Selecting child care as your profession and your business is a serious decision. As a child care provider you have a tremendous opportunity to teach and care for young children, support your community and shape the future. But you will first want to make sure that opening a child care business is best for you and your family and what is needed in your community.

Before you invest money in a child care business, you’ll want to do a bit of thinking and research to be certain that opening a new child care business is the right choice for you, personally and professionally. This page will help you consider your own reasons for opening a child care business and to learn more about how to determine the need in your community.


Below are some things you will want to consider about your why you’re interested in opening a child care business. Do any of the considerations below factor into your choice? Which type of child care business makes the most sense for your situation?

Personal Considerations

  • Your passion is for helping young children and their parents.
  • You enjoy being with young children and have the patience necessary to care for them for many hours each day.
  • The independence and responsibility of being your own boss is something that you enjoy.
  • You have the time, knowledge, skills and motivation to make a small business succeed.
  • You’ve met the necessary education and training requirements for child care providers in your state, or
  • You have the time to learn the skills you need or you are willing to hire people to provide the skills you lack. Learn more about the child care regulations in your state.
  • You’re comfortable with the financial risk involved until your business gets established.

Family Considerations

  • The income from a child care business can help support your family.
  • You can save on your own child care costs.
  • You can be home with and care for your own children.
  • If you are considering a home based child care business, your home is designed in a way that supports child care and meets the requirements for your state. 

Supporting Other Families

  • You can help parents support their families by making more child care available
  • Parents need to know that their children are in a safe, healthy and learning environment. A quality child care program offers peace of mind to parents so they can focus on their work.
  • If your child care program offers flexible hours, you can support parents who have nontraditional work schedules.
  • If your child care program cares for mildly ill children or children with chronic health issues, parents can know their child is in good care while they are at work. 

Community Need

  • You help local businesses by supporting workers who need child care.
  • Your small business supports the local economy by making purchases, buying services, paying taxes and paying salaries.
  • Your community may be lacking certain types of child care, such as care for infants and toddlers, school-age children, mildly ill children, or children with special needs.
  • Local schools need children to start Kindergarten prepared to learn. Quality child care programs focus on teaching children what they need to know to be ready to start school.

Assess Your Readiness

First Children’s Finance offers a valuable tool to help you think about these considerations in a deeper way: Are You Ready to Start a Child Care Business? – Assess Your Strengths and Weaknesses as a Potential Business Owner

Next Steps

Once you have decided that opening a child care business is right for you, you will want to make sure that you are opening your business in an area where there is a demand for a new child care center or child care home. This process is known as a Needs Assessment. Here are some things to consider as part of your needs assessment.

Planning for Success has resources to help you answer some of these questions.

  • Who else is providing child care in your area?
  • Who are your main competitors?
  • How many families with young children live in your area?
  • How many of them will need child care?
  • Is there a need for child care for a specific age group?
  • Is the need for child care in your area likely to change in the next 5-10 years?
  • Where do local parents work?
  • How long is the typical commute?
  • What are the typical hours that parents work?
  • What are the typical fees (the market rate) for child care in your area?
  • Do parents in your area typically get help (subsidies) to pay for child care?
  • Will your program be eligible to accept subsidies?
  • How much will it cost you to start a new child care business or purchase an existing child care center?
  • How much will it cost you to operate a program on an ongoing basis?
  • Based on the number of children you plan to enroll, what is your per child cost?
  • What fees do you need to charge parents in order to have a profitable program? Can parents in your area afford those fees?
  • How will your program attract parents?
  • What will make your business special?
  • Is there a family child care provider network you can join that will help with marketing, billing and curriculum?
  • Is there a center director support group where you can get information about issues such as marketing, staffing, curriculum and billing?
  • Can you partner with other child care programs? Are there providers that offer part-day programs? Are there other groups that sponsor child care programs?

Sources for Data

In order to complete your needs assessment, you will likely need more information, or data, about your local area. Here are some suggestions on where to find this important data.

Additional Resources

  • Your local Child Care Resource and Referral (CCR&R) agency may be able to provide additional supports for opening a child care business, becoming licensed and may offer training to meet the requirements in your state. They may also be able to connect you to other local resources. Search for your local Child Care Resource & Referral agency, or call us at 1(800) 424-2246 to find out more about Child Care Resource and Referral agencies and how to connect with yours! 
  • Feasibility Studies for Child Care Centers
    By White Hutchinson Leisure & Learning Group