There are close to one million daycare centers all around the United States, and the market for it doesn’t seem to stop growing.
Experts anticipate the expansion rate of daycare centers to be around 3.8% by 2027.
This shows that society needs daycare centers at an increasing rate, so they are a very necessary business for many.
Looking at these numbers, it is absolutely normal to think of opening a daycare center if you are an entrepreneur or looking to own your first business.
When you are trying to make such a decision, the first question that pops up is how much daycare owners make.
This article will cover all the details surrounding the income of daycare owners and how much you can expect to make.
Average Income of Daycare Owners
The income of a daycare center depends on how many kids you are taking in and how much you are spending on your overall costs.
So that’s why it’s really hard to come up with an exact number about how much you can expect.
However, there are some reports giving us a glimpse of the average numbers that daycare owners make.
Zippia says that the average hourly income is $13.32, which equals about $27.700 a year. But the average number a daycare owner can expect to make is between $20,000 to $60,000 annually.
Depending on the size of your daycare and the children you have, this number could also be well above $100,000 or even more if you have more locations or a very big center.
Daycare Business Finacial Statistics
| Daycare Owners | Average Amount |
|---|---|
| Monthly Income Range for Daycare Owner | $1,667 to $5,000 |
| Annual Income Range for Daycare Owner | $20,000 to $60,000 |
| Average Profit Margin for Daycare | 15% |
| Average Salary Range for Daycare Workers | $18,000 to $37,000 annually |
| Median Daycare Teacher Salary | $30,000 annually |
| Median Teacher Assistant Salary | $29,360 annually |
How much does A Daycare Owner make a Month?
On average, a daycare owner can expect to make between $1,667 and $5,000 per month, based on the reported annual income range of $20,000 to $60,000.
However, it’s important to note that these figures can vary significantly depending on factors such as the size of the daycare center, the number of children enrolled, and any additional locations or large centers, which could potentially increase earnings to well above $8,333 per month or more.
The income of a daycare owner is influenced by the number of children enrolled and the overall costs incurred in running the business.
Average Profit Margin
One of the reasons why daycare centers are so attractive is that they have a rather larger profit margin on their revenue than some businesses.
That way, you can make the same amount of money or more with less effort compared to some other industries.
According to some reports, the average profit margin for a daycare business is about 15%. A good rule of thumb for a profit margin for most industries is about 10%.
A daycare business’s profit margin is higher than the average profit margin of a business.
Average Money Daycare Employees Earn
The salaries of daycare employees vary based on the location, size of the daycare, and the experience one has.
The latest salary reports show us that the average salary range for daycare workers is between $18,000 and $37,000 annually. However, there are many different workers in a daycare.
Bureau of Labor Statistics says that the median daycare teacher salary is about $30,000 annually, and for teacher assistants, it’s $29,360 annually.
These numbers could be very higher than these if you are a very experienced teacher or living in a high-cost area such as California.
Here is a breakdown of top-paying states:
| Highest-payer states | Annual mean wage | Hourly mean wage |
|---|---|---|
| District of Columbia | $37,300 | $17.93 |
| California | $35,390 | $17.02 |
| Massachusetts | $34,920 | $16.79 |
| Washington | $34,020 | $16.35 |
| Colorado | $33,340 | $16.03 |
Factors Affecting Daycare Owners’ Income
As we mentioned before, daycare owner income is not one-size-fits-all; many variables affect your income. In fact, these factors can make or break your business altogether.
That’s why you should take special care of these factors and try to understand them as much as possible to find the most optimal solution.
How many kids can you take in
The main source of income for daycare is the number of kids you have at your daycare.
Every kid means an extra source of income, so the more you have, the more income you can have, but there are limits to it.
Most of the time, the amount of total kids you can have at your daycare is governed by law.
The number of employees, the size of the daycare, and the facilities you can offer are all important factors in increasing this number. The more you can increase this number, the more income you can make.
