How Much Does It Cost to Start a Daycare Business?

Nate Jones, CPCU, ARM, CLCS, AU
9 minutes ago
2 min read

Starting a daycare business can be rewarding, but it comes with upfront and ongoing costs. Understanding expenses ensures you plan effectively and avoid surprises.

In this guide, we break down startup costs, recurring expenses, and the insurance coverage needed to protect your business with Wexford Insurance.

Licensing and Regulatory Fees

Before opening, you must comply with state and local regulations. Costs typically include:

Daycare License Fees: $50 – $500 depending on your state
Background Checks for Staff: $25 – $100 per employee
Inspections and Certifications: $100 – $500

Facility Costs

Your daycare location is a major investment. Costs may include:

Rent or Purchase of Facility: $1,500 – $5,000/month for rental; $100,000+ to buy
Renovations and Safety Upgrades: $5,000 – $20,000
Furniture and Equipment: $3,000 – $10,000
Outdoor Playground Equipment: $2,000 – $10,000

Cost-saving tip: Consider community centers or shared spaces initially to lower expenses.

Staff Salaries and Training

Staffing is one of the largest ongoing costs:

Teacher Salaries: $25,000 – $45,000/year per teacher
Assistants: $20,000 – $30,000/year per assistant
Training and Certifications: $100 – $500 per employee

Ensure compliance with staff-to-child ratios to meet state regulations.

Supplies and Curriculum

Every daycare requires educational materials and daily supplies:

Toys, Books, and Learning Materials: $1,000 – $3,000
Food and Snacks (if provided): $200 – $600/month
Cleaning and Hygiene Supplies: $100 – $300/month

Investing in quality supplies creates a safe and engaging environment that attracts parents.

Marketing and Technology

Attracting clients requires an initial marketing and technology budget:

Website Design and SEO: $500 – $3,000
Social Media Ads and Online Listings: $100 – $500/month
Enrollment and Management Software: $50 – $200/month

Explore Day Care Marketing Tips

Struggling to attract customers? Let Contractor Back Office handle your website SEO and marketing needs.

Insurance Coverage

Insurance protects your investment and the children in your care. Costs vary based on location, number of children, and coverage limits:

General Liability Insurance: $500 – $2,000/year
Property Insurance: $500 – $1,500/year
Workers’ Compensation: $1,000 – $5,000/year depending on staff
Abuse & Molestation Coverage: $300 – $1,000/year
Commercial Auto Insurance (if transporting children): $1,000 – $3,000/year

Wexford Insurance specializes in daycare coverage, helping you find policies that protect your business, employees, and children in your care.

Final Thoughts

Starting a daycare business requires careful planning and budgeting. Typical startup costs range from $20,000 – $100,000+, depending on location, staffing, and facility size, with ongoing monthly expenses for salaries, supplies, and insurance.

Insurance is critical to protect your investment. With Wexford Insurance, you can secure comprehensive coverage for liability, property, employees, and vehicles, allowing you to focus on growing your daycare business confidently.

Contact us today.