Should I Open a Home Daycare or a Center?

A key decision to make early on is whether your business will be operated out of your home or in its own facility. Each has its own pros and cons and really depends on what type of business you intend to operate that works best for you. Below are some of the main advantages and disadvantages for you to consider when making your decision.

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Home Daycare

Advantages:
  • Lower startup costs.

  • Less overhead costs (e.g. rent).

  • No commuting.

  • More one-on-one time with the children.

  • Lower ratios (provider:children).

Disadvantages:
  • Limited capacity for enrollment/income.

  • Can be less trust from parents than a larger center.

  • More difficult to separate home and work life.

  • Can be overwhelming being hands-on with the children while also focusing on the business side of things.

  • Difficult to close for any reason (appointments, illness, etc.) since you are often solely responsible for the care of the children.

Child Care Center

Advantages:
  • Higher earning potential.

  • Can be viewed as more trustworthy.

  • Freedom to choose the perfect location and facility.

  • Easier to expand and earn more income if so desired.

Disadvantages:
  • Higher startup and overhead costs.

  • Can be more demanding (e.g. more staff to manage and children in your care).

  • The larger your business gets, the more complex it will be to run.

  • More difficult to shut down if you decide running a child care center is not for you.

  • Higher ratios (teachers:children).

  • Staff turnover.

  • The larger your business gets, the less time you will spend actually teaching or working directly with children.

For some, the type of facility required will be an obvious choice; for others, it is unclear which is the best option. If you are in the latter category, then you may want to dip your toes in by starting off smaller with a home-based business if you have the option of doing so. That way, you will have less initial risk when getting started, and you can always expand later into a child care center.

Another advantage of opening a home daycare is that there are many child care agencies that match home daycares with new customers, taking much of the heavy lifting off your hands to get children enrolled.

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