Common Mistakes New Daycare Owners Make and How to Avoid Them
- Nate Jones, CPCU, ARM, CLCS, AU
- Dec 2, 2025
- 2 min read
Starting a daycare is rewarding but comes with many challenges. New owners often face obstacles that can impact profitability, safety, and compliance. Recognizing common mistakes early helps you avoid costly setbacks and ensures your daycare thrives.
1. Underestimating Startup Costs
Many new daycare owners miscalculate the money needed to start:
Rent or facility purchase costs
Licensing and permit fees
Renovations and safety upgrades
Staff salaries
Curriculum and educational materials
Marketing and technology expenses
Tip: Create a detailed budget and include a buffer for unexpected expenses.
2. Not Understanding Licensing Requirements
Operating without proper licenses and certifications can lead to fines or closure:
State daycare license
Zoning approvals
Staff background checks
Fire, health, and safety inspections
3. Hiring the Wrong Staff
Staff quality directly affects safety and reputation:
Hiring unqualified staff to save costs
Ignoring staff-to-child ratios
Not providing proper training in CPR, first aid, and childcare best practices
Tip: Invest in qualified staff and ongoing professional development to maintain high-quality care.
4. Poor Marketing and Enrollment Planning
Even great daycare programs fail if families don’t know about them:
Not creating a professional website or using SEO
Neglecting social media and online ads
Ignoring referral programs and community engagement
Tip: Develop a marketing plan before opening to generate leads and enroll children quickly.
Struggling to attract customers? Let Contractor Back Office handle your website SEO and marketing needs.
5. Inadequate Policies and Procedures
Clear policies protect your business and guide staff:
Lack of health and safety protocols
No emergency plans or parent communication strategies
Inconsistent disciplinary or operational procedures
Tip: Develop comprehensive manuals and training for staff, including drop-off/pick-up and illness policies.
6. Neglecting Financial Planning
Without proper financial planning, many new daycares struggle to stay profitable:
Overestimating revenue
Underestimating expenses
Failing to track cash flow and tuition payments
Tip: Use a financial plan to monitor income, expenses, and profit margins monthly.
7. Skipping Essential Insurance Coverage
Many new daycare owners overlook insurance until it’s too late:
Final Thoughts
Starting a daycare is exciting, but avoiding common mistakes is key to long-term success. Careful planning for costs, licensing, staffing, marketing, policies, financial management, and insurance will keep your daycare compliant, profitable, and trusted by families. Partnering with Wexford Insurance ensures your daycare is protected against risks, giving you peace of mind as you grow your business.
Contact us today.
