How to Start A Daycare Center With Government Grants

by Gene Linn; Updated September 26, 2017
Tables and chairs

Starting a business is a daunting task, and opening a daycare center brings the added responsibility for the well-being and supervision of children. Government grants can help with initial funding for non-profit private ventures and non-commercial educational institutions and tribal organizations. Aside from securing start-up funding, another major issue is obtaining local licenses and permits. Daycare center operators seeking a government grant will need to comply with government-mandated licensing requirements.

Government Grants

The federal government provides grants through state agencies for non-commercial daycare centers that serve areas or populations with specific needs, such as poor rural towns or historically black colleges. The U.S. Department of Agriculture provides grants through its Community Facilities Program. The Health and Human Services Department offers grants through its Child Care and Development Fund. The Department of Housing and Urban Development provides Community Development Block Grants. Grant proposals should address key start-up issues such as an operating budget and a work plan, including staffing and facilities details.

Licenses and Permits

State licensing requirements for daycare centers vary but may include information on the amount of space available to each child, staff/child ratios, food preparation and equipment and emergency procedures. Virginia, for example, also mandates submission of an operating budget and completion of background checks for staff. Local governments may require centers to comply with zoning laws and health and safety codes. The Small Business Administration website offers a link to state licensing bodies.


New centers must draw up detailed plans covering start-up and operating expenses. The start-up budget should include one-time costs, such as major equipment and utility deposits. Operating budgets account for staff salaries, food costs and insurance premiums. The SBA is one of a number of sources for sample budgets. The SBA site also presents a sample cash flow forecast sheet to help balance income and expenditures. A thorough marketing plan will help a center meet its income needs. The plan will address needs and spending power of potential client families and provide for promotions such as low-cost advertising through fliers.

Management Plan

A sound management plan will ensure the center has qualified staff and provides employees with the proper level of pay and needed human resources services. The number and qualifications of the staff will depend largely on the goals of the center and on state licensing requirements for student/staff ratios and group size. The center’s licensing agent and child care referral organization can help set develop job descriptions. These groups can also assist in setting competitive salaries and fringe benefits.

Final Preparations

Before the first child enters the center, it is best to painstakingly prepare the facility for the safety and well-being of the children. Make sure everything that could harm the little ones is out of reach by -- for example -- placing chemicals and medicines under lock and key and storing toys safely. Safe, fun toys and appropriate equipment such as cribs, sleeping mats and child-size tables and chairs must be available.

About the Author

Gene Linn started writing professionally in 1980 and has deep experience as a reporter. He has written for such publications as UPI, Bloomberg and the He earned a Bachelor of Science in journalism and a Master of Arts in East Asian studies from the University of Kansas.

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