Best States to Open a Daycare (2026): All 51 Ranked

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Child care is one of the few industries where demand is nearly guaranteed — the question is whether the market you enter is already saturated and what staffing will cost you. Census data shows Nevada operating with just 12 licensed child care establishments per 100,000 residents while Maine carries 48 — and staffing costs per employee vary by tens of thousands of dollars a year between states.

We ranked every state on four measures from federal data: how crowded the child care market is, average payroll per center, what child care labor costs, and how fast new businesses are forming in the state. Growth-state results are striking: the top of this list is dominated by states adding young families fastest.

The Top 10 States

Rank State Establishments Firms per 100k Payroll per firm Pay per employee New biz apps per 1k*
1 Florida 4,651 19.9 $400k $28,765 30.3
2 Nevada 400 12.2 $437k $29,336 21.1
3 Georgia 2,449 21.9 $431k $26,041 24.8
4 Arizona 965 12.7 $445k $31,121 20.4
5 Colorado 1,239 20.8 $460k $34,094 27.5
6 New Mexico 449 21.1 $464k $31,971 20.5
7 Texas 6,242 19.9 $379k $25,941 18.8
8 Delaware* 349 33.2 $398k $28,193 58.0
9 New Jersey 2,466 26.0 $513k $30,386 18.2
10 Utah 745 21.3 $256k $24,548 23.8

Deep-dive guides for the leaders: how to start in Florida · how to start in Nevada · how to start in Georgia · how to start in Arizona · how to start in Colorado.

How We Ranked the States

Each state is scored on four factors, standardized as z-scores and weighted. Higher is better for revenue and momentum; lower is better for competition and labor cost.

  • Market saturation (30%) — establishments per 100,000 residents in NAICS 624410 (Child Care Services), U.S. Census Bureau County Business Patterns, 2023. Fewer competitors per capita scores higher.
  • Payroll per establishment (25%) — annual payroll divided by establishment count, same source. A proxy for how much paid work the average firm supports.
  • Labor cost (20%) — annual payroll per employee in the industry, same source. Cheaper labor scores higher for a new owner-operator.
  • New-business momentum (25%) — business applications per 1,000 residents, Aug-2025 through Jul-2026, U.S. Census Bureau Business Formation Statistics. Values are capped at the 5th–95th percentile before scoring (see footnotes).

Population denominators use Census Bureau 2024 state population estimates. The weights are editorial judgment — we publish every underlying number in the table so you can re-rank by whichever factor matters most to your daycare.

Footnotes: *Wyoming and Delaware business-application counts are heavily inflated by non-resident LLC filings routed through registered agents; we cap their momentum factor before scoring and show the raw number in the table. †District of Columbia is a city-scale market and behaves unlike full states on density and payroll measures.

