How Much Does It Cost To Start A Home Daycare?
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How much does it cost to start a home daycare? Licensing, supplies, insurance, equipment, and ways to save on startup costs. Running a home daycare may be more expensive than you realise.
Starting a home daycare can be one of the most rewarding ways to earn a living while making a difference in the lives of children and families. It also offers the flexibility of working from home and building a business around your family’s schedule.
One of the biggest questions aspiring childcare providers ask is, “How much does it cost to start a home daycare?” The answer depends on your state’s licensing requirements, how many children you plan to care for, and how much equipment you already own.
The good news is that many successful home daycare businesses have started on modest budgets by purchasing only the essentials and adding more materials over time.
Here’s a realistic breakdown of the costs you can expect when starting a home daycare.
Average Cost to Start a Home Daycare
Most home daycare businesses cost between $2,000 and $10,000 to start.
If you’re converting part of your home into a daycare and already have children, your costs may be much lower because you likely own many toys, books, and baby items already.
On the other hand, extensive home renovations or licensing upgrades can increase startup costs significantly.
Business Plan for Home Daycare
If you’d like to plan out your expenses and profit possibilities, check this Home Daycare Business Plan out on Etsy.
Licensing and Registration
Licensing requirements vary by state, so check with your local childcare licensing office before purchasing equipment.
Possible costs include:
- Licensing application fees
- Fingerprinting
- Background checks
- CPR and First Aid certification
- Required training classes
- Health department inspections
- Fire inspections
Estimated cost:
$100–$600
Some states provide free training or reimburse certain expenses.
Liability Insurance
Insurance is one expense you never want to skip.
A quality childcare liability policy protects both your business and your family.
You may also need to notify your homeowner’s insurance company that you’re operating a business from your home.
Estimated annual cost:
$300–$1,200
Safety Equipment
Childproofing your home is one of your biggest startup priorities.
You may need:
- Smoke detectors
- Carbon monoxide detectors
- Fire extinguisher
- Outlet covers
- Cabinet locks
- Baby gates
- Furniture anchors
- Door knob covers
- Emergency exit signs (if required)
- First aid kits
Estimated cost:
$150–$600
Furniture
Your furniture needs depend on the ages of the children you serve.
You may need:
- Child-sized table and chairs
- High chairs
- Cribs or pack-and-plays
- Cots or nap mats
- Storage shelves
- Cubbies
- Bookshelves
Estimated cost:
$500–$2,000
Buying gently used furniture from daycare closures or community sales can save thousands of dollars.
Toys and Learning Materials
This is often where new providers overspend.
Start with open-ended materials children use every day:
- Blocks
- Books
- Art supplies
- Dramatic play items
- Puzzles
- Dolls
- Cars and trucks
- Building toys
- Musical instruments
- Sensory materials
You don’t need hundreds of toys to provide an outstanding learning environment. You just need the right toys that are open-ended and can be used in a variety of ways. And you can build up over time. One thing I have noticed is that if you have too much for kids to do, they get overstimulated and don’t play together well.
Estimated cost:
$300–$1,500
Outdoor Play Equipment
Outdoor play is an essential part of quality childcare.
Consider:
- Balls
- Ride-on toys
- Water table
- Sand table
- Climbing equipment
- Tricycles
- Sidewalk chalk
- Garden tools
- Outdoor storage
Estimated cost:
$300–$2,000
Kitchen Supplies
Depending on whether you provide meals, you may need:
- Child-safe dishes
- Cups
- Utensils
- Serving bowls
- Storage containers
- High-chair accessories
Estimated cost:
$100–$400
At Little Sprouts, we LOVE Replay dishes for kids. And they last forever!
Cleaning Supplies
Keeping a daycare sanitary requires ongoing supplies.
Budget for:
- Disinfectant
- Hand soap
- Paper towels
- Gloves
- Trash bags
- Laundry detergent
- Sanitizing solution
Initial startup:
$100–$250
Curriculum and Educational Materials
If you use a structured curriculum, include those costs.
