A day care business can allow you to tap into a business always in demand for working mothers. However, opening a center subjects you to up-front costs to meet government health, safety and licensing standards, and allow children space to play, eat, stay clean and nap. These expenses will vary by your center's zip code, size, number of children, selection of equipment and menu of services.
Construction and Upgrades
The center must meet building codes and other regulations. St. John Lutheran Church of Cedar Falls, Iowa reports that it spent $17,106.03 in 2012 for egress windows, new doors and an additional outside entrance to comply with building codes. The North Carolina-based Self-Help Credit Union projected in 2014 that renovation costs for a center licensed for 76 children could be as high as $55,000. Star Child Academy, based in Apopka, Florida, estimated in February 2014 the costs of buying land and constructing a building for its franchised centers in the $3.1 million to $4.5 million range.
Room Furnishings and Supplies
The rooms for infants should have equipment such as cribs, diaper-changing stations, music and activity gyms. Preschool rooms need art supplies, couches and manipulative toys. According to Utah's Department of Workforce Services, Office of Child Care in 2012, a fully-furnished and equipped infant room could run about $10,000, while a minimally stocked version costs about $7,000. The agency estimated in 2012 that a preschool room costs run from $8,000 to $15,000.
Providing Outside Play
The South Carolina Institute of Medicine and Public Health reported in December 2013 that fixed-play equipment ranges in costs from $4,000 to $50,000 for modular systems. Portable play equipment, such as balls, hula-hoops and bean bags, run about $200. However, they must be replaced more often than fixed playground equipment.
Equip the Kitchen
Day cares need commercial-grade kitchen equipment to comply with health requirements. The size and power and manufacturer or seller of the units will affect costs. For example, as of January 2014, Advance Tabco, headquartered in Edgewood, New York, prices its three-compartment commercial grade sinks from $1,047 to $7,998. Frigidaire, in 2014, listed the manufacturer's suggested retail price on a 19.5 cubic feet food service grade refrigerator as $1,999.
State licensing authorities typically set ratios of children to workers.Thus, the number of children you accept at the start will determine your staff costs. Childcare worker salaries vary by job descriptions, positions and location. The Bureau of Labor Statistics reports that in May 2013, the average salary of a child care worker in a day care center was $19,980.
Inspections and Permits
You must get a license to operate a daycare. As part of the process, the center must pass a battery of tests. These inspections typically include fire safety, sanitation, lead risk, furnace and playgrounds. Figure your state's fees for these inspections and the application into your start-up costs. For example, the Michigan Department of Human Services advises its applicants that the estimated application and inspection fees, as of January 2014, ranged from $1,470 to $4,830. Depending on your state, the application fee will depend on how many children you're able to keep.
Child Care Insurance
Insurance costs vary by the location, size and features of your center. West Bend Mutual Insurance Company, located in Middleton, Wisconsin, reported in April 2013 that its large, commercial daycare owners had premiums around $2,000 a year. The cost for in-home daycare facilities was $250 to $500 per year. These estimates include coverage for molestation and abuse claims. The use of transportation and longer operating hours are among other factors that can raise insurance costs.
- Indiana Family and Social Services Administration: The ABCs of a Child Care Business
- Michigan Department of Human Services: Get Licensed as a Child Care Center
- Utah Department of Workforce Services: Office of Child Care: Opening a Quality Child Care Center
- South Carolina Institute of Medicine and Public Health: The Role and Value of Portable Play Equipment in the Child Care Center
- Child Action, Inc.: Opening and Operating a Child Care Center
- Star Child Academy: Investment
- IBISWorld: Day Care in the US -- Market Research Report
- St. John's Lutheran Church: Kitchen and Childcare Center Renovations, and Boiler Replacement Project
- Bureau of Labor Statistics: Occupational Employment and Wages -- 39-9011 Childcare Workers
- Iowa State University Extension: Remodeling Community or Church Kitchens
- Self-Help.org: Example -- Child Care Center Start-Up Costs
- Westbend Mutual Insurance Company: Ask the Experts -- How Much Does Child Care Insurance Cost? Rachel Frank
- Maryland Committee for Children: Center Classroom Equipment
- National Food Service Management Institute: Care Connection: Food Purchasing/Procurement Grab and Go Lesson -- Purchasing Large Equipment for Child Care II
- Advance Tabco: Plumbing Catalog -- Commercial Sinks, Faucets & Accessories
- Frigidaire: Frigidaire Commercial 19.5 Cu. Ft., Food Service Grade, Refrigerator
- Dejan Ristovski/iStock/Getty Images