Last updated: May 4, 2026

How to Start a Daycare in Alabama (2026)

Childcare licensing in Alabama runs through the Alabama Department of Human Resources (DHR) – not the Department of Education or a standalone early childhood agency as in many other states. DHR’s Child Care Services Division licenses three facility types: Family Day Care Homes (up to 6 children), Group Day Care Homes (7-12 children), and Day Care Centers (more than 12 children). All require a mandatory pre-licensing orientation before you can even submit an application. Alabama’s staff-to-child ratios vary by age group from 1:5 for infants up to 1:22 for children 8 and older – ratios that are more graduated than many states that stop tracking at “school age.” Licenses are valid for 2 years, and DHR conducts unannounced visits throughout the license period.

Alabama’s childcare market has two distinct demand drivers that set it apart from most Southern states. First, the automotive manufacturing corridor around Tuscaloosa (Mercedes), Montgomery (Hyundai), Lincoln (Honda), and Huntsville (Mazda Toyota) employs thousands of workers on 10-12 hour rotating shifts. These workers need childcare providers who can accommodate non-traditional hours – a niche that conventional 7am-6pm centers cannot serve. Second, UAB Health System (Alabama’s largest employer) and Children’s of Alabama in Birmingham employ healthcare workers whose shift schedules create demand for extended-hours care. Centers near manufacturing plants and hospital campuses that can offer flexible scheduling commands premium rates and have lower vacancy rates.

Daycare Requirements in Alabama at a Glance

Requirement	Agency	Cost	Notes
Pre-Licensing Orientation	County DHR Office	No fee	Required before application submission
DHR Childcare License	Alabama DHR Child Care Services	No published fee	2-year license; unannounced visits
Background Checks (per person)	ABI / FBI / DHR	~$35-$50/person	Required before any staff contact with children
CPR/First Aid (per staff)	ARC, AHA, or equivalent	$50-$100/person	Min. 2 certified staff on site at all times
Fire Safety Inspection	Local Fire Marshal	Varies	Before DHR license issued
Health/Sanitation Inspection	County Health Dept	Varies	Before DHR license issued
LLC Formation	Secretary of State	$236 online	Two-step: name reservation + formation
Municipal Business License	City/County Clerk	$50-$300+	Required in most AL cities
General Liability Insurance	Private carrier	$2,000-$5,000/year	Childcare-specific coverage
Workers’ Comp	Private carrier	Varies	Required at 5+ employees
Federal EIN	IRS	Free	Immediate online

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

Step 1: Form Your Business Entity

Register an LLC with the Alabama Interactive Services portal. File a Certificate of Name Reservation ($28 online), then a Certificate of Formation ($208 online). Total: $236 online. Apply for a free federal EIN at IRS.gov. Get a municipal business license from your city or county – most Alabama cities require this for childcare facilities. If your county has a certificate of occupancy or zoning requirement for childcare uses, verify that before signing a lease on your facility space.

Step 2: Determine Your License Type and Contact DHR

Alabama’s DHR licenses three categories of childcare facilities. Choose based on your planned capacity:

License Type	Capacity	Location
Family Day Care Home	Up to 6 children	Operator’s residence
Group Day Care Home	7-12 children	Operator’s home or separate facility
Day Care Center	More than 12 children	Non-residential facility

Contact your county DHR office to request a licensing packet and schedule your mandatory pre-licensing orientation. This orientation is a DHR requirement; you cannot submit a license application without attending it. The orientation covers licensing standards, the application process, and what DHR inspectors look for during facility reviews.

DHR has 67 county offices aligned with Alabama’s 67 counties. Your primary licensing contact is the county office where your facility is located, not a regional or central office. Wait times for pre-licensing orientations vary by county – busy urban counties like Jefferson (Birmingham), Madison (Huntsville), and Mobile can have orientation sessions scheduled several weeks out. Plan this as your first step, not your last.

Step 3: Prepare Your Facility

Space Requirements

Alabama DHR’s minimum space standards for childcare facilities:

• Indoor usable floor space: Minimum 35 square feet per child. This measurement excludes hallways, bathrooms, kitchens, storage areas, and offices – only space where children actively spend time counts.
• Outdoor play area: Minimum 50 square feet per child of usable play space. The area must be fenced at a minimum height of 4 feet, free of hazards, and accessible from the childcare area.
• Separate area for children under 2.5 years: Children under 2 years 6 months must be in a separate area from older children. This is a DHR requirement under Ala. Admin. Code r. 660-5-20. Plan your floor plan accordingly before selecting a facility.