Expenses may include:
- Lesson plans
- Printing
- Laminating
- Teacher books
- Educational subscriptions
Estimated startup:
$50–$500
Many providers create their own curriculum, saving hundreds of dollars each year.
A Better Way to Teach Through Wonder, Play, and Nature
The Creative Nature Exploration™ Method is more than a curriculum—it’s a fresh approach to early childhood that helps children learn through wonder, play, creativity, and the natural world. Instead of worksheets and rigid lesson plans, you’ll discover how to spark curiosity with simple, meaningful experiences that build school readiness while protecting the joy of childhood. And still helping you balance parent expectations, regulations, and your own sanity.
If you’re ready to create deeper connections, inspire a lifelong love of learning, and make childhood magical again, the Creative Nature Exploration™ Method is the perfect place to begin. Get it here: Creative Nature Exploration™ Method: Seeds of Curiosity Curriculum.
Business Expenses
Don’t forget the business side of running a daycare.
Possible costs include:
- Business license
- Accounting software
- Parent handbook printing
- Contracts and forms
- Website
- Domain name
- Scheduling software
- Parent communication app
- Marketing materials
Estimated cost:
$200–$1,000
Emergency Fund
It’s wise to keep money set aside for unexpected expenses like:
- Appliance repairs
- Replacing broken equipment
- Extra supplies
- Maintenance
Aim for at least:
$500–$1,000
Monthly Operating Costs
After opening, expect recurring expenses such as:
- Food-this is the biggest one
- Utilities
- Insurance
- Craft supplies
- Cleaning products
- Toys and replacements
- Continuing education
- Taxes
- Marketing
These costs vary depending on enrollment and the ages of the children in your care.
Ways to Save Money
You don’t have to buy everything brand new.
Some great ways to reduce startup costs include:
Shop Secondhand
Many daycare providers sell gently used equipment when they retire.
Facebook Marketplace, garage sales, and local resale shops are excellent resources.
Start Small
Purchase only what you need for your first few enrolled children.
Add more materials as your business grows.
Focus on Open-Ended Toys
Children learn more from versatile toys than from expensive electronic toys.
DIY Learning Materials
You can make many educational games using dollar store supplies and recycled materials.
Ask for Donations
Friends and family often have children’s books, toys, and furniture they’d be happy to pass along.
Is Starting a Home Daycare Worth It?
For many providers, absolutely.
Although there are startup costs, a successful home daycare can provide:
- Flexible work hours
- Steady income
- Low overhead compared to commercial centers
- The opportunity to stay home with your own children
- A rewarding career making a difference in children’s lives
With careful planning and smart budgeting, many providers recover their startup costs within the first year of operation.
Frequently Asked Questions
Can I start a home daycare with very little money?
Yes. Many providers begin with the essentials and gradually expand their equipment and learning materials as income grows.
What’s the biggest startup expense?
Furniture and outdoor equipment are often the largest initial investments, especially if you’re caring for infants.
Do I need daycare insurance?
Yes. Liability insurance is highly recommended and is required in many states.
Can I buy used daycare equipment?
Absolutely. Just be sure it meets current safety standards and hasn’t been recalled.
Do I need a separate business bank account?
While requirements vary, having a dedicated business account makes bookkeeping and tax preparation much easier.
Is a curriculum required?
Not always. Licensing requirements vary by state, but having a planned educational program benefits both children and parents.
Starting a home daycare doesn’t have to cost a fortune. With thoughtful planning, smart shopping, and a focus on the essentials, you can create a safe, welcoming, and enriching environment without overspending. Invest first in safety, licensing, and high-quality learning materials, then let your business grow over time.
Remember, families aren’t looking for the fanciest daycare—they’re looking for a provider who is caring, dependable, organized, and committed to helping their children thrive. Those qualities matter far more than having every toy or the newest equipment on day one.
For more information on how to start and run a successful childcare business, check out this book.
