How to Start a Daycare in Canada: 7 Tips Every Owner Should Know
Starting a daycare can be a highly rewarding business, however you need to keep in mind that it is also a highly regulated industry with significant upfront investment and planning required. Whether you are starting a small home-based daycare or licensed facility with high childcare volume, here are 7 essential tips to keep in mind when launching your start-up childcare business:
1. Know Your Province's Licensing Requirements
Each province in Canada has its own licensing ministry and regulations. For example, in BC daycare operators must follow the Child Care Licensing Regulation under the Community Care and Assisted Living Act (CCAL). In Ontario, the regulations fall under the Child Care and Early Years Act (CCEYA).
► KEY TIP: Familiarize yourself with your province's Ministry of Education website to familiarize yourself with the inspection and regulation guidelines for your daycare business.
2. You Need a Strong Business Plan
Even if you're opening a small daycare business, a professionally-written business plan for day care is a must. Your business plan will be used to secure funding but will also be critical in mapping out your space requirements, staffing ratios, profitability and will create the details needed to provide to your Ministry for licensing approval. Lenders, grant programs and licensing authorities all need to see that your daycare is structured and well organized prior to launch. To learn how we help. view our childcare business plan writing services.
► KEY TIP: Work with a professional business plan writer to create a comprehensive business plan as a strong starting foundation.
3. Calculate Your Startup Costs
New daycare owners commonly underestimate just what level of investment is required to set up a licensed childcare centre. Leasehold improvements typically represent the largest expense area and can range from $100,000-350,000, depending on the size and scope of the centre you wish to create. Other start-up costs can include:
Furniture, fixtures and equipment (including outdoor play area)
Licensing, insurance and professional fees
Working capital to cover your early months for rent, staff wages and other operating costs
► KEY TIP: Create a detailed budgeting plan for your start-up daycare, especially when applying for financing or government grants.
4. Know How Much You Need to Personally Invest
Typically, a small business loan will cover 80% of your daycare's costs, and you are required to have 20% cash in the form of "owners' investment." For example, if total start-up costs are $350,000 for a larger centre, 20% owners' investment is approximately $70,000. By clarifying your initial investment you can create a scope for the size volume for your childcare centre. You may also wish to secure an investor to open more financing possibility. We assist new daycare and school owners in this area with our professional pitchdeck services.
► KEY TIP: Determine how much you are able or willing to invest in this business to determine the size of your daycare.
5. Staffing Requirements are Legally Defined
Most provinces will determine the minimum staff-to-children ratio, and certain roles must be filled by certified Early Childhood Educators (ECE). For example, in British Columbia, an infant/toddler program requires 1 ECE for every 4 children.
In addition to determining your personal role in the business, you will also want to plan for:
A qualified daycare Director (and/or Program Manager)
ECE Assistants (ECEAs)
Infant/Toddler ECEs (IT ECEs)
Cook and cleaning staff
► KEY TIP: Build your HR plan before applying for your license.
6. Determine What Type of Program You Want to Offer
Long gone are the days where a daycare centre is just seen as general "babysitting." Rather, childcare centres and facilities are expected to offer an excellent childcare program. Some examples of childcare program focuses include: play-based, cognitive, Montessori, religious and more. In planning your program, you get to envision the benefits you would like to offer children in your community through your centre.
► KEY TIP: Based on your childcare experience or research clarify what kind of childcare program you would like to offer.
7. You’ll Need a Parent Handbook and Policies Manual
In addition to preparing your daycare operations, you must also have key documents and forms to meet licensing requirements. These include:
A childcare contract
Illness and immunization policy
Emergency response plan
Parent communications
Fee structure and payment terms
► KEY TIP: Make a list of all the policies and forms you will need for your childcare centre (including required documents for your province). Contact us if you need assistance in creating these documents.
Final Thoughts
Opening a daycare takes vision, patience and a solid foundation. A comprehensive business plan offers you a clear financial guide and covers all areas of your operations to open with clarity and confidence. Whether you are currently in the early stages or ready to apply for your license or funding, we are here to help. Contact us today to discuss your daycare business
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Newton Group Marketing | Business Plan Canada
At Newton Group Marketing we craft professional business plans, proposals, pitchdecks and investor materials for the childcare industry. Contact us today to schedule a free consultation.