Operation hours
Daycares must operate on a wide operation hours scale to accommodate all kinds of parents’ kids.
If you have operation hours longer than usual, parents from different industries can easily drop their kids off.
The most important detail here is about your target market. If you have a target audience, you already know the working hours of this audience, and you can arrange it accordingly.
However, most daycare centers have a wide range of operating hours every day to try to accommodate everyone.
Location
Your discoverability and the easiness for parents to drop off and pick up their kids are important factors.
If you are in the center, busy area, more people will see your center, and more parents will be open to coming to you.
Because it’s easier to come and go for their kids, and your rent, taxes, and similar property costs will all be determined by your location.
How Much Do Daycares Cost to Open?
One of the most vital things about a business is the costs associated with opening it up.
You might plan to make a lot of money, but if you don’t have financing or enough cash to support the start-up costs, you can’t get your business off the ground.
A daycare business could cost anywhere between $10,000 to $3 million in start-up costs alone.
Of course, this is a huge difference, and you might wonder why that is. Here is a breakdown of the type of daycares and their estimated costs:
| Type | Average Cost |
|---|---|
| Small In-Home Daycare Center | $10,000-$50,000 |
| Small Daycare Facility | $50,000-$100,000 |
| Large Daycare Facility | $100,000-$500,000 |
| Large Daycare Franchise Facility | Up to $3 million |
As you can see, the reason for the big difference is the type of daycare. If you open a very small one in your house, you could spend as small as $10,000, but your revenue will be equally lower.
The more you spend on start-up costs and the bigger your facility, the more revenue you will make.
What Permits and Certifications Do I Need to Open a Daycare?
As a daycare owner, you will be taking on the responsibility of many children, which is not an easy task.
That’s why you have to prove to the state that you are capable of taking care of children as a daycare owner.
For this, states require you to have certain certifications and permits before you open your daycare.
You can get these certifications and permits from the state because daycare businesses are regulated at a state level.
Because they are regulated at a state level, this means that the regulations might differ from state to state.
However, there are some common permit and certification needs in most states.
- Family childcare home permit (for in-home daycare centers)
- Food handler certification
- First Aid and CPR Certifications
- General business permit
- Group family childcare permit
- Health and safety permit
- Director’s license
Remember that some states might not require all and require only some of them. Additionally, some states might require way more than these and in more detailed versions.
That’s why it’s important to talk to your state authorities to get the exact requirements for permits and licenses.
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Conclusion
It is no doubt that the need for daycare businesses has been increasing steadily over the years, and it doesn’t seem that it’s going to stop.
There are close to a million daycare centers, and the average income for a daycare owner is between $20,000 to $60,000.
However, depending on several factors, such as the location, the number of kids you take in, and operation hours, this could be well over $100,000.
A daycare center’s profit margin is about 15%, which is higher than most other businesses out there, making it more lucrative than average.
You can expect to spend between $10,000 to $3 million in opening a daycare center, depending on its type.
Overall, if you have the cash to open a daycare center and you think you can handle kids, a daycare center could be a tremendous business.
FAQ
What is the difference between a large and a small daycare facility?
The main difference is the number of kids you can take in at the same time.
Your facilities and equipment will be enough for a number of children, and large daycare facilities can take up much more than smaller ones. The large ones also employ quite a lot of teachers and assistants.
Can everyone open a daycare facility?
Even though technically you can after getting all the necessary permits, a daycare facility is not for everyone. You must love working with kids and enjoying your time with them.
Is it possible to fail with a daycare facility?
A daycare facility is no different than any other business in its essence. It needs maintenance, time spent on it, and effort to run it.
If you can’t manage to cover your expenses with your income, you will lose money and eventually fail.
Sources
https://childcaredesign.com/how-profitable-are-daycare-centers/
https://www.zippia.com/daycare-owner-jobs/
https://www.projectionhub.com/post/the-daycare-business-plan-blueprint-examples-template
https://mybrightwheel.com/blog/average-daycare-worker-salary
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.