How to Start a Daycare: Licensing Requirements by State (2026)

Updated September 28, 2026

To start a daycare, choose a home-based or center-based model, confirm the licensing path and suitable premises, and build a plan for staffing, costs and enrollment. Then put your business registration, insurance, family agreements and tuition collection in place before opening.

This guide walks through the national setup process. The state selector is near the bottom for the local requirements that apply to your program.

Some provider links below are affiliate links. We may earn a commission if you use them. Paid services are optional; they do not replace the approvals, checks or training your program requires.

1. Choose a home daycare or a child care center

Define whom you will serve before shopping for equipment or advertising spaces. Decide on the age range, hours, days of operation and whether you will offer meals, transportation or care outside a standard workday. Those choices affect staffing, premises, insurance and the prices your business needs to charge.

Home-based child care

Plan around the parts of your home that can be used for care, household routines, outdoor space and backup help. Ask the licensing agency how household members and your own children affect the applicable checks, capacity and supervision rules.

Center-based child care

Plan for rooms, age groups, qualified leadership, staff coverage and premises that can be approved for the intended use. A larger number of spaces also means more responsibility for payroll, facilities and enrollment.

List nearby programs serving the same ages and hours, then speak with prospective families about what they need. Interest in your idea is useful research; it is not yet paid enrollment. Build a launch plan that still works if families join gradually.

Have ready: your care model, intended ages, opening hours, services and a realistic description of the families you plan to serve.

2. Check the licensing path before committing to premises

Contact the child care licensing authority early. Explain your proposed care setting, ages, hours and location, and ask which license, registration or exemption category applies. A small program or a program operating from a home is not automatically exempt. ChildCare.gov explains how licensing and exemptions differ.

Ask about orientation, the application sequence, required documents, inspections and when you may begin operating. Start those steps early enough to learn about problems before setting a firm opening date. The state guides near the bottom help you find the relevant agencies.

Check permitted use, occupancy and required building, fire or health approvals before signing an unconditional lease or paying for major alterations. Review the proposal with the relevant local offices and the licensing agency. A landlord’s willingness to rent the space does not confirm that it can be approved for child care.

For a home program, check applicable zoning and property restrictions as well as the licensing rules. Our childcare zoning research provides context, but obtain a current answer for the actual property.

Have ready: the correct application route, a premises feasibility check and a list of approvals and changes needed before opening.

3. Set up the business name, tax ID and banking

Choose the legal operator and business structure before filing documents that need to agree with one another. A sole proprietorship, LLC or corporation has different ownership, tax and administrative implications. An LLC is a business-structure choice; it is not permission to operate a daycare.

Check name availability and any assumed-name requirements, then coordinate the operator name across registration, the child care application, lease, bank account and insurance. Keep approved documents and renewal dates together.

Want help with an LLC? ZenBusiness offers an online filing service. Review the selected package, state fees and any recurring services before ordering.

Explore LLC filing with ZenBusiness

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You can also file directly through the relevant state office. Use the state guide below and the SBA registration lookup to find the right starting point. Check any separate local approvals through our business license directory.

The IRS provides EINs free and explains who needs one. If forming an LLC or corporation, form it with the state before applying for its EIN. Ask your bank which documents it needs, and set up separate business records for tuition, deposits, expenses, payroll and taxes.

Have ready: consistent operator details, applicable business filings and tax accounts, a bank account and a bookkeeping routine.

4. Price care around realistic enrollment and staffing

Build two budgets: one for getting open and one for operating each month. Startup items may include approved premises work, deposits, application costs, furniture, learning materials and opening supplies. Monthly costs can include payroll, rent, utilities, food, cleaning, insurance, software and your own pay.

Use the approved capacity and age mix you can actually staff. Every available space will not necessarily be filled on opening day. Run a conservative enrollment case as well as your target case, and include enough working cash to handle the difference.

Staffing can increase in steps. Another enrolled child may require an additional staff member or a different room arrangement, depending on the rules and your existing group. The daycare break-even calculator lets you model an extra staffing cost at a chosen enrollment threshold. That threshold is your planning input, not a statement of your state’s ratio rules.

Compare local tuition and daycare wage and price research as context. Your own schedule, age mix, costs and occupancy determine whether a particular price works.

Have ready: an opening budget, monthly cost plan, tuition schedule and an enrollment scenario that covers the staffing you need.

5. Arrange insurance for the care you will provide

Tell the insurance provider exactly what you plan to operate: home or center, ages and capacity, staff, hours, transportation, field trips and other activities. Ask how the proposal addresses liability, professional services, allegations of abuse or molestation, property and business interruption. Do not assume these protections are all included in a general policy.

Check the licensing authority’s requirements and any lease, lender or contract conditions. If you operate from home, confirm how business activities interact with your home policy. When employing staff or transporting children, ask about the applicable workers’ compensation and vehicle coverage.

Get a daycare insurance quote. Start your daycare insurance quote with Simply Business. Answer a few questions about your business and let their team help you find coverage.

Get my daycare insurance quote

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Use our daycare insurance guide to prepare for the discussion. Compare the named insured, covered activities, exclusions, limits, deductibles and effective date before relying on a quote. Availability depends on your business, location and insurer.

Have ready: coverage for the actual operation, required evidence of insurance and confirmation that coverage begins when needed.

