Fewer than 1 in 3 toddlers stay home with a parent during the day, as the number of single-parent homes continues to rise and more dual-parent homes need dual salaries. These families need child care providers who are caring, confident and competent, which is where you come in. But if you’re looking to open a daycare of your own, there are plenty of things that need to be addressed.
Child care is a demanding profession. Before going down the path of opening your own business, caregivers should make sure they are prepared for any obstacles ahead. Considering questions about the logistics of your operation, financial goals, and your motivations are a helpful way to do this. By arming yourself with the necessary tools needed to build a stable environment, you’ll be able to build a business where children can thrive. To help with that, we’ve outlined the three most important things to consider before opening a daycare.
Invest in Specialized Insurance
Specialized insurance is designed to cover the inherent risks associated with your specific industry. These policies work to offer a guarantee of protection in the event of certain circumstances.
While general liability insurance coverage can cover bodily injury and property damage for your in-home child care business. Commercial general liability limits up to $1 million per occurrence / $3 million aggregate(if you want further explanation on this, book a call with us here).
When it comes to opening a daycare, it’s important to ensure that your policy includes kidnapping and molestation coverage. This critical coverage can potentially cover defense or monetary judgement against your business. Here at Portal Insurance, we recognize the importance of this protection, which is why our specialized policy includes kidnapping and molestation coverage.
Accident medical insurance will cover a child’s medical bills if they are injured in your care, or if their bills exceed what their parent’s medical/health insurer pays.
In the state of Alabama, most daycares are required to have at least 5 employees. As per Alabama guidelines, businesses with 5 or more employees are also required to buy worker’s compensation insurance.
Workers’ compensation insurance, commonly known as workers’ comp, is insurance that covers medical expenses and a portion of lost wages for employees who become injured or ill on the job. This coverage may also include employee rehabilitation and death benefits.
Each state has its own unique set of workers’ compensation laws that employers must follow. These regulations help ensure that employers provide coverage for the cost of work-related injuries or occupational diseases, regardless of employee negligence, so it’s important to become familiar with your state’s compensation laws before opening your facility.
Become Familiar With Your State’s Licensing Requirements
Maybe you started small—occasionally watching the neighborhood kids or babysitting your niece and nephew. But now that you’re considering expanding, you need to be sure that you have the correct license to be legal.
The best place to begin is by contacting your state’s Department of Children and Family Services (DCFS) to learn about the regulations for child care providers. It’s important to become familiar with these regulations and follow the procedures exactly.
Local child care licensing agencies are another valuable resource. In order to obtain a license, you may need a current CPR certification, an unblemished driving record, and other documents that demonstrate your reliability when it comes to caring for children. While gathering all of the necessary documentation can be time-consuming, it’s an important step to plan for when it comes to opening your own daycare facility.
Decide How You Want to Operate
When it comes to opening a small business, it’s important to remember that you’re not being paid in coloring pages and hugs. Outlining your financial goals will help you to remain focused, prepared, and keep your business on track.
Creating a budget and a business plan can be as simple or as elaborate as your comfort levels allow. From downloading a free template to fill into seeking out the expertise of friends and local professionals, your business plan can help you set intentions for your daycare center. When it comes to budgeting, many experts recommend tacking on an extra 20-30 percent as a buffer, just to be safe.
Beyond adding the buffer to your budget, you need to know exactly where your money is coming and going to ensure that your business is profitable. Consider these questions when drafting your budget and business plan:
- How many employees do you plan to hire?
- Are you expanding on space within your home or are you renting a space in a building?
- What materials do you need to purchase? Additional toys? Safety equipment?
It’s also important to consider the cost of licensing, inspection, and zoning. The buffer that you’ve included within your budget will come in handy if you discover that you need an extra gate or another fire extinguisher.
Deciding to open a daycare can be an incredibly rewarding decision. However, staying informed and prepared about the best practices for your business can guarantee the success of your daycare facility.
If you have questions about this please feel free to schedule a call with us here