How to Start a Daycare in Tennessee (2026)

Last updated: February 25, 2026

Starting a daycare in Tennessee requires a license from the Tennessee Department of Human Services (DHS) if you care for five or more unrelated children for three or more hours per day. Tennessee’s licensing process involves background checks, facility inspections, staff training requirements, and ongoing monitoring visits. The demand for quality childcare is strong across Nashville, Memphis, Knoxville, and growing suburban communities.

This guide covers every requirement, cost, and step to legally open and operate a daycare in Tennessee, whether you’re starting a home-based childcare program or a full childcare center.

Daycare Requirements in Tennessee at a Glance

Requirement	Agency	Cost	Timeline
DHS Child Care License	Tennessee Department of Human Services	Varies by capacity	3-6 months
Background Checks (TBI/FBI)	TBI / FBI via DHS	~$40-$55 per person	2-4 weeks
LLC Formation	Tennessee Secretary of State	$300 (minimum)	2-5 business days
Federal EIN	IRS	Free	Immediate (online)
Business License (Business Tax)	County/City Clerk	$22 minimum	Same day
Fire Inspection	Local Fire Marshal	Varies	Scheduled during licensing
Liability Insurance	Private insurer	$1,500-$4,000/year	Same day
Workers’ Compensation	Private insurer	Varies by payroll	Same day

How to Start a Daycare in Tennessee (Step by Step)

Step 1: Contact Tennessee DHS Pre-Licensure Unit

The Tennessee Department of Human Services (DHS) licenses child care agencies. Start by contacting the pre-licensure unit:

Email: childcareprelicensure.dhs@tn.gov
Phone: 615-906-0517
Website: DHS Child Care Licensing

When is a license required? A DHS license is required when caring for 5 or more unrelated children for 3 or more hours per day. Caring for fewer than 5 unrelated children or operating for less than 3 hours daily may be exempt, but check current exemption rules as they were updated effective July 1, 2025.

Step 2: Complete Background Checks

Tennessee requires comprehensive background checks for everyone involved in childcare:

Who needs a background check: Owners, operators, all employees, and anyone providing substitute services for more than 36 hours per calendar year while counted in the staff-to-child ratio
Type: TBI (Tennessee Bureau of Investigation) and FBI fingerprint-based criminal history check
Cost: Approximately $40-$55 per person
Disqualifying offenses: Felony convictions involving violence, sexual offenses, drug offenses, and certain misdemeanors
Must be completed before working with children

Step 3: Meet Facility Requirements

Your childcare facility must meet DHS standards:

Indoor Space

Minimum 30 square feet of usable indoor play space per child (not including hallways, bathrooms, kitchens, or storage)
Age-appropriate furniture and equipment
Separate areas for different age groups
Safe sleep environment for infants (firm mattress, no loose bedding)

Outdoor Space

Minimum 50 square feet of usable outdoor play space per child
Fenced outdoor play area (at least 4 feet high)
Age-appropriate playground equipment
Shade areas for sun protection

Health and Safety

Fire inspection by local fire marshal
Working smoke detectors and fire extinguishers
Posted evacuation plan and emergency procedures
Safe drinking water supply
Adequate bathroom facilities (one toilet per 15 children)
Clean and sanitized food preparation area

Step 4: Complete Required Training

Tennessee requires childcare staff to complete training before and during employment:

Pre-Service Training (Before Opening)

Orientation training: DHS-approved orientation for new childcare providers
First Aid certification: Current certification required for all staff
CPR certification: Infant/child CPR for all staff
Age requirement: All caregivers must be at least 18 years of age

Ongoing Training

Annual in-service training hours required for all staff (check current DHS rules for exact hours)
Topics include child development, health and safety, nutrition, positive guidance, and cultural competency
Tennessee TECTA (Tennessee Early Childhood Training Alliance) offers many approved courses

Step 5: Form Your Business Entity and Get Licenses

Tennessee LLC: $300 minimum through TNBEAR
Federal EIN: Free from the IRS
Business license: From county/city clerk ($22 minimum)
Zoning approval: Verify your location is zoned for childcare use

Step 6: Get Insurance

Childcare liability insurance: $1,500-$4,000/year (covers injuries to children, accidents, and negligence claims)
Commercial property insurance: If you own or lease the building
Workers’ compensation: Required at 5+ employees (private carrier)
Abuse and molestation coverage: Often included in childcare liability policies; verify this is covered
Commercial auto: If transporting children ($2,000-$4,000/year)

Step 7: Pass DHS Inspection and Open

Once you’ve completed all requirements, DHS will schedule a licensing inspection. The inspector will verify:

Facility meets all space and safety requirements
All background checks are complete and clear
All training requirements are met
Insurance is in place
Policies and procedures are documented (parent handbook, emergency plans, etc.)

