Providing daycare services to your friends, family, and neighbors is a great way to earn a living using your own home to help those that need daily care for their children while they go to work! In the childcare industry, you are charged with caring for the children of families with one or more working parents, who desperately need your services to ensure a decent quality of life for themselves and their own families. In order to be successful in the business of childcare, you must plan, prepare, and invest in your business so that the enterprise can succeed in the long term.
Successful daycare providers should consider the political, economic, social, technological environmental, and legal issues that stem from their industry. They should also examine the critical success factors and cost-drivers that impact the amount of revenue required to maintain the business. Providers need to be licensed and registered in the state of Maryland, which also requires that providers have training in early childhood education. There are many ways to satisfy the requirements, but individuals considering this industry should be aware that such requirements exist. Further, the home or facility where the childcare takes place needs to meet health and safety regulations. These costs are not monthly, but need to be addressed before doing business. Please visit the Department of Labor, Licensing and Regulation at http://www.dllr.state.md.us/ for requirements for your business.
The tables below depict the common issues and costs associated with providing childcare.
| Political | Labor laws covering hiring practices require childcare providers to have background checks | |
| Economic | Needs location accessible to parents for pick up and drop off | |
| Population needs to have the income to sustain ongoing childcare | ||
| Job market – parents may prefer to stay home if they can’t find work. | ||
| Social | Soliciting to parents | |
| Child selection or exclusion when maxed out | ||
| Technological | Record keeping – software and hardware | |
| Handling money and processing payments | ||
| Advertising online and using social media | ||
| Environmental | Disposal of diapers | |
| Disposal of other medical related items | ||
| Legal | Parent and child rights | |
| Administration of medications | ||
| Medical certifications (first aid, CPR) | ||
| Licensing and registration in the state of Maryland | ||
| Policies for school closures | ||
| Policies for billing enforcement | ||
| Maintaining the required care provider to student ratio | ||
| Staff member health screening | ||
| Policies for handling discipline problems | ||
| Critical Success Factors | Licensing and certification in the state of Maryland | ||
| Facility up to fire and health code | |||
| Major Activities | Associated Costs | Cost Driver | |
| Supervising children | Labor costs for caregivers | The number of children, factoring required ratios | |
| Managing staff | Salaries of supervisory staff | Number of management staff | |
| Purchasing supplies | Cost of materials (construction paper, crayons) | The number of children | |
| Disposing of waste (diapers, etc.) | Volume of waste | The number of children | |
| Intaking new children | Salaries of admin support staff | Number of admins | |
| Projected Expenses | |
| Employee Costs including benefits | Year One Cost per month |
| Caregiver (Owner) | $ 3,500 |
| Book Keeper – Outsourced | $ 800 |
| Legal – Outsourced | $ 800 |
| Tech Support – Outsourced | $ 250 |
| Wages Subtotal | $ 5,350 |
| Taxes, Fees | $ 803 |
| Subtotal | $ 6,153 |
| Office/Facility | |
| Facility Expense (deductible part of home) | $ 500 |
| Gas/Electric | $ 200 |
| Water | $ 100 |
| Telephone (landline required accessible) | $ 100 |
| Office supplies | $ 500 |
| Property Insurance | $ 208 |
| Maintenance | $ 500 |
| Computers and IT Support | $ 250 |
| Subtotal | $ 2,358 |
| Marketing Costs | |
| Web site hosting and advertising | $ 200 |
| Web site updates | $ 100 |
| Business Cards, Pens, Swag | $ 50 |
| Subtotal | $ 350 |
| Play Area | |
| School Supplies | $ 400 |
| Furniture and decorations | $ 100 |
| Subtotal | $ 500 |
| Projected Monthly Costs | $ 9,361 |