Start a Child Care Business

Posted at 8:11 PM, Dec 15, 2020
and last updated 2020-12-15 22:11:26-05

There is much more information at: HRDC #7

Have you Considered Starting a Home Child Care Business?

Do you love working with children? Does it excite you to see the “ah-ha” moment when a child learns something new? Have you been told you are great working with children?

Becoming a home child care provider is not for everyone. It is not an easy job. When you welcome children into your home and provide a nurturing, safe environment supporting their development, you are not “babysitting,” you are providing early childhood education. Providing early childhood education is an important job and can be a fulfilling career choice.

Owning your own business gives you the freedom to follow your passion, be your own boss, and have a meaningful impact in the lives of children and families in your community.

The following information and resources are designed to help you think through the process and open a successful child care program. All information shared in this toolkit is for broad educational purposes only. It is not and does not take the place of legal advice for any specific situation nor is it offered as such.

Is Opening a Home Child Care Program Right for You?

Montana families are in desperate need of more quality child care providers. While parents are working, they are looking for early childhood educators who will teach, nurture, and keep their children safe. Is this you? This checklist will help you think about the reasons why you want to become a child care provider, and how this decision might impact you and your family.

• Are you passionate about helping children and families?
• Do you enjoy spending time with young children for extended hours?
• Do you get along well with multiple types of parents and children, even if their parenting is different than yours?
• If you have children or other people in your life who may need you during your hours of operation, have you identified someone else able to care for them if they become sick or need something?
• Are you considering using your home for the child care business? Have you thought about which areas you might use?
• If your own children are old enough, have you talked to them about the possibility of a child care business in your home?
• Are you at least 18 years old?

If you answered “Unsure” to some of these items, contact your local Child Care Resource and Referral (R&R) office. Experts are available to answer questions.

If you said “Yes” to these items, you are ready for the next step in becoming a home child care provider, but you should also contact the experts at your local R&R.

Location, Location, Location

Location is important to determine the feasibility of your child care business. In some areas, zoning laws prohibit home-based child care businesses. To have a registered, legal business, child care providers must meet state requirements to ensure safety, including space requirements.

Our experts at local R&R agencies often see concerns about space delay the licensing process. Contact your local R&R for help assessing your space. It’s important to remember these requirements are considered to be in the best interest of children, even if they feel inconvenient.

Examples of space requirements include:
• 35 square feet of space inside per child, not including hallways, bathrooms, kitchens, and space not used for child care.
• 75 square feet per child of outdoor space, surrounded by a 4-foot fence.
• Subsidized housing prohibits running a personal business on their property.
• Child care cannot be provided in a basement or upstairs without a door and windows to outside access for fire safety.

Let’s Get Down to Business

Your child care business is just that — a business — and should operate as such. For specific advice, contact the Montana Small Business Development Network, Montana Women’s Business Center, or local R&R agency. You will need a business plan, an understanding of the regulations you need to meet on the state and local level, and an awareness of the support services available to you. Don’t let the idea of a business plan scare you. It’s really just looking at questions that pertain to what you hope your business will be and honestly answering them. You can find a business planning tool on our website,


For home child care providers, the goal is to figure out how to run a quality program that parents in the community can afford to use and that provides the salary needed to support your family. Work with your local R&R to determine the market rate for child care in your community. Try the budgeting tool available at to determine feasibility.

Potential Business Income

CACFP: Child and Adult Care Food Program provides reimbursement to providers who provide healthy meals within USDA guidelines.
Best Beginnings Scholarship: A state subsidy program that helps lowincome families pay for child care. The child care provider receives the payment for reimbursement for child care fees. Tuition: As the business owner, you will decide how much you will charge per child. This rate often differs based on the child’s age, the hours you are providing care, and the size of your facility.
Grants: Check with your local R&R to see whether there are any startup or expansion grants available.
Best Beginnings STARS to Quality Program: Once established, you may consider participating in the quality rating and improvement system that provides support and financial incentives to participating early childhood programs. Contact your local R&R for more information on these potential funding sources.

Have You Thought About …?

Don’t forget to include a pre-opening budget in your plan. This includes startup costs, capital expenses related to meeting licensing requirements, and financial coverage for the period before you reach your minimum capacity of children attending the program.

Minimum capacity is the fewest number of children enrolled in your program that will provide you a living wage.

Being your own boss means remembering to pay yourself first! Too often providers just take what is left. You are working to support your family. Pay yourself first!

Tip: Work your operating budget without a need to be at full capacity. That relieves you from ongoing financial stress, as well as provides a builtin contingency fund when you are at maximum capacity.

Think about the additional food costs if you are providing snacks and meals.

You might see an increase in utilities due to operating a business full time within your home.

Tip: Equipment/supply costs can be kept low by thinking outside the box – books from the local library, used toys from yard sales/thrift stores, DIY toys and equipment from recycled/repurposed materials, and natural materials. Everything does not need to be new.

There is much more information at: HRDC #7

Or Contact:

Julie Ludwig