Opening a daycare heading into 2027 costs roughly $5,000 to $15,000 for a licensed home daycare, $50,000 to $300,000 or more for a small center in leased space, and $590,000 to well over $1 million for a name-brand franchise school. The single number that explains the spread is how many children your license lets you enroll, because every extra spot adds square footage, furniture, staff and the cash you burn while the rooms fill up.
So the useful way to compare options is cost per licensed spot. A home program can open for around $1,000 to $2,000 a spot. A leased center usually lands between $4,000 and $6,000 a spot once you count the working capital, and that figure tells you how long tuition needs to pay you back.
Four ways to open a daycare, priced per spot
| Model | Typical capacity | Startup cost | Rough cost per spot |
|---|---|---|---|
| Family child care home (your house) | 6 to 8 children | $5,000 to $15,000 | $800 to $2,000 |
| Large or group family home (with an assistant) | 12 to 14 children | $15,000 to $35,000 | $1,200 to $2,800 |
| Independent center, leased space | 40 to 80 children | $50,000 to $300,000+ | $1,500 to $6,000 |
| Franchise school (Kiddie Academy, Goddard) | Large purpose-built schools | $590,000 to $1.5 million (leased) | Ask the franchisor for planned capacity |
Capacity caps come from your state, not your ambition. Florida, for example, limits a family child care home to 6 children and a large family child care home to 12, and you must run the smaller license successfully for two years before you can move up. Many states work the same way, so most owners start small whether they planned to or not.
The square-foot rule that decides your rent
For a center, licensing rules translate enrollment directly into floor space. Arizona’s rule is typical: 35 square feet of usable indoor space per infant or 1-year-old and 25 square feet per older child, plus 75 square feet of outdoor play space per child for at least half your capacity. Kitchens, bathrooms, hallways, offices and storage do not count toward usable space.
- 60 children, mixed ages: about 1,600 to 2,100 square feet of classroom space, which usually means a 3,500 to 4,500 square foot building once bathrooms, a kitchen and an office are added.
- Outdoor area: 75 square feet for 30 children is 2,250 square feet of fenced play yard, which rules out many strip-mall spaces with no land behind them.
- Infant rooms: need more space per child, cribs, diaper stations and sinks, so they cost the most to build and staff even though they bring the highest tuition.
Before you sign a lease, get the local fire marshal and your state licensing consultant to look at the space. A building that needs a second exit, sprinklers or new restrooms can add six figures to the buildout. Spaces that already housed a school or daycare are worth paying more rent for.
A 60-child leased center, line by line
Example only: a hypothetical independent center licensed for 60 children in a 4,000 square foot leased building that was not previously a daycare. Figures are assumptions drawn from the ranges in this guide, not a real budget or quote.
| Line item | Assumption | Cost |
|---|---|---|
| Lease deposit and first month | $20 per sq ft a year, about $6,670 a month | $13,300 |
| Renovation | Child-height sinks and toilets, partitions, fire alarm, flooring | $120,000 |
| Playground | Fencing, safety surfacing, age-appropriate equipment | $35,000 |
| Furniture and classroom equipment | Cribs, cots, tables, shelving, curriculum materials (about $500 a spot) | $30,000 |
| License, permits, inspections, background checks | Varies widely by state and city | $3,000 |
| Insurance deposit | Liability, property, abuse and molestation coverage | $4,000 |
| Software, website, opening marketing | Parent app, billing, signage, ads | $6,000 |
| Hiring and pre-opening payroll | Director and lead teachers for training weeks | $15,000 |
| Working capital | Covers losses while enrollment ramps up | $60,000 |
| Total | About $286,000, or $4,770 per spot |
Move the same center into a former preschool that only needs paint and new furniture, and renovation could drop below $25,000, pulling the total near $190,000. Build new instead, and construction alone runs into seven figures: RSMeans’ model for a 10,000 square foot day care center was already about $172 to $191 per square foot on 2019 data, before several years of construction inflation.
Payroll is the bill that never stops
Startup cost gets the attention, but staff wages decide whether a center survives. Payroll typically eats 50% to 70% of a daycare’s ongoing expenses, and you cannot trim it below the ratios your state sets. Many states require roughly one adult for every four infants, with ratios loosening as children age. Childcare workers earned a median of $16.82 an hour ($34,980 a year) in May 2025, according to the Bureau of Labor Statistics, and preschool teachers about $38,140.
Run the 60-child example with nine teachers at $17 an hour, a $55,000 director and about 10% added for payroll taxes and workers’ comp. That is roughly $34,200 a month in payroll. Add rent and about $6,000 for food, supplies, utilities, insurance and software, and monthly costs reach about $46,900.
- Blended tuition assumed: $250 a week, or about $1,083 a month per child.
- Break-even: $46,900 divided by $1,083 is about 44 children, or roughly 73% of capacity.
- Full enrollment: 60 children bring in about $65,000 a month, leaving around $18,000 before debt payments, repairs and the owner’s pay.
That 73% line is why working capital matters. New centers rarely open full, and every month spent at 30 or 40 children drains cash. For context, Child Care Aware of America put the 2025 national average price of child care at $13,184 a year, with center infant care around $15,636, so check your local market before assuming $250 a week.
