In child care, if you’re not on top of your finances, it can feel like you’re always one step away from a difficult situation. It’s a stressful place to be—especially when your focus is on creating a safe, nurturing space for children to learn and grow. That’s why taking intentional steps toward financial stability matters. It gives you the freedom to build the kind of care environment you’ve envisioned, reduce daily stress, support your team, and most importantly, provide the best possible experience for the children in your care.

In this article, we’ll explore what it takes to run a financially stable—even profitable—child care business and answer questions like:

• Are daycares profitable? 

• How much do daycare owners make?

• What should be included in a daycare business plan?

• What are the common startup and operating costs for a daycare?

• How can I track daycare expenses effectively?

• What are smart ways to increase revenue in a childcare business?

• How do I keep enrollment full and families loyal?

• What financial safety nets should I have in place?

Start with a strong daycare center business plan

A financially stable daycare center starts with a strong business plan. You’ve gotta cover all your bases to expect to run a profitable business, right? Here are the essential components of a daycare business plan:

1. Executive summary

Your executive summary should contain the name, location, and mission of your childcare business, followed by services and what age group you intend to serve. This overview is a snapshot of your business, your unique value proposition (what makes you different from your competitors), and a summary of your financial goals and growth plan. This documentation helps you stay true to your original goal and attract investors. 

2. Mission statement & core values

Your mission statement illustrates why your center exists. This should include what makes you passionate about your work, how you intend to take care of your kiddos, and the gaps you aim to fill within your community. Ask yourself what you stand for. Is it inclusivity, safety, or early education excellence? This exercise will act as a North Star for your future business decisions and will help you recruit employees who are aligned with your vision and attract families with the same values. 

3. Business description

In the beginning stages, you’ll need to establish your business and define the ownership and management team. In this step of the business plan, you’ll need to decide what type of business you want to run—an LLC, a sole proprietorship, or a nonprofit. Also, think about whether you plan to have a home-based, center-based, or multi-site facility. This will largely be determined by budget and your unique goals for your business. Don’t forget to research and acquire the correct licensing and make sure your business is compliant with local regulations.

4. Market analysis

Look at population data and the competitive landscape in your area. This is the best way to identify gaps in your local market that your daycare center can fill. What’s missing in the neighboring childcare options? This is also an opportunity to look at your total addressable market (TAM). How many working parents live in your neighborhood? Are the birth rates in your area supportive of another childcare facility? This demographic data will also inform the specific types of care you want to offer, like infant care, extended hours, bilingual programs, and beyond.

5. Target audience

Jack of all trades, master of none. Rather than casting a wide net, you want to start your childcare business with a clear picture of the types of families you can serve. When you define your niche and the children you are prepared to serve, you’ll set yourself up to generate enrollments with the right families. Things to consider are what income level families you want to serve, what ages you can cater to, and what needs you’re prepared to fulfill, whether it be part-time care, special needs programs, or anything in between.

6. Program and services

This is the fun part! Your programs and services are guided by your curriculum philosophy. Will you have a Montessori center, play-based learning, or STEM? Think about what your daily schedule looks like and what kind of enrichment activities you’ll center the kids’ days around. What kind of meals and snacks will you provide midday? Will you offer pick-up and drop-off services? Document each of these details within your business plan. 

7. Marketing & Enrollment Strategy

“If you build it, they will come” is an outreach strategy set for failure. After all, your childcare business is not the field of dreams. Your branding, website, and marketing strategy should be intrinsic to the launch of your daycare business. Create a list of outreach methods you want to kick off with. Consider social media marketing, email marketing, local community events, print ads, referral programs, and local partnerships. Then address your enrollment process: how will you intake new families? Will you use a customer relationship management system (CRM) with a digital tracking system? Will you have a digital intake form, or do you plan to do things manually with paper documentation? These are important questions to ask yourself in the planning phase.

