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Opening a daycare center usually costs between $50,000 and $250,000, and more for a large center that needs major renovation. A home-based daycare can start for roughly $10,000 to $50,000. Renovating the space to meet licensing rules and covering payroll before enrollment fills up are the biggest costs.
Total cost to open a daycare center
State licensing rules drive much of the cost: square footage per child, bathrooms, kitchens, fire exits and outdoor play space all have to meet code. A space that was already licensed for childcare can cut renovation costs sharply.
Startup costs by item
| Item | Typical cost |
|---|---|
| Space and renovations | $20,000 to $150,000+ |
| Furniture and equipment | $10,000 to $40,000 |
| Toys and learning materials | $5,000 to $20,000 |
| Payroll before opening and during ramp-up | $15,000 to $60,000 |
| Insurance (first year) | $2,000 to $8,000 |
| Licensing fees | $500 to $3,000 |
| Staff training | $1,000 to $5,000 |
| Marketing | $2,000 to $12,000 |
| Working capital (3 months) | $25,000 to $80,000 |
Monthly operating costs
A small center typically spends $15,000 to $25,000 a month. Staffing is the biggest cost by far, usually 50% to 70% of expenses and sometimes more, because licensing sets the staff-to-child ratio.
How much a daycare center makes
Margins are thin and size matters. One state analysis found small centers losing money on average while large centers earned around 10%. Average center tuition runs roughly $300 to $320 a week per child. Government programs like CACFP meal reimbursement and childcare subsidy vouchers can add to revenue.
Licenses and permits
- State childcare license, including staff ratios, background checks and inspections
- Zoning approval
- Fire inspection
- Health inspection
- Food service permit if you serve meals
Ways to lower your startup costs
- Lease a space already licensed for childcare
- Start home-based and move to a center as enrollment grows
- Apply for state startup grants and CCDF funds
- Enroll in CACFP for meal reimbursement
- Ramp up staffing with enrollment
How to pay for a daycare center
Most new owners pay for startup costs with a mix of savings, an SBA loan, equipment financing and sometimes money from family or partners. Lenders that fund brand-new businesses usually want a solid business plan, good personal credit and some of your own money in the deal. See business loans for startups and how to qualify for an SBA loan.
Once you’ve been open at least 6 months and bring in $15,000 or more a month, working capital becomes an option for the things that come up after opening: a slow season, an equipment repair, a second location or extra staff. Delta Capital Group funds businesses from $5,000 to $5,000,000 based mainly on your bank statements, and many clients are funded the same day they’re approved. You can apply online or call (877) 230-1525.
FAQs
How much does it cost to start a daycare?
About $50,000 to $250,000 for a center, or $10,000 to $50,000 home-based.
What’s the biggest cost of running a daycare?
Staffing, usually 50% to 70% of monthly costs.
Are there grants to start a daycare?
Many states offer startup grants through childcare development funds. Check with your state childcare agency.
Can I get funding for a daycare?
Yes. See business loans for childcare businesses.
Sources
Cost ranges are planning estimates from these sources, reviewed November 2026. Actual costs vary a lot by city and setup: MyKidReports, Upmetrics, Vermont legislative testimony (First Children’s Finance).