Safety and Facility Standards

• Working smoke detectors and fire extinguishers on every floor
• Emergency evacuation plan posted in every room used by children
• All cleaning chemicals, medications, and hazardous materials locked and inaccessible to children at all times
• Electrical outlets covered in all areas used by children
• All furniture, equipment, and toys age-appropriate and in safe condition
• Handwashing facilities accessible to children at sinks appropriate to their height
• If the facility has a swimming pool: must be fenced with self-closing, self-latching gates; children must have constant adult supervision in and near the pool

Food Service Requirements

If you prepare and serve meals on-site, your kitchen must meet county health department food safety standards. Meals and snacks must follow USDA Child and Adult Care Food Program (CACFP) nutrition guidelines. CACFP also provides meal reimbursements to qualifying childcare providers – this is a significant revenue stream for many Alabama daycare centers. Contact your county DHR office for information about CACFP enrollment, which is administered federally through the USDA but managed at the state level through DHR.

Step 4: Complete Background Checks for All Staff

Alabama requires comprehensive background screening for every person who has contact with children at a licensed facility. There are no exceptions for part-time staff, volunteers, or family members of the operator. Background checks must be completed and cleared before the individual begins working with children.

Required screenings:

• Alabama Bureau of Investigation (ABI) criminal history check – state criminal records
• FBI fingerprint check – federal criminal history; requires fingerprinting at an approved site
• Alabama Sex Offender Registry check – mandatory disqualifier for any registered sex offense
• Alabama Central Registry check – screens for substantiated findings of child abuse or neglect in the DHR system

Cost: approximately $35-$50 per person for fingerprinting and processing fees. Disqualifying offenses include felony convictions, sex offenses, child abuse or neglect findings, and certain violent misdemeanors. If an applicant has lived in other states within the past 5 years, out-of-state checks may also be required. Contact your county DHR office for current background check submission procedures, as the process and vendors used may vary by county.

Step 5: Meet Director and Staff Requirements

Director Qualifications

The director of an Alabama Day Care Center must meet the following minimum qualifications:

• Minimum age: 21 years old
• Education: High school diploma or GED
• Pre-service training: DHR-approved orientation (which you completed in Step 2) and any additional pre-service training requirements specified for your facility size
• Experience: For larger centers, DHR may expect relevant experience in childcare or early childhood education; requirements scale with facility size

Family Day Care Home operators must be at least 19 years old. Group Day Care Home operators: minimum 19 years old for the home-based category. Contact your county DHR office for the current minimum standards document (Ala. Admin. Code r. 660-5-22) that specifies requirements for your specific license type.

Staffing Requirements

Alabama DHR requires a minimum of two staff members who are at least 18 years of age and who hold current CPR and First Aid certifications to be present whenever children are in care. This two-adult minimum applies regardless of the group size – even if you have only one child enrolled during a given hour, two qualified staff must be present. This standard is more stringent than some states that require a two-adult minimum only above certain enrollment thresholds.

All staff must complete a minimum of 12 clock hours of annual in-service training. Required training topics include child development and learning, health and safety practices, nutrition, positive guidance and discipline, and inclusion practices for children with special needs. Training must be from DHR-approved providers or sources.

Step 6: Meet Staff-to-Child Ratios

Alabama’s staff-to-child ratios are set by Ala. Admin. Code r. 660-5-20-.04 and apply at all times, including during outdoor play, field trips, and rest periods:

Age Group	Staff-to-Child Ratio	Notes
Birth to 18 months (infants)	1:5	Must be in separate area from older children
18 months to 2 years 6 months (toddlers)	1:7	Must be in separate area from older children
2 years 6 months to 4 years (preschool)	1:11	Can be in mixed-age group if all are 2.5-4
4 years to school age (pre-K)	1:18	Includes children who turn 5 before kindergarten
School age to 8 years	1:21	Covers kindergarten-age through 2nd grade
8 years and older	1:22	After-school and summer programs

During napping and rest periods, Alabama allows relaxed ratios for children 18 months and older, but the ratio for infants remains at 1:5 even during sleep. Ratios must be maintained at all times, including during transitions, outdoor time, and field trips away from the facility. If your staff is short one person during a ratio period, you cannot legally exceed the permitted group size for the remaining staff.