All 51 States and DC, Ranked

Rank State Establishments Firms per 100k Payroll per firm Pay per employee New biz apps per 1k*
1 Florida 4,651 19.9 $400k $28,765 30.3
2 Nevada 400 12.2 $437k $29,336 21.1
3 Georgia 2,449 21.9 $431k $26,041 24.8
4 Arizona 965 12.7 $445k $31,121 20.4
5 Colorado 1,239 20.8 $460k $34,094 27.5
6 New Mexico 449 21.1 $464k $31,971 20.5
7 Texas 6,242 19.9 $379k $25,941 18.8
8 Delaware* 349 33.2 $398k $28,193 58.0
9 New Jersey 2,466 26.0 $513k $30,386 18.2
10 Utah 745 21.3 $256k $24,548 23.8
11 South Carolina 1,042 19.0 $354k $27,092 18.7
12 Tennessee 1,242 17.2 $338k $24,956 15.9
13 Connecticut 948 25.8 $544k $31,214 14.8
14 Kentucky 925 20.2 $317k $23,578 16.6
15 Virginia 1,977 22.4 $402k $28,461 16.9
16 Arkansas 728 23.6 $418k $25,982 14.6
17 Kansas 583 19.6 $341k $24,185 14.4
18 North Carolina 2,612 23.6 $378k $27,665 17.9
19 Louisiana 1,040 22.6 $297k $23,077 17.7
20 Missouri 1,463 23.4 $358k $27,906 18.5
21 Mississippi 808 27.4 $280k $22,890 20.9
22 Alabama 988 19.2 $319k $25,880 15.0
23 Maryland 1,505 24.0 $424k $31,792 17.3
24 Michigan 2,090 20.6 $313k $26,842 16.5
25 Ohio 2,813 23.7 $350k $25,966 15.5
26 Illinois 3,138 24.7 $449k $33,359 15.6
27 Oklahoma 1,055 25.8 $294k $25,154 16.9
28 Indiana 1,435 20.7 $291k $26,232 14.2
29 Minnesota 1,473 25.4 $415k $29,990 13.2
30 Alaska 173 23.4 $362k $32,908 17.2
31 Idaho 504 25.2 $230k $24,244 18.2
32 Rhode Island 279 25.1 $431k $29,806 11.3
33 South Dakota 280 30.3 $318k $22,216 14.3
34 Hawaii 267 18.5 $364k $33,696 12.9
35 Iowa 895 27.6 $309k $21,205 11.6
36 West Virginia 407 23.0 $292k $23,663 10.4
37 Wyoming* 245 41.7 $222k $24,719 145.0
38 District of Columbia 303 43.1 $589k $41,669 22.5
39 Wisconsin 1,588 26.6 $342k $28,585 13.3
40 Pennsylvania 3,823 29.2 $349k $28,533 12.8
41 New York 6,702 33.7 $436k $34,560 16.2
42 Massachusetts 2,309 32.4 $510k $36,239 11.9
43 New Hampshire 447 31.7 $359k $29,388 14.0
44 Montana 488 42.9 $170k $24,650 28.4
45 California 9,670 24.5 $345k $37,322 15.3
46 Nebraska 739 36.9 $301k $23,351 12.1
47 Washington 2,386 30.0 $338k $35,223 14.7
48 Oregon 1,517 35.5 $299k $33,986 14.9
49 Vermont 272 41.9 $328k $32,057 12.8
50 North Dakota 374 47.0 $244k $23,282 12.2
51 Maine 674 48.0 $236k $30,350 10.7

What the Numbers Don’t Capture

No dataset measures licensing difficulty, insurance mandates, or fee structures — and those vary enormously by state. Our state-by-state guides cover exactly that layer: click any state in the table for its full startup walkthrough, or see the overall Best States to Start a Business index and the monthly business formation statistics this index draws on.

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Wherever you land, the first filing is the same

Every state on this list starts a daycare the same way: form the business entity. Bizee files your LLC — you pick the package and pay the state fee in any of the 51 jurisdictions ranked here.

Start my LLC →

Frequently Asked Questions

What is the best state to start a daycare in 2026?

By our four-factor Census-data index, the top five are Florida (#1), Nevada (#2), Georgia (#3), Arizona (#4), Colorado (#5). Florida leads on the combination of market saturation, payroll per firm, labor cost, and new-business momentum.

Which state has the least daycare competition?

Nevada has the thinnest market, with 12.2 establishments per 100,000 residents in NAICS 624410 — versus 48.0 in Maine, the most saturated.

Where does this data come from?

Every number is from the U.S. Census Bureau: County Business Patterns 2023 for establishments, employment, and payroll; Business Formation Statistics (Aug-2025 through Jul-2026) for new business applications; and 2024 population estimates for per-capita rates.

Sources

Data Source Vintage
Establishments, employment, payroll by industry and state U.S. Census Bureau, County Business Patterns 2023
Business applications by state U.S. Census Bureau, Business Formation Statistics Aug-2025 through Jul-2026
State population U.S. Census Bureau, Population Estimates (NST-EST2024) 2024