8. Financial Plan

Starting a business is no small investment, and the expenses add up even quicker than you think. You’ll need to add up your start-up costs and determine where your initial investment will come from. Don’t forget about licensing costs, insurance, and renovations (if your business is in a commercial brick-and-mortar). Then factor in the monthly operating expenses like payroll, rent, food, and supplies. What are your revenue projections? What will your tuition pricing be? How many kids do you expect to enroll, and what’s your capacity? And, what role will grant funding play in your enrollment process? These are all essential components in a comprehensive financial plan.

Understand your potential earnings

Surely you’ve wondered how much your daycare could potentially earn and what you can plan to take home as the owner, after all, you have to be able to afford your cost of living. Here are some general income expectations for daycare owners. 

How much does a daycare owner make a month? 

The average monthly income for a daycare owner in the U.S. varies widely based on location, facility type, and enrollment size. According to Salary.com, daycare owner salaries in the U.S. typically fall between $5,400–$7,700/month. Here are some ballpark ranges to give you a clear picture:

Home-based daycare

• Small setup (up to 6 kids), great for owners running solo or have minimal staffing needs:

  • Monthly revenue: ~$4,000–$6,000

  • Estimated profit: ~$2,000–$3,000 after expenses

• Larger in-home daycare (up to 12 kids):

  • Monthly revenue: ~$8,000–$12,000

  • Estimated profit: ~$4,000–$6,000

Center-based daycare

• Mid-sized center (around 20 children), requires multiple staff and higher overhead:

  • Monthly revenue: ~$20,000–$30,000

  • Estimated profit: ~$5,000–$10,000

• Large center (50+ children):

  • Monthly revenue: $60,000–$90,000+

  • Estimated profit: $15,000–$25,000+, depending on tuition rates and operating costs

How much does a daycare owner make annually?

Just like with monthly income, a daycare owner’s annual earnings can vary a lot depending on setup, location, and business model. According to Salary.com, daycare owner salaries in the U.S. typically fall between $65,000–$92,000/year. Here's a general look at what you can expect:

Home-based daycare owners

• Annual revenue: ~$48,000–$120,000

• Estimated annual profit: ~$24,000–$60,000

Owners with lower overhead and steady enrollment can take home a solid income, especially in areas with higher tuition rates.

Center-based daycare owners

• Annual revenue: ~$240,000–$1M+

• Estimated annual profit: ~$60,000–$300,000+

Larger centers with full enrollment and additional programs (like summer camps) can generate six-figure profits, but they also come with higher staffing, facility, and operational costs.

Factors that affect your take-home pay:

• Location & demand in your area (tuition rates, competition)

• Enrollment capacity (how full your center stays)

• Services offered (enrichment programs, after-hours care, etc.)

• Operating efficiency (smart staffing and expense management)

Track every dollar: expense management

In order to run a financially stable business, you need to take a comprehensive look at your expenses. It’s important to make sure nothing falls through the cracks so that you don’t run into unpleasant surprises at the end of each month. Here is a boilerplate list of common daycare expenses to consider. Keep in mind, every childcare center is different, so don’t forget to factor in the costs that are unique to your business:

• Staffing: Wages, benefits, training, and background checks
  Licensing and insurance: State licensing fees, liability insurance, and workers’ comp

• Food and supplies: Meals, snacks, diapers, wipes, and cleaning products

• Utilities: Electricity, water, and internet

• Facility costs: Rent or mortgage, property taxes, maintenance, and security

• Learning materials and curriculum: Books, toys, software subscriptions, and activity kits

• Marketing and enrollment: Branding assets, website, social media ads, printing flyers, and photography

• Technology and administration tools: Childcare management software and payment processing

• Continuing education and certifications: CPR, first aid, and early childhood development training

• Professional services: accountants, legal professionals, and consultants, if applicable

Don’t worry if this list feels overwhelming. Luckily, there are childcare-specific tools out there designed for center owners like you. Playground, for example, makes expense tracking effortless. With features for payroll, tuition collection, and other recurring costs, get a unified view into where every dollar is going.

