How to start a daycare business

If you’re someone that loves to spend time with children, a daycare business would be a perfect fit for you. In this post, you will learn how to start a daycare business with no money.

A daycare business in a nutshell

A daycare business is such that provides supervision and care to infants and young children. A daycare usually operates only during the daytime, especially during common working hours when their parents would be at work.

Whenever you’re running a daycare business, you should note that you won’t only be taking care of children, but also involving them in doing many interactive and educational activities.

Is the daycare business profitable?

Yes, it is. Here are a few reasons why the daycare business is very profitable.

  • There is a high demand for it
  • There are not many daycare businesses, which means less or even no competitors in your locality
  • Connections. You will get to meet many parents, including rich ones. This means you may be eligible to ask for favours in future
  • Parents take their children as important assets. This means they’ll spend as much as they can to make sure they’re comfortable. As a professional in the daycare business, this means more money for you

How to start a daycare business

Follow these steps to start a daycare business:

1. Do some research

The daycare business is more of a local establishment. This means that your customer base will be restricted to the region where your daycare is located.

Due to that, you should only locate your daycare business in a place where there are enough potential customers. You can do some research and gather enough information from your neighbourhood to see if there’s a demand for daycare services.

From your research, you will discover and compile a list of parents and guardians that need daycare services for their kids. You should also note down what kind of facilities each parent is looking for.

2. Draft a daycare business plan

Regardless of the business you’re starting, it always helps to have a business plan. That way, you can set reasonable goals for your business, choose the best ownership structure for it,  decide which service to offer and which one to not, and so much more.

Your daycare business plan should also include your mission statement, goals and objectives, operations, staffing as well as an estimated budget. A business plan keeps you on track and ensures you don’t stray too far from your initial goals.

You may also like: How to write a business plan

3. Secure a good location for your daycare business

If you want to run your daycare business from your home, this step doesn’t need to be talked about much. If you want to use another location, you’ll have to do some research.

Getting a space

A lot of churches, local businesses, commercial centres and schools usually have some space available, and you can set up your daycare business there in exchange for a monthly fee.

You can discover free spaces on the internet, in newspapers and also within your neighbourhood.

Taking extra legal measures

Once you secure a good location, you should proceed with the licensing. Enquire about your city’s zoning laws and licensing guidelines. This is to ensure that the location you choose complies with the laid down rules and regulations.

How to choose a good location

A good child care facility should be:

1. Child-friendly

You can’t site a daycare near a factory.

2. Centrally located

It should be close to the home or place of work of the parents, and not on the outskirts of the town.

3. Easily accessible

Your daycare business should be situated in a place that’s accessible to all parents since they all work in different places.

4. Finance your daycare business

There’s no way you can start a daycare business with no money. However, there are many ways with which you can reduce overall startup costs.

One of them is by using your own building (or a few rooms in your house) to run the daycare business. In that case, you will only spend money on licensing and registering your business.

You should also invest in insurance policies, as they’re very important in your line of work. You can use your personal savings or adopt a partnership structure and make the other partner(s) contribute to the funds.

You can also seek out angel investors, venture capitalists and business accelerators. You should read our article on How to get funding for a new business.

Check this out: How to get funding for your business in Nigeria

5. Register your daycare business

The next thing you should do is register your daycare business with the applicable authorities in your country. Although you can run a daycare without registering it, it’s not advisable, since it puts you at a disadvantage.

If one of the children in your care dies (due to your fault, or factors beyond your control), the parents might take legal action against you. If the court orders your daycare business to pay a settlement fee, you must pay it, even if it involves selling your personal properties.

However, such things will not happen with a business registered as an LLC. In the worst case, your business will only be closed down (due to bad debt or bankruptcy). Your personal properties and savings will not be affected.

6. Hire the right staff

Depending on the size of your business, you may need to hire other child care professionals. Anyone who has experience as a nanny or babysitter should be able to take on any job role in a daycare business.

You should vet your staff carefully before hiring them. A daycare business is a service business, and its success is largely impacted by the people working with you.

7. Market your new daycare business

Get the word out that a new child care facility is now within the reach of all parents within the region. Print out fliers and posters, tell all your friends, visit potential customers individually and also use the local radio channels.

Although not necessary for a localized business like the daycare type, you can also go digital. You can run social media ads but target only your region. Remember that your customers will be the parents, so you should target people between 25 to 45 years old.


So far so good, we’ve explained how to start a daycare with no money. Although there are still some things to be done, they’re not compulsory. One of them is business insurance.
Many insurance companies offer a business owner’s policy (BOP), which covers the two main policies you’ll need to safeguard your daycare business. That includes general liability and commercial property insurance.

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Victor Iyiola

Victor Iyiola

Victor Iyiola is a Content Writer with He has a great passion for Business, Finance, and Entrepreneurial topics. Victor is a big fan of
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