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 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
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