Launching a home daycare is a rewarding way to earn income while caring for your own children—but it does require an up‑front investment. The exact amount depends on your state or provincial regulations, the ages you plan to serve, and the materials you already own. Below you’ll find a realistic, regulation‑focused checklist of potential daycare start-up costs—plus frugal hacks to keep each line item in check.
Regulatory Reminder: Not every jurisdiction requires every cost listed here. Always consult your local licensing agency before you buy.
How much money does it cost to start a home daycare business?
Starting a home daycare business can be a great way to earn extra income while working from home. However, there are a few costs to consider before getting started. The first and most obvious cost is the purchase of supplies, such as cribs, high chairs, toys, and educational materials. You will also need liability insurance to protect yourself in case of an accident. Furthermore, you may need to obtain a business license from your city or county. The cost of these items can vary depending on where you live. However, with some careful planning, it is possible to start a home daycare business for less than $1,000.
What To Consider Before Starting a Home Daycare
What Are Some Of The Initial Daycare Start-Up Costs You’ll Need To Cover
Supplies and Equipment
When opening a home daycare, there are several supplies and pieces of equipment that you will need in order to create a safe and welcoming space for children. First, you will need a supply of age-appropriate toys and games. It is also important to have ample storage space for these items, as well as for art supplies, books, and other materials. Regarding furniture, you will need several child-sized tables and chairs, as well as shelving or bins for storing toys and materials. You will also need to childproof your home, which may involve installing safety gates, outlet covers, and cabinet locks. Finally, you will need to create an outdoor play area with age-appropriate playground equipment. You can provide your children with a safe and nurturing environment by gathering the necessary supplies and equipment.
Safety Gear
- Smoke & CO Detectors – One per floor; test monthly.
- Fire Extinguisher (ABC‑rated) – Recharge or replace annually.
- Baby Gates – Secure the top and bottom of every staircase.
- Outlet Covers – Cap every unused plug within reach.
- First‑Aid Kit & Non‑Latex Gloves – Restock quarterly.
Budget tip: Shop at big-box membership stores for multi-packs of detectors and outlet covers. Many local fire departments offer free safety inspections—sometimes even free detectors.
Playroom Essentials
- Manipulatives – Blocks, shape sorters, puzzles. Spend smart: Choose wood or heavy‑duty plastic for longevity.
- Dramatic Play – Toy kitchen, dress‑up trunk. Spend smart: Thrift shops and post‑Halloween sales are costume goldmines.
- Art Supplies – Crayons, washable markers, and reams of paper. Spend smart: Stock up during back‑to‑school clearance events.
- Books – Board books for infants, picture books for pre‑Ks. Spend smart: Rotate library loans to stretch your collection.
- Sensory Bins – Playdough, sand, rice. Spend smart: DIY playdough and store in repurposed food containers.
- Duplicate Faves – Two or three of the most‑requested toys. Spend smart: Prevent toddler turf wars—and broken toys.
Meal‑Time Equipment
- Child‑Size Plates, Cups & Cutlery – Lightweight, BPA‑free.
- Child‑Size Tables & Chairs – Adjustable height extends life span.
- High Chairs / Infant Feeding Seats – Check recall lists before buying used.
- Washable Bibs – Label and rotate daily.
Budget tip: Stackable tables and chairs free floor space and resell easily when you upgrade.
Admin & Operations
- Bulletin Board – Display license, daily menu, lesson plan.
- Laptop or Desktop Computer – Enrollment, billing, parent communication.
- Printer & Paper – Contracts, newsletters, activity sheets.
- Office Supplies – Pens, labels, stapler, laminator pouches.
- Filing System – Lockable cabinet or secure cloud storage.
- Phone – Voicemail for parent inquiries and a charged device for emergencies.
Budget tip: Childcare‑management apps generate digital forms and invoices, cutting printing costs.