Step 7: Pass Inspections and Receive Your License

Before your DHR license is issued, your facility must pass three separate inspections:

1. Fire safety inspection – conducted by your local fire marshal or fire prevention bureau. The inspector verifies fire exits, fire extinguishers, smoke detectors, emergency lighting, and evacuation plan posting.
2. Health/sanitation inspection – conducted by the county health department. Verifies food safety practices, handwashing facilities, restroom conditions, and sanitation standards.
3. DHR facility inspection – conducted by a DHR licensing representative. Comprehensive review of facility compliance with all Minimum Standards requirements including space, safety, staffing documentation, and policies.

Once all inspections pass and your documentation package is complete, DHR issues your license for a 2-year period. DHR conducts unannounced inspections at least once annually during the license period. Violations found during unannounced visits must be corrected within timeframes set by DHR; repeated violations can result in license probation, suspension, or revocation. Keep all staff files, background check records, training logs, and inspection reports current and accessible during operating hours.

Alabama Quality STARS

Alabama Quality STARS is Alabama’s voluntary quality rating and improvement system (QRIS) for childcare providers, administered through DHR. Participating providers receive quality ratings that are visible to parents searching for childcare. Higher-rated facilities can become eligible for bonus payments through Alabama’s Child Care Assistance Program (CCAP) – parents with CCAP vouchers who select higher-rated providers may have more subsidy available, and the provider receives a quality differential payment above the base subsidy rate.

While participation in Alabama Quality STARS is voluntary, enrollment makes business sense if you plan to serve CCAP subsidy recipients. The automotive shift-worker and healthcare worker families described above are disproportionately in the income range that qualifies for CCAP assistance. Learn more about Alabama Quality STARS enrollment through DHR’s childcare portal.

Child Care Assistance Program (CCAP)

Alabama’s Child Care Assistance Program (CCAP) provides childcare subsidies to qualifying low-income working families. DHR administers the program. To accept CCAP vouchers, your facility must be licensed by DHR and complete CCAP vendor enrollment. CCAP reimbursement rates are set by DHR and vary by age group and geographic area. Accepting CCAP expands your potential client base significantly, particularly in Birmingham, Mobile, and Montgomery, where a large percentage of families working in service industries and manufacturing qualify for assistance.

Alabama Childcare Market: Where the Demand Is

Huntsville and Madison County: Alabama’s fastest-growing metro and the state’s strongest market for new childcare capacity. Rapid residential development in Harvest, Meridianville, and northern Madison County has created neighborhood-level childcare shortages. The concentration of dual-income professional households in the defense and tech sector creates demand for premium-quality programs. MTMUS employees at the Mazda Toyota plant work rotating shifts, creating specific demand for extended-hours and non-standard-schedule care.

Birmingham metro: Alabama’s largest market. UAB Hospital, Children’s of Alabama, and Grandview Medical Center collectively employ tens of thousands of healthcare workers. The healthcare workforce has high rates of shift work, creating demand for centers with early opening (5:30-6am) and late closing (8-9pm) hours. Many Birmingham-area daycare centers maintain waiting lists for infant spots, where the 1:5 ratio limits capacity and where demand consistently outpaces supply.

Montgomery: The Hyundai plant’s workforce and the state government employment base both create childcare demand. The state government workforce is primarily 8am-5pm, Monday-Friday, making Montgomery’s childcare market more predictable in scheduling than manufacturing-adjacent markets. Hyundai CCAP-eligible workers seeking licensed care near the plant represent a consistent B2C market.

Mobile and Baldwin County: Baldwin County’s rapid residential growth (fastest-growing county in Alabama) is creating childcare capacity shortages in communities like Fairhope, Daphne, and Spanish Fort. The coastal tourism economy – particularly in Gulf Shores and Orange Beach – creates summer demand for drop-in and seasonal care, which requires careful licensing and ratio compliance even for intermittent-use facilities.