After approval, you’ll receive your child care license. DHS conducts a minimum of 4 monitoring visits per year – 2 announced and 2 unannounced.

Tennessee Star-Quality Child Care Program

Tennessee operates a voluntary quality rating system through the Star-Quality Child Care Program. Providers are rated from 1 to 3 stars based on quality indicators. Higher star ratings can increase your reimbursement rates for families using state childcare assistance and signal quality to prospective parents.

Cost to Start a Daycare in Tennessee

Item	Cost	Notes
Tennessee LLC formation	$300	Annual report also $300/year
Federal EIN	Free	Apply online at IRS.gov
Business license	$22+	Annual, from county/city clerk
Background checks (per person)	$40-$55	TBI/FBI fingerprints; all staff
First Aid/CPR training (per person)	$50-$100	Required for all caregivers
Childcare liability insurance	$1,500-$4,000/year	Based on capacity and coverage
Workers’ comp insurance	Varies	Required at 5+ employees
Facility lease/rent	$1,500-$5,000/month	Varies by location and size
Facility renovations/buildout	$5,000-$50,000	Fencing, safety features, restrooms
Furniture and equipment	$3,000-$15,000	Cribs, tables, chairs, play equipment
Outdoor playground equipment	$3,000-$20,000	Must be age-appropriate
Initial supplies	$1,000-$3,000	Art supplies, books, cleaning, first aid

Estimated total startup cost: $15,000-$30,000 (home-based, small capacity) to $50,000-$150,000+ (commercial center)

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Frequently Asked Questions

Do I need a license to start a daycare in Tennessee?

Yes, if you care for 5 or more unrelated children for 3 or more hours per day. The license is issued by the Tennessee Department of Human Services (DHS). Caring for fewer than 5 unrelated children may be exempt, but exemption rules were updated effective July 2025 – check with DHS for current requirements.

What background checks are required for Tennessee daycare workers?

All owners, operators, employees, and regular volunteers must complete TBI and FBI fingerprint-based criminal history checks before working with children. The cost is approximately $40-$55 per person. Certain felony and misdemeanor convictions are disqualifying.

How much does daycare insurance cost in Tennessee?

Childcare liability insurance typically costs $1,500-$4,000/year depending on your capacity, coverage limits, and services offered. This should include general liability, professional liability, and abuse/molestation coverage. Workers’ comp is additional and required at 5+ employees.

What are the staff-to-child ratios in Tennessee?

Tennessee DHS sets specific staff-to-child ratios based on the age of children in care. Ratios are more restrictive for younger children (infants and toddlers) and become less restrictive for older children. Check the current DHS rules at tn.gov/humanservices for the exact ratios, as they are updated periodically.

How long does it take to get a daycare license in Tennessee?

The entire process typically takes 3-6 months from initial contact with DHS to receiving your license. The timeline depends on how quickly you complete background checks, training, facility preparation, and the inspection process. Starting the pre-licensure process early is recommended.

What is Tennessee’s Star-Quality rating for daycares?

Tennessee’s Star-Quality Child Care Program is a voluntary quality rating system (1-3 stars). Higher ratings indicate higher quality based on staff education, learning environment, and programming. Benefits include higher reimbursement rates for families using state childcare assistance and a marketing advantage with quality-conscious parents.

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About the Author

Robert Smith has run a licensed private investigation firm for 8 years from the Florida-Georgia state line - where he learned firsthand how wildly business licensing rules differ between states just miles apart. He personally researched requirements across all 50 states and D.C., reviewing hundreds of government sources over hundreds of hours to build guides he wished existed when he started. Not a lawyer or accountant - just a business owner who has done the research so you don't have to.

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