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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.
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 |