Starting a childcare business is very complicated and you must wonder, are child care centers profitable? 

One of the most important things to consider is profit since that is the primary goal for starting a business. The service industry is growing, and childcare is in high demand. 

Most couples have full-time jobs, and they can’t stay out of work for years taking care of children.  

They need people to stay with their children during the day. Childcare is a complicated job but is it a profitable one? Let us look at its operation and answer this question; 

Are Child Care Centers Profitable? 

Childcare centers are profitable, and they can make an average of $37,000 each year. Some will gross as little as $20,000 while others go as high as $60,000 annually in profits.  

The exact amount will vary depending on the size, demand, and location. Bigger locations tend to get more customers and make more money with the help of daycare management software. 

How To Successfully Open A Childcare Center 

Opening a childcare center is no walk in the park, and you must have everything ready. Dealing with children is tricky, so you need to get all the details right.  

There are three basic parts you need to consider when starting a childcare business; let us look at each one; 

1. Write a business plan

A business plan is the first thing to do when starting any project, and it is crucial. When creating a business plan, you have a lot to think about, and you can get some helpful outlines online. The most important thing in this service industry is to study the competitive market. 

Look into the area you want to start the childcare center. Call the local centers or go online to see what services they offer and their prices. Look at what sets each center apart from the competition and attracts customers. 

This process is crucial to help you create an outstanding center that will attract more customers. If the area is academic, capitalize on it and create an environment parents will love. Build a business that stands out, and the best way is to use a day care management software.  

This software will help manage all your work and make everything run better. Build everything into your vision and strive to create the perfect environment. 

2. Location and building 

The first thing you must consider is whether you might need licensing in the future. If you need a license, get an official to help you when looking for a building.  

Some buildings might not be up to code, and you might have to move your business when looking for a permit. 

Some building codes don’t match with the regulations for preschools. Research the building before you buy it. It is crucial to also look at the neighborhood you want to set up and its proximity to potential customers. 

You should make sure it is a safe neighborhood. Parents won’t take their children into areas with high crime levels or accidents. Get a place that is easy to get to and safe for your customers, and your business should grow. 

3. Enrollment 

When opening new child care centers, most people assume that they have to get everything set up before dealing with enrollment.  

You need to think about enrollment earlier and start preparing for it. You need to write up your enrollment paperwork, parent handbooks, and staff handbooks. 

You can create an online enrollment website for easy access. Give the parents details of your program and everything you have to offer.  

Online platforms will reach more people and save you a lot of time. Have an open house to have some time with the potential clients and their kids. 

The first item on enrollment is to create an enrollment packet. Include all the fee structures and tuition. The second thing is to buy daycare management software to help run the core activities at the center. Do your research and get an affordable option that works for you. 

Why Do Childcare Providers Make So Little? 

If you start a childcare center, you will encounter payment issues with care providers. Childcare providers often earn under 15 dollars an hour.  

They don’t get benefits, paid leaves, and other advantages that higher care providers get. So why is this happening? 

The answer is simple; parent fees alone are not enough to fund a quality education. Some childcare centers have about 40 full-time students. Family payments amount to 40,000 dollars annually. About 12% is for rent, maintenance, and utilities. 

23% covers classroom equipment, food, and administrative costs. These expenses leave the school or daycare center with about 60% of the money. This is the amount they have to split between the personnel. 

Early care is crucial for humans; thus, it is labor-intensive and demands a low adult to child ratio. This ensures quality interactions between the care providers and children. A center with 40 students will have 3 classrooms. 

It needs at least 3 teachers, 6 assistants, and one director. The salaries of these 10 people do not allow for median salaries and benefits. Parents can’t afford to pay high enough to sustain benefits and paid leaves for care providers. 

As a childcare center owner, this is an issue you must be aware of and prepare to deal with it. Find ways of cutting costs to increase profits and pay your employees better. If the employees get good wages, they will perform better, and your business will grow. 


Are childcare centers profitable? You can get a decent profit at the end of the year in childcare. It is a highly sophisticated field, and you need careful consideration before getting in. Sometimes good daycare management software can help you run things more smoothly. 

Make sure you get all the basic things right so you don’t have to deal with lawsuits in the future. Get a good location, preferably close to residential areas with families. This proximity ensures you get plenty of families that need your services.