What will I be doing?

Children are our future. They can also be your business. As a home-based childcare provider you will be responsible for providing care, entertainment and meals or snacks for preschool children in your home.

There are more than 60,000 full-time childcare centers in the U.S. and many times more people who care for one or two children in their home or babysit at the children’s home. Though the income per child is moderate, caring for more than one child at a time can help you make a good living.

What will I need to start?

To care for children you must really care about them. If you have experience and/or training in child development, you’re off to a good start. You’ll also need to have adequate space in a home that is child-friendly as well as accessible to parents who need to drop off their children. Your childcare business will also require licensing, inspection and certification, depending on
local regulations. If you prepare food and serve it to children, you may need additional licensing or certification. Of course, you’ll also need toys and other items to entertain and keep children busy.

Who will my customers be?

Your customers will typically be working parents and grandparents of preschool-age children. You may also decide to offer your services to local businesses who will then offer it to their employees. To reach potential customers, let your friends and neighbors know about your new business. Contact local schools, place a small service ad in the newspaper and publicize your business locally.

How much should I charge?

You will price your childcare services by the hour and the service provided. That is, you may charge $2 an hour for four or more hours a day, $2.50 an hour for less than four hours a day and an additional $3 for a meal. You will then add these prices up to give customers a single price, such as $105 a week for five nine-hour days including meals. Check prices of local daycare centers to determine a reasonable price for your services, and set your prices accordingly.

How much will I make?

Most of what you make with your childcare service you get to keep. Overhead expenses include toys, meals and incidentals. The greatest expense is already paid: the cost of your home. In fact, you will be able to deduct the costs of a part of your home used for childcare. You will use IRS Form 8829, Expenses for Business Use of Your Home, which includes a special calculation for day-care facilities.

How can I get started?

Start your childcare service by learning more about local requirements. Check with state and local government offices to find out which regulate day-care centers. Next, begin planning your business, how you will operate it and how much you will charge. Finally, let others know about your new business.

Contact the National Association for Family Child Care (800-359-3817).

The SIC code for childcare services is 8351-01.

How can I use computers to increase profits?

Many home-based day care centers take over the home. Owners live upstairs and the kids get the downstairs. And so much of what goes into the home for operation, maintenance, and repair is tax-deductible as business expenses. Again, that means good recordkeeping. The easiest way of doing so is with checking software (see TOOLS) that categorizes and reports income and expenses. In addition, a database program can help manage scheduling and enrollment.