A child care business is a lucrative business if you enjoy working with children. In general, there are two main ways to set up a child care business. If you want to care for multiple children, the best option is to set up a special day care center. Meanwhile, if you have children of your own or want to work from home, you may want to consider a family or home-based daycare center. Whatever you choose, you need to understand how to set up a business properly.
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Part 1 of 3: Developing a Business Plan
Step 1. Evaluate the need for child care in your area
Before deciding to open a business that provides child care services, the first step is to do market research. There are several ways to obtain this information, but perhaps the best way is to speak directly with parents to determine the specific needs of child care in the area. Try the following methods:
- Interview several families and ask what type of care they need, and to what extent other businesses have provided services.
- Look at census data in your area, including the number of working families with young children, the number of recent marriages, and the distribution of the family's income. You can get this data from several sources, including the Central Bureau of Statistics or local government offices.
Step 2. Evaluate the existing child care business
The next step is to determine competitors. If in your area there are several businesses that offer specific child care services, you should differentiate yourself by serving unmet needs. Consider the following when evaluating potential competitors:
- What age groups have been served?
- What are the operating hours of other businesses?
- What types of care are offered?
- How many child care businesses are there in your area?
Step 3. Decide whether you will open a dedicated child care business or at home
Even if you want to offer a wide range of service specifications, there are basically two forms of child care: (1) a home-run business or (2) an independent-location business. The type of child care business to be established determines the budget considerations and legal requirements that must be complied with.
- When making your decision, consider that a home child care business is generally less expensive, hours are more flexible, and is more convenient for you and the family who need your services. The legal requirements for running a home daycare business are also usually less stringent compared to independent facilities.
- On the other hand, even though it requires higher start-up and operating costs, a business with independent facilities provides a greater opportunity to expand the business and earn higher income.
Step 4. Decide what kind of child care business you will run
After determining the basis, the next step is to decide on the services you want to offer. Perhaps the best way to determine is to go back to the original motivation. By considering the main reasons for getting into this business, you can find out exactly what you want to offer the public.
- Would you like to offer a faith-based care service?
- Would you like to offer learning facilities that focus on building or honing skills?
- Do you want to offer a place for children to come and play?
- By deciding on the type of service from the start, you will not only be able to set up the desired business, but also effectively create the required budget (eg educational materials, toys, etc.).
Step 5. Create a budget
One of the most important things in preparing to set up a business is making a budget. A budget will help you plan for the future of your business and ensure there is an opportunity for success based on the available resources. You have to consider start-up expenses, annual expenses, and monthly operating expenses. When creating a budget, consider the following types of expenses:
- Licensing, inspection and insurance fees.
- Health testing and cleaning.
- Security devices (e.g. smoke alarms, fire extinguishers, carbon monoxide detectors, first aid kits, child safety kits, etc.).
- Food, toys and activity supplies.
- Salary of prospective employees.
- Rent, mortgage, and electricity, water, etc.
Step 6. Choose a name
One of the most important steps in opening a business is choosing a name because that name will represent your services to the outside world. The business name should be catchy, easy to remember, and indicate the type of service you provide.
You need to check whether the name of your choice is already used and registered with the Director General of Intellectual Property Rights
Step 7. Select the type of business entity
There are several types of legal entities for businesses, each with advantages and disadvantages. For example, if you are a sole proprietor, tax matters will be easier. However, if you operate as a corporation or limited liability company, you can limit your liability if any problems occur with your invested funds while operating your business (that is, you are not personally liable).
You should consider consulting an experienced legal advisor in the format/business entity to understand the different types of business structures available before making a decision
Part 2 of 3: Setting Up a Daycare
Step 1. Contact the Local Government office
Once you have a business plan and want to start preparations, the first step is to contact the local government office to find out the general requirements that must be followed to run a child care business properly. Ask some of the following:
- What business licenses are needed to run your business, and how to get them.
- Building regulations that must be complied with.
- Applicable occupancy laws (how many children are legally acceptable?).
- You can also contact the association that regulates child care, if one exists.
Step 2. Choose a location
If you are planning to run a home daycare business, this step is no longer necessary. However, if the plan is to operate in a separate facility, you should choose a good location that your budget allows. Based on your budget, you should also consider whether you should buy or rent a space. Consider the following factors when choosing an independent location:
- Is the location convenient for parents?
- Does public transportation reach these locations?
- Is the surrounding area safe?
- Is the location adequate for the business you are going to run?
- Does the place provide adequate kitchen/bathroom facilities or equipment?
Step 3. Contact the Office of Spatial Planning
This step is necessary to ensure that you can set up a daycare in the desired location.
