How much does it cost to start a daycare?
Estimate what it costs to start a daycare, from a licensed home program to a full center. Licensing, safety compliance, and staffing drive the cost more than furniture does.
Typical range $71,570 – $113,670
- Format setup$40,000
- Equipment & furniture$10,000
- Licensing & background checks$3,000
- Safety & compliance buildout$6,000
- Insurance (year 1)$3,500
- Management software$1,200
- Marketing & enrollment$2,500
- Working-capital buffer$18,000
- Total$84,200
§ 02 The return
Read the payback figure against the cell beside it. It assumes you are still trading. BLS follows every new establishment in this sector, and 46.4% of them are shut within five years. The payback number is not wrong, it is just answering a narrower question than it looks like: if you are still open, this is when the money comes back. It does not price the branch where you are not.
The default revenue here is the Census average for this industry, adjusted to 2025 dollars. The profit margin used to work out payback is Calcatrice's own estimate: public data does not publish net profit margin for staffed businesses, and the IRS figure above measures a sole proprietor's take-home, not a company's margin.
§ 03 Effort & commitment
Long days tied to parents' schedules, plus real compliance and licensing responsibility.
Where the money goes
Does it pay back?
Cumulative cash flow. The line crosses zero the month your cumulative profit has repaid the startup cost.
By the numbers
- THE PAYBACK FIGURE ABOVE ASSUMES YOU ARE STILL TRADING, and until now this page never said so. It is computed from Economic Census receipts, and the Economic Census counts businesses that EXIST: the ones that opened and closed are not in the denominator. BLS Business Employment Dynamics follows every new establishment from the day it opens. Of those that opened in this sector (Health care and social assistance) in 2019, 53.6% were still open five years later, so 46.4% were gone. That does not make the payback number wrong, it makes it narrower than it looks: IF you are still open, this is when the money comes back. It does not price the branch where you are not.
- THE "AVERAGE" FOR THIS INDUSTRY IS A MEAN, AND A MEAN IS NOT A TYPICAL BUSINESS. The Economic Census also publishes receipts by firm SIZE, and nobody here had ever pulled it. Firms with under five employees, which is the band you would actually be starting in, average $14,545 a month. The all-establishments mean is $65,988: it overstates the small operator by 4.54x. Firms with 500 or more employees take 15% of this industry's receipts, and that is what lifts it. About 59% of establishments sit in size bands whose own average is below that mean. We used to pre-fill YOUR expected revenue with the mean, which drove the profit and payback lines, and it is the worst mistake this site has made.
- Census (2022): the average child day care center with employees took in about $60,384 a month, while a solo operator with no employees averaged about $1,626 a month. Those are the figures as published for 2022; this calculator carries them forward to 2025 dollars using the GDP price deflator.
- IRS (2023): sole proprietors in social assistance reported net income of about 36.7 percent of receipts, though that is the owner's own take before paying themselves any wage.
- Revenue is capped by licensed capacity and staff-to-child ratios rather than by demand.
Margin used in this calculator: 8% to 18%. That band is our own estimate, not a published statistic. Public data does not report net profit margin for staffed businesses, so treat the payback figure as a projection, not a promise.
Where every number above comes from
-
US Census
U.S. Census Bureau, 2022 Economic Census
census.gov -
US Census
U.S. Census Bureau, 2022 Nonemployer Statistics
census.gov -
IRS
IRS SOI, Sole Proprietorship Returns (TY2023)
irs.gov
What this assumes, and where it could be wrong
Every one of these is a place the number could be off. They are here because you should be able to check our working, not because we are hedging.
YOU HIRE TO THE RATIO BEFORE THE ROOM IS FULL.
THE BUILDING HAS TO PASS AS A CHILD-CARE USE, NOT JUST A LEASE.
WHAT HERE IS A FEDERAL FIGURE, AND WHAT IS OUR MODEL.
The format decides almost everything. A licensed home daycare can start for around $10,000 to $15,000; a full center with a lease and buildout runs $50,000 to $150,000 or more.
Licensing and safety compliance are not optional and vary by state. Staff-to-child ratios, square footage per child, fencing, and fire safety all shape your costs before you enroll a single family.
Staffing is the largest ongoing cost at a center because ratios cap how many children each adult can supervise. Plan working capital around payroll, not rent.