Tuscaloosa: University of Alabama graduate students, faculty, and staff create demand for infant and toddler care at rates above the general population. The Mercedes plant workforce adds manufacturing shift-work demand. University-affiliated childcare options have historically been limited relative to the student and faculty population.

Cost to Start a Daycare in Alabama

Item	Cost	Notes
LLC Formation	$236	$28 name reservation + $208 formation online
Municipal Business License	$50-$300	Varies by city/county
Background Checks (per staff)	$35-$50/person	ABI + FBI + registry checks
CPR/First Aid Certifications	$50-$100/person	Min. 2 certified staff required at all times
Facility Lease (first + last + deposit)	$2,000-$8,000	Commercial space; varies by location
Facility Renovation and Buildout	$5,000-$30,000	Fencing, infant room separation, playground
Furniture and Equipment	$3,000-$10,000	Cribs, age-appropriate tables, chairs, mats, toys
Playground Equipment	$2,000-$15,000	Outdoor play structures plus required fencing
General Liability Insurance	$2,000-$5,000/year	Childcare-specific policy required
Workers’ Comp	Varies	Required at 5+ employees; NCCI code 9059
Initial Supplies	$1,000-$3,000	Cleaning, diapers/wipes, food, crafts
Marketing	$500-$2,000	Website, signage, local advertising
Federal EIN	Free	Apply online at IRS.gov

Estimated total startup cost: $20,000-$75,000 depending on facility type, size, and location. Family Day Care Homes have the lowest startup costs; Day Care Centers in commercial space require the most capital.

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Frequently Asked Questions

How do I get a daycare license in Alabama?

Contact your county DHR office to request a licensing packet and schedule the mandatory pre-licensing orientation. After the orientation, submit your application with documentation of facility readiness, staff background checks, and training. Pass fire safety, health, and DHR facility inspections. The full process typically takes 3-6 months from first contact to license issuance. DHR issues 2-year licenses and conducts unannounced visits throughout the license period.

What are the staff-to-child ratios for Alabama daycares?

Alabama DHR ratios under Ala. Admin. Code r. 660-5-20-.04: infants (birth-18 months) 1:5; toddlers (18 months-2.5 years) 1:7; preschool (2.5-4 years) 1:11; pre-K (4 years to school age) 1:18; school age to 8 years 1:21; 8 years and older 1:22. Ratios apply at all times. A minimum of two staff with current CPR/First Aid certification must be present whenever children are in care, regardless of enrollment level.

What background checks are required for Alabama daycare staff?

All staff with child contact must complete: ABI criminal history check, FBI fingerprint check, Alabama Sex Offender Registry check, and Alabama Central Registry (child abuse/neglect) check. Cost is approximately $35-$50 per person. Checks must be completed and cleared before the individual begins working. If staff lived in other states in the past 5 years, out-of-state checks may also be required. No exceptions for part-time staff, volunteers, or the director’s family members.

Does Alabama require childcare directors to have a degree?

Alabama DHR’s minimum standard for a Day Care Center director is a high school diploma or GED plus meeting age and experience requirements. The minimum age is 21. For larger centers, DHR may expect relevant childcare experience or early childhood education coursework, but a college degree is not a minimum requirement under the current Minimum Standards. Contact your county DHR office for the current requirement document specific to your facility size and type.

What is Alabama Quality STARS?

Alabama Quality STARS is the state’s voluntary quality rating and improvement system (QRIS) for licensed childcare providers, administered through DHR. Participating providers receive visible quality ratings that parents can see when choosing care. Higher-rated facilities become eligible for bonus payments through the Child Care Assistance Program (CCAP) and may attract families with quality-conscious preferences. Participation is voluntary but strategically beneficial for centers targeting CCAP subsidy recipients.

How much does it cost to start a daycare in Alabama?

Startup costs range from $20,000-$75,000 depending on facility type and location. A Family Day Care Home in the operator’s residence has the lowest entry cost ($5,000-$15,000 for equipment, background checks, and certification). A Day Care Center in commercial space requires the most capital: facility lease and renovation ($7,000-$38,000), equipment ($3,000-$10,000), playground ($2,000-$15,000), insurance ($2,000-$5,000/year), and staff certification and background checks ($85-$150 per person for the initial team).