The Ultimate List of Home Daycare Supplies
First Aid Courses, Police Checks, and Additional Insurance
Several important requirements must be met for those interested in starting a home daycare. Potential daycare providers must complete a First Aid course and obtain a Police Check. They must also secure additional insurance coverage beyond what is typically provided by a homeowner’s policy. While these requirements may seem daunting, they are essential for ensuring the safety of the children in your care. By taking the necessary steps to meet all of the requirements, you can provide families with peace of mind, knowing that their children are in good hands.
License & Regulatory Fees
- Background check & fingerprinting – Criminal‑record search for all household adults. Money‑saver: Some states subsidize part or all of the fee—ask before you schedule.
- Medical clearance & TB test – Proof you’re healthy and immunized. Money‑saver: Community health clinics often charge less than private labs.
- Home safety & fire inspection – Code compliance sign‑off. Money‑saver: Do a self‑audit first; fix obvious issues before the inspector arrives.
- Water‑quality test (well systems only) – Lead and bacteria screening.
- Liability insurance – Protects you, the kids, and their families. Money‑saver: Compare group‑policy rates through family‑child‑care associations.
Do you need home daycare insurance?
Marketing Costs
Starting a home daycare can be a rewarding experience, allowing you to work from home while caring for children. However, before starting to operate, you may need to obtain the necessary licenses and create a marketing plan. Marketing costs can add up quickly, but there are a few ways to save money. One option is to create your own marketing materials, such as flyers and business cards. You can also get the word out by networking with other parents and posting on online parenting forums. In addition, consider partnering with local businesses that serve families with young children. For example, you could offer discounts to customers of a nearby preschool or daycare center. You can keep your marketing costs low by taking a few simple steps while still attracting new clients.
Do home daycare businesses have tax implications?
Starting a home daycare business can be a great way to earn extra income. Still, it’s critical to be aware of the tax implications. In most cases, you will need a business license and pay business and/or income taxes. Fortunately, you can deduct some of your expenses, such as the cost of food and supplies, from your taxes. However, you’ll need to keep accurate records of your expenses in order to take advantage of this deduction. Understanding the tax implications of starting a home daycare business can help ensure that your business is successful and profitable.
Are there any government subsidies or grants available for home daycare providers?
While many government subsidies and grants are available for childcare providers, the amount of funding available for home daycare providers is quite limited. In most cases, subsidies and grants are only available for licensed childcare facilities that meet certain safety and quality standards. However, there are a few programs that home daycare providers may be eligible for. Check with your local state/country government to see if you qualify for subsidy programs.
A Comprehensive Guide To Home Daycare Grants
How To Save On Daycare Start-Up Costs
When starting a home daycare, there are many costs to consider. You will need to purchase supplies like furniture, toys, and equipment. Additionally, you will need to ensure that your home is a safe and comfortable place for young children. However, there are ways to save money on your start-up costs. One way is to shop secondhand for supplies. You can often find gently used toys and furniture at consignment shops or online marketplaces. Another way to save money is to take advantage of free resources. Many community organizations offer free classes on child care, and you can also find helpful tips and advice online. By being mindful of your start-up costs, you can make starting a home daycare more affordable.
10 Tips On How To Save Money On Toys
7 Ways to Slice Your Start‑Up Budget
- Audit Your Home First – Make a room‑by‑room list before shopping.
- Prioritize Must‑Haves – Safety and licensing requirements come before décor.
- Buy in Phases – Add specialty toys after revenue starts flowing.
- Tap Secondhand Networks – Consignment stores, swap groups, retiring providers.
- Negotiate Bulk Discounts – Detectors, art supplies, outlet covers often cost less in multi‑packs.
- Repurpose Household Items – Clear bins become sensory tubs; low bookshelves double as cubbies.
- Track Every Expense – Many start‑up purchases are tax‑deductible; receipts matter.
Although the monetary amount may seem daunting initially, remember that this is an investment in your future business. By planning ahead and being mindful of potential expenses, you can be one step closer to starting a successful home daycare. Have you recently gone through the process of starting a home daycare? What were some of the hidden daycare start-up costs that you weren’t expecting? Share your experience in the comments below!
Start Your Daycare Business Plan Today!