6. Plan qualified staffing, background checks and training

Create a schedule that covers opening, closing, breaks and absences as well as the hours families are present. Identify the qualifications needed for each role and the supervision rules for the ages you will serve. Ask the agency how mixed-age groups, substitutes and your own children affect your plan.

Use the state’s required screening process. ChildCare.gov’s background-check guidance explains that licensed care involves checks beyond a routine employment reference, including relevant adults living in a family child care home. An ordinary recruiting-site screen is not a substitute for the required clearance.

Confirm initial and ongoing training for each role. ChildCare.gov outlines staff qualifications and training topics, including child first aid and CPR, safe sleep, emergency preparedness and child protection. Use approved courses and keep completion records.

Need to recruit staff? ZipRecruiter is an option for advertising roles and finding applicants. Review employer pricing and terms. You remain responsible for child care qualifications, required checks and hiring decisions.

Explore hiring with ZipRecruiter

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If hiring employees, arrange the required employer accounts, payroll and employment records. Budget the full cost of employing people and check workers’ compensation requirements. Recruiting someone is only one part of getting them ready to work.

Have ready: a workable staffing schedule, required qualifications and clearances, training records and a backup coverage plan.

7. Prepare enrollment documents and family policies

Give families a clear written agreement covering the child’s schedule, tuition, payment dates, closures, absences, deposits or fees, withdrawal and notice. State what services are included and who is authorized to collect the child. Match the agreement to your approved program and applicable rules.

Prepare the required enrollment, health, emergency-contact and permission records. Write usable policies for illness, medication, allergies, behavior guidance, incidents, emergencies and any transportation or field trips. Keep sensitive child and family information secure and accessible only to those who need it.

ChildCare.gov’s contract checklist is a useful reference for what families should understand. Use your licensing agency’s required forms and obtain legal review when needed. A generic service agreement alone is not a complete daycare enrollment pack.

The payment-policy planner helps you draft collection terms to review. It does not replace program-specific legal or licensing requirements.

Have ready: an enrollment pack, family handbook, emergency records and a process for obtaining and updating permissions.

8. Choose how and when families will pay

Choose a billing schedule that families can understand and your cash flow can support. Explain payment dates, accepted methods, treatment of absences and closures, and any permitted late-payment charges before enrollment. Keep the invoice and the signed policy consistent.

Payment timing matters even when tuition appears to cover monthly costs. Payroll or rent may fall due before receipts arrive. The tuition cash-flow calculator compares collection schedules and lets you explore delayed or unpaid amounts.

Need a way to collect tuition? Square is one option for customer payments. Check its current invoicing, recurring-payment features and fees against your program’s needs.

Explore payments with Square

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Compare processing fees, payout timing, payment authorization, recurring billing and refund handling. Decide whether a general payment tool is enough or you need a child care management system with attendance, family communication and subsidy administration. Avoid entering the same payment information into multiple systems without a reconciliation process.

Have ready: a tuition schedule, clear collection policy, payment method and a way to reconcile each family’s balance.

9. Fund the opening and the enrollment ramp-up

Calculate the cash you need for setup, approval delays and the period before enrollment reaches a sustainable level. Keep household needs separate from the program budget so you can see what the business must provide. Financing is optional; first understand the gap you are trying to cover.

Ask the relevant agencies about any available child care business assistance, subsidy participation or facility programs. Confirm eligibility, application dates, approved uses and payment timing before counting that money in your launch budget. Our childcare subsidy and provider-funding research gives additional context. An anticipated grant or reimbursement is not cash already available to spend.

Have a defined funding need? SuperMoney offers a business-financing comparison route. Eligibility depends on lender requirements, which may include operating history, revenue and credit. Financing for a new daycare is not guaranteed.

Explore business financing with SuperMoney

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Compare fees, total repayment, payment frequency, collateral or guarantees and the effect of lower-than-planned enrollment. Our small business funding guide explains the broader choices. If repayments only work with every place filled immediately, revisit the plan before borrowing.

Have ready: a funded opening budget, an operating cash reserve and a realistic plan for any repayments.

10. Finish approvals and check readiness before opening

Complete the application, inspections and corrective work required for your program. Confirm your approved conditions, capacity, ages and any restrictions with the licensing authority. Do not treat a submitted application, an LLC filing or insurance purchase as authorization to begin care.

Walk through a normal day with your team or backup caregiver: arrival, authorized pickup, meals, rest, outdoor time, toileting, an illness call and an emergency. Check that your staffing plan and written procedures can work in the actual space.

Required permission to operate and premises approvals are in place.
Insurance is effective and covers the planned activities.
Staffing, clearances and required training are ready for the enrolled age groups.
Families have completed the relevant agreements, forms and permissions.
Equipment, supplies, safety procedures and emergency contacts are ready.
Tuition collection, bookkeeping and payroll can run from the first week.

Set renewal reminders and review actual enrollment, staffing hours, costs and receipts after opening. Update the budget with your own results before expanding capacity or adding services.

Check your state’s daycare requirements

Use your state guide to find licensing, registration and insurance requirements for your location. Confirm the current rules and your program’s category with the relevant agencies.

Where are you starting?

Browse all 50 state guides and Washington, D.C.

Daycare research and planning resources

Explore costs, staffing, enrollment context and other questions as your plan develops.

Browse daycare research and supporting guides