in each activity room

Check with your local child care licensing agency for specific requirements, as most states require you to have written policies and procedures. Some listed topics you may include in your handbook can be admission, hours, payments, activities, belongings, discipline, emergencies, health care, and meals.


The kids’ daycare industry comes with great responsibility, but at the same time, it is incredibly rewarding when it comes to profitability; at the same time, the daycare business is also very meaningful.


Running a daycare center is a profitable business; if you enjoy being with children, you will enjoy being part of their growth through your company. 


Daycare centers have recently been in high demand due to the higher global percentage of working parents.


Starting a kid daycare center provides you with both monetary and emotional rewards. 



If you think you’re ready and can run a business smoothly, go for it. 

Want to Save Time in your Business Launch?

  • How to Create a Business Plan
  • What is Market Research, USP, Niche & Positioning
  • How to find a suitable name for your business
  • How to create your brand image (Logo + Branding)
  • How to Register Your Business
  • How to Register for Taxes
  • How to get Licenses / Permits
  • How to Open a Business Bank Account
  • How to Get Business Insurance
  • Which Payment Processing Terminal (POS) to buy
  • How to get Funds for your Business
  • How to do Sales & Marketing – Offline & Online
  • Why have a Website / Blog / Social Media
  • How to build & train your Dream Team
  • How to provide Excellent Customer Service
  • Buying an Old Business Vs Franchisee Vs Own Brand from Scratch

Handpicked inspirational Youtube videos for you

How to Start a Daycare in 2022 | Step by Step Plan – YT Channel ‘Ashley Binns’

How Much Money You Can Make As A Child Care Business Owner – YT Channel ‘Dani Christine’

A. Some steps to make you day care more profitable are:

a) Invest in a good staff. 
b) Increase enrollment by promoting.
c) Add different services that improves customer satisfaction. 
d) Maintain a balance between business and customer needs.
e) Make a safe environment a priority

A. Here are some things to keep in mind while setting up a day care business: 

  • Create a general overview of the company
  • Analyze market
  • Learn about licensing requirements in your state
  • Funding
  • Finding the right staff
  • Setting up

A. Yes, the US daycare industry has a predicted compound annual growth rate of 3.9 percent between the years 2020 and 2027, and is valued at around $60 billion right now. 

A. Here are a few well-known day care companies in the UK:

1. Busy Bees

2. Bright Horizons

3. Kids Planet

4. Teddies

5. The Creation Station

A. Here are a few well-known day care companies in the US:

1. KinderCare Learning Centers

2. Bright Horizons

3. Children’s Learning Adventure

4. The Goddard School

5. La Petite Academy

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