Step 4. Prepare the site for inspection
Inspection preparations include installing cupboard locks, installing a changing table/switch in case you receive babies and/or toddlers, installing an acid detector, and closing electrical switches. You will also need to prepare an emergency evacuation plan.
If you do not pass the first inspection, you will be given the opportunity to correct the error and arrange a re-inspection
Step 5. Schedule the required inspections
In fact, the type of inspection depends on local regulations. Inspections are required to ensure your desired location meets health and safety requirements. You may need to schedule some or all of the following inspections:
- Fire safety inspection.
- Health inspection.
- Environmental health inspection.
Step 6. Get the required permissions
In most cases, you will need to apply for and obtain the proper business license to babysit. The type of permit required depends on government regulations. The Local Government can tell you what permits you need. You will be provided with information regarding the requirements, which should be read carefully. Here are some processes you may need to follow to get permission:
- Attend orientation sessions to learn about state and local regulations for operating a business and complying with applicable laws.
- Fill out the permit application form.
- Pay the permit fee.
- Cooperate in reviewing business plans, site inspections, and finalizing the licensing process.
- Attend training focused on CPR, first aid, and the like.
- Undergo background checks (and fingerprint checks) for you and potential employees.
- Undergo health checks/immunizations for you and prospective employees.
Step 7. Find the required insurance
In general, you need to have insurance for your child care business. You will be taking care of someone else's child, and as such, you must provide the best possible care and attention. Insurance will give peace to the client and yourself because the business is financially protected from problems that may arise.
Your local government office can tell you what insurance you need based on the type of child care business you're setting up
Step 8. Comply with tax regulations
Depending on the business entity you choose, you must comply with your tax obligations, including the form to use and the type of tax to be paid.
Just like choosing a legal entity for your business, tax requirements are also quite complex and you should consider working with a tax professional to make sure you pay taxes correctly and comply with applicable laws
Step 9. Purchase the required equipment
The type of storage business that will be run determines the type of equipment and/or materials you need. Children have different needs and interests depending on their age, and the types of activities you offer also require different equipment and supplies. You will need to have some or all of the following equipment:
- Children's furniture (tables, chairs, study tables, etc.).
- Arts and crafts materials (pencils, crayons, paper, safe scissors, etc.).
- Toys (games, puzzles, dolls, character figures, Legos, pairs of blocks, etc.).
- Children's book.
- Healthy and nutritious food/snacks.
- Storage containers for personal items, hangers, etc.
Step 10. Recruit employees
Depending on the size of your business, you will need some additional staff to help with day-to-day operations. Choose your staff carefully as they will work directly with the children in your care, and as a supervisor, you are responsible for their attitude at work. When evaluating potential candidates, consider the following:
- Try to find candidates who have experience working with children (e.g., babysitters, teachers, camp counselors, etc.).
- Education is also important. Look for potential employees with education in child care, child education, child development, or a similar field.
- While it may not be required in all areas, you should also consider whether the prospective employee has relevant certifications, such as CPR or first aid training.
- Depending on the applicable law, you also need to make sure the employee has done a background check, such as having an SKCK.
Part 3 of 3: Running a Child Care Business
Step 1. Develop a marketing strategy
The success of a business depends on a marketing strategy that is able to inform the services offered. Before you start advertising, try to think about the information you want to convey. Consider the following:
- Think about how to describe the services you offer. What are the differences and advantages from existing child care? What age do you serve? How are your operating hours?
- Think about the fees you will charge based on market research so you can compete with other child care businesses in the same area.
- Think about the advantages of your location (ample parking, safe, convenient, etc.).
- Also consider marketing the capabilities of your staff. What qualifications/certifications/specialties do they offer?
Step 2. Advertise your business
You should start advertising approximately three months before opening. If you have the funds, try advertising in newspapers, radio, and television for a wider reach, but these ad formats don't come cheap. Consider some of these cheaper options even if you have the funds to create a conventional ad:
- Information by word of mouth.
- Placing pamphlets/posters in public spaces (make sure you have permission from the owner of the property/building concerned).
- Distributing brochures/business cards in libraries, religious gatherings, parent-teacher meetings, RT/RW events, etc.
- Placing a small ad in the local newspaper.
Step 3. Plan a daily schedule
You also need to decide what activities the children will do at your place. Some places offer little structure, they provide toys or food for the supervised child to use alone, but have no routine or schedule. Other places use a more planned approach, such as special times for playing, studying, napping, and so on, depending on the age of the child. Think about what activities you provide for the children in your care, and what kind of schedule you offer.