Diversify your revenue streams

There are many ways you can bolster the financial stability of your childcare business, but the most powerful method is by maximizing your revenue streams. This means if one takes an unexpected hit, you have other money-makers to rely on. Some options for additional revenue streams include:

• After-hours care: Many parents don’t work traditional 9- 5 jobs, and some have unpredictable schedules. Offering flexible pickup or after-hours services allows you to serve a wider range of families, giving you a competitive edge and additional revenue sources.

• Parent night out programs: Create a weekly, bimonthly, or monthly parents night out to encourage families to use your child care services for date night. This adds another income opportunity and shows families you care about their quality of life. 

• Partnerships with local businesses: Tag team with nearby employers, gyms, or apartment complexes to offer childcare perks or discounts to their employees or residents. This builds a sense of community and drives enrollment with neighboring families.

• Summer camps or holiday break care: School breaks are just another business opportunity for you! If you can offer themed camps or drop-in care during summertime and holidays, you can increase your revenue while giving working parents a much-needed break.

• Transportation services: Some busy families who juggle multiple schedules would benefit from you taking pick-up and drop-off duty off their plates. In fact, this could be the selling point for families who are choosing between you and the center down the street. 

Optimize enrollment and retention

There are so many opportunities to communicate with your prospects between the time when they learn you exist, engaging with your content, enrolling, and staying enrolled, which is why you need to make sure your enrollment process is set up to turn leads into customers and keep them coming back.

• Marketing strategies: An online presence, social media ads, local networking, and referral programs can help get the word out about your fantastic offerings and recruit families into the top of your sales funnel.

• Tour and onboarding experience: Your facility tours and onboarding experience are your second opportunity to make a big impression on potential new families. It’s important to make sure you have set processes for these steps so that you can make sure it goes swimmingly every single time. 

• Operational practices: Standardize your high-quality care, communication with parents, and staff training, so that everyone knows what to expect and can always count on you for incredible customer service. 

• Parent engagement & community-building: Communication and engagement with your families doesn’t stop once the forms are signed! Share photos and progress updates, send newsletters, and get involved in community events to show your families and kiddos how much you care!

• Waitlist management and follow-up: If you’re on a waitlist, that means you’re doing it right! Parents are clamoring to get their kids in. But just because they’re on the waitlist doesn’t mean you should put them on ice. Keep regular communication and center updates as top priority for this group to maintain excitement.

• Promotions or loyalty incentives: Pricing specials, special promotions, and rewards for loyal patrons are a great way to open the door to more price-sensitive families and strengthen your relationship with already-enrolled families.

• Referral program: Keep it in the family! By offering a referral program to your enrolled families, you empower them to attract new enrollments for you. Encourage them to tell their friends by giving monthly discount incentives.

Plan for financial sustainability

To truly protect your business from financial pitfalls, you have to make sure you’re prepared in every way possible. Here are some safety measures you can put in place right away, and others you can create as mid- and long-term goals:

• Set financial KPIs and review regularly: It’s hard to know how your business is doing financially without setting key performance indicators (KPIs). These will help you stay on track with your expense tracking and help you hit your financial and growth goals.

• Emergency funds and cash flow planning: Ideally, you’ll always keep a nest egg of emergency funds in case. While childcare is a relatively recession-resistant business, with economic uncertainty and seasonal enrollment fluctuations, it’s important to build a safety net as quickly as you can.

• Investing in growth: You’ll want to constantly improve your business with small but meaningful upgrades along the way—but, like everything else, that costs money! Things like facility upgrades and staff development are worthy investments that can help you provide better care to your families and increase enrollment pricing.

If you’ve ever asked yourself, “Are daycares profitable?” or “How much do daycare owners make?”—the real answers depend on how well you manage the business side of your center. Profitability is possible with intention, strategy, and ongoing financial oversight.