Home daycare: what the first $10,000 buys
A family child care home skips rent and buildout, which is why it is the cheapest way in. The money goes to making your house pass inspection and equipping one mixed-age room. A typical budget for six to eight children:
| Item | Typical cost |
|---|---|
| License application, fingerprints, background checks | $100 to $1,000 |
| CPR, first aid and required training hours | $200 to $1,500 |
| Safety upgrades (gates, smoke and CO detectors, extinguishers, outlet covers, fence repair) | $1,000 to $5,000 |
| Cribs, cots, high chairs, tables, storage | $2,000 to $8,000 |
| Toys, books and learning materials | $1,000 to $4,000 |
| Liability insurance, first year | $500 to $2,500 |
| Marketing, website, parent app | $300 to $3,000 |
Those lines are not all additive; a lean setup with donated or secondhand furniture opens near the bottom of each range. Two costs owners miss: your homeowners policy almost never covers a business in the home, so you need a separate daycare liability policy, and your HOA or lease may ban the business outright. Read both before paying a licensing fee.
Franchise schools by the numbers
Premium preschool franchises sell a brand parents already trust, a curriculum and site-selection help. You pay for it up front and every month after.
| Brand (2026 FDD) | Initial investment | Franchise fee | Ongoing fees | Average gross revenue |
|---|---|---|---|---|
| Kiddie Academy | $590,000 to $1.01 million (leased) | $70,000 to $150,000 | 7% royalty + 2% brand fund | $2.19 million (293 mature academies, 2025) |
| The Goddard School | $1.0 million to $1.5 million (leased, landlord builds) | $135,000 | 7% royalty + 4% marketing | $2.51 million (620 mature schools, 2025) |
| Primrose Schools | $2.15 million to $7.97 million (adaptive reuse or new build) | $50,000 to $80,000 | 7% royalty + 2% brand fund + local ad fees | $2.81 million (405 schools, 2025) |
Royalties and marketing fees of 9% to 11% of gross revenue on a $2.2 million school come to roughly $200,000 to $240,000 a year. That is the price of the brand, so compare it with what you would spend on marketing and curriculum on your own. Have a franchise attorney review the full FDD; this site is not affiliated with any brand listed.
What changes for daycare owners in 2027
No state or industry group has published 2027 startup prices, so plan with today’s ranges and expect similar or slightly higher costs for construction, insurance and labor. Several changes are already on the books, though:
- A bigger employer child care credit. The 2025 federal tax law (often called the One Big Beautiful Bill Act) raised the Section 45F credit for tax years starting in 2026 from 25% to 40% of qualified costs (50% for eligible small businesses), with the annual cap rising from $150,000 to $500,000 ($600,000 for small businesses) and indexed for inflation after 2026. Contracts with licensed providers and reserved-seat deals can qualify, which gives centers a new pitch to local employers.
- More pre-tax money for parents. The same law raised the dependent care FSA limit to $7,500 per household starting in 2026, which makes tuition easier for some families to absorb.
- Higher wage floors. Several states and cities index their minimum wage and adjust it each January 1, which pushes up the bottom of your pay scale in 2027. Check your state labor department’s posted 2027 rate.
Tax rules have conditions and recapture provisions, so confirm how any credit applies to you with a CPA.
Spend in this order, not all at once
- Call your state licensing office first. Ask for the capacity limits, ratios, space rules and fee schedule for each license type. Many states require an orientation before you apply.
- Price your market. Call five nearby programs for weekly rates and waitlists by age group. A long infant waitlist is the best demand signal you can get.
- Pick a capacity, then a building. Work out square footage from your target enrollment, and have the fire marshal and licensing consultant review any space before you sign.
- Line up financing. SBA microloans go up to $50,000, enough for many home programs. Centers usually need an SBA 7(a) loan or bank financing plus your own equity.
- Buy insurance and equipment last, after the space passes inspection, so you are not paying for a room you cannot use.
- Hold back three to six months of operating costs before you open the doors.
Questions new daycare owners ask
Can I start a daycare with no money?
Not with zero, but close. A family child care home can open for a few thousand dollars if you use secondhand furniture and your state’s fees are low. Many states and local child care resource and referral agencies also offer startup grants or free equipment for new licensed providers, so ask your licensing office what is available.
Do you need a degree to open a daycare?
Usually not for a home daycare, where states typically require training hours, CPR and first aid, and background checks. Centers often need a director with early childhood education credits or a credential such as a CDA, and requirements vary by state.
How long does it take to get a daycare license?
Home licenses often take one to three months from orientation to approval. Centers can take six months or longer because zoning, building permits, fire inspections and renovations all come before the licensing visit.
How much does a home daycare owner make?
It depends on enrollment and local rates. Six children at about $220 a week bring in roughly $68,600 a year before food, supplies, insurance and taxes. Many owners keep about half to two-thirds of gross revenue, with some home costs partly deductible. Confirm your tax treatment with a tax professional.
Can I run a daycare in a rented house or apartment?
Sometimes. You will usually need the landlord’s written permission, and many leases, HOAs and local zoning rules restrict home businesses with client traffic. Some states protect licensed family child care homes from certain zoning limits, so check state law before assuming the answer is no.
Related cost guides
- Daycare cost: what parents pay each week after tax breaks
- Cost to open a salon: suite, booth rent or commission
- Cost to open a gym: budget by the members you need
- Cleaning business startup cost: cheap until you hire
- Business insurance cost: what your paperwork requires
- Franchise fees: the check at signing vs the 10-year bill
Pricing method: home and center startup ranges from MyKidReports’ 2026 daycare startup cost data; space rules from Arizona Administrative Code R9-5-602 and capacity limits from the Florida Department of Health; construction cost from RSMeans’ day care center model (2019 national average); wages from the Bureau of Labor Statistics (May 2025); price of care from Child Care Aware of America’s 2025 report; franchise figures from 2026 FDD summaries; Section 45F changes from published tax analyses of the 2025 law. Worked examples are hypothetical. Prices were researched in November 2026 for 2027 planning and may change; licensing rules and fees vary by state. See our disclaimer.
