Are you looking to open your own child care center, but not quite sure where to start? Before you start buying toys, and bringing in customers, you need to get a license. Proper licensing of your center ensures your operation isn’t only compliant with the law, it keeps the children in your care safe.
Each state has its own rules and requirements for people to get a child care license application approved and start their own daycare business. If you live in Texas, all of its child care licensing is handled and administered by the Texas Department of Health and Human Services (HHS) and its Child Care Licensing (CCL) Division.
There are four types of child care licenses in Texas you’ll choose to apply for depending on the type of operation you decided to run:
Listed Family Homes
Registered Child Care Homes
Licensed Child Care Homes
Licensed Child Care Center
Child Care Operation Types
Before starting your license application process, you need to figure out what type of child care operation you’re going to run—this will determine which type of license you need to apply for.
There are several types of child care operations you’ll most likely be operating under; if you’re not sure what type of operation your business is considered or have questions about the application process, your local CCL office can help and make sure you’re applying correctly.
Licensed Child Care Home. In licensed family child care home operations, service is provided inside the license holder’s home. Care is expected for at least two hours per day (but fewer than 24 hours per day) and for at least three days per week. The operation can care for a maximum of 12 children who are up to 13 years of age. This operation type will apply for the Licensed Child Care Home license.
Registered Child Care Home. This type of operation provides child care services inside the license holder’s home. Care is expected for at least four hours per day, at least three days per week, and for at least three weeks in a row. Registered homes can take care of at most 12 children at any given time. This operation type will apply for the Registered Child Care Home license.
Listed Family Home. In listed family homes, family child care services are provided inside the home of the license holder. Care is expected to be provided to children from newborn age to 13 years old. The license holder should provide care for at least four hours per day, for three or more days per week, and for at least three weeks in a row. This operation type will apply for the Listed Family Home license.
Child Care Center. This child care option operates in a facility outside of the license holder’s home. They are allowed to provide care for seven or more kids under the age of 14. They need to operate for at least two hours per day, three days per week. They may not provide overnight care to the children. This operation type will apply for the Licensed Child Care Center license.
Before or After School Programs. This type of child care operation provides child care for children before and after school hours and during holidays. They should also be open and operating for at least two hours every day, three days per week. Before or After School programs are allowed to care for children from ages three to 11. This operation type will apply for the Licensed Child Care Center license.
Texas’s Licensing Process
The process for obtaining your child care license is similar for both home-based and center-based providers. Here are the steps and resources you need to get your child care license in Texas. More information about Texas’s s licensing process can be found on the Texas Health and Human Services website.
Step One: Attend a Pre-Application Class
The Texas child care license application process requires you to attend a pre-application class before you file an application for your in-home family child care license. For center-based child care operations, you need to contact your local CCL office as well as attend a pre-application class. These classes discuss information like the forms you need to submit along with your license application package. You can find a nearby CCL office on the Texas HHS website.
Step Two: Review Texas’s Licensing Requirements
There are a ton of small details about obtaining a child care license in Texas that can be easy to forget about if you’re not careful. When you’re studying Texas’s licensing requirements, don’t forget to do your research on aspects of your business such as:
Municipal zoning bylaws
Building codes (for both in-home and centers)
Minimum operating standards for child safety
If you have questions about the requirements or need help with your licensing application process, all applicants can contact their local licensing office for more information or assistance.
Step Three: Submit Your CCL Application
After you’ve attended a pre-application class, you can now begin putting together your Child Care License application. Part of your application should include filling out the forms included in the information package you received in your pre-application class. If you’re applying for the Licensed Child Care Center designation license, you need to submit these forms:
Form 2911: Child Care Licensing Governing Body & Director Designation
Form 2948: Plan of Operation for Licensed Child Care Operations
Form 2985: Affidavit for Applicants for Employment with a Licensed Child Care Operation
Form 2760: Controlling Person—Child Care Licensing
Step Four: Create and Register Your Child Care Provider Account
Congratulations! If you’re a center-based operation, at this step your application has been approved, you’ve been given an operation number, and you can legally begin your family child care center. The last step is to create a child care regulation account for your center where you’ll submit any additional forms and background checks, as well as update your center’s information.
For at-home centers, you will create a child care licensing account after your pre-application class since your account is where you submit your application and other licensing documents for approval. A few days after you submit your licensing application, a representative from the Texas CLL office will review and approve your application. Once you have been approved and have received your license number, you’re all set to start your child care operation!
Toys are an essential part of any child care center. You don’t need to buy the latest gadgets for kids in your classroom to have fun. In fact, the more simple the toys, the more opportunities your kids have to be imaginative and create their own world!
It’s important to match the toys you get with the type of children your child care center will be taking care of. If you’re primarily caring for infants, you shouldn’t give them toys that pose a choking hazard like Legos. And if you’re taking care of older kids, you need to buy toys that will keep them engaged and prepare them for preschool and elementary school.
Keep in mind that not all of the toys in this article will be suitable for every age. Make sure you have a wide variety of age-appropriate toys if your child care center will serve multiple age ranges. And be sure to never leave children unattended. Here are some of our favorite essential toys for daycare centers that would be a great addition to any center.
Arts & Crafts
Arts and crafts time at your child care center can be a fun way to keep kids occupied during the day while also helping to develop their fine motor skills, problem solve, and express their creativity. Plus, it’s always fun to see kids show off their project to their parents during pickup. For daycares, you’ll always want to have some basic art supplies on hand since you never know when that creative spark will hit.
Make sure you have aprons on hand to keep everyone’s clothes from getting dirty, as well as lots of cleaning supplies in case something gets spilled (and it probably will!) Some basic arts and crafts supplies you should have ready include:
Colorful construction paper
Glue (both glue sticks and bottles)
Different sizes paint brushes
Glitter (use at your own discretion!)
Newspaper (to cover surfaces for messy projects)
Toys To Develop Fine Motor Skills
Being able to write, eat, use scissors, get dressed, and hold objects all require using fine motor skills. Developing these movements at a young age will prepare young kids for more advanced skills as they grow older. You can use fun toys and activities at your daycare to encourage young children to hone this skill naturally. Here are some fun toys that can help young kids at your center develop fine motor skills:
Wood building blocks
Small foam balls
Dolls and other pretend play items
Sensory bins with rice, water beads, sand, etc.
Some daycare centers provide educational services in addition to keeping children safe while their parents are gone for the day. These formative years are a great time to teach basic skills such as letters, numbers, interpersonal skills, and even foreign languages! More and more parents are looking for daycares that include a learning curriculum, so you’ll have a leg up on your competition if you provide these services. Since kids at this age shouldn’t sit in a desk all day, toys can be a natural addition to your teaching curriculum and keep kids engaged during lessons.
Every daycare should have books available for every reading level (and for story time!) You can often get children’s books for cheap at second hand stores and scholastic book clubs. Make sure you have a comfy area at your center with a soft rug and several pillows for a nice reading nook. Other educational toys you should have at your center include:
Musical instruments like drums and whistles
Painting and drawing supplies
Toys For Outdoor Play
Every kid loves to play outdoors. Not only does playing outside promote physical activity, it helps younger kids practice their motor skills, learn how to play well in groups and share toys, and promotes creativity. Setting aside time at your daycare for unstructured play time outside of the classroom will also help get rid of all that extra energy that gets pent up when kids are stuck inside all day.
If you have an outdoor play area at your center with a fence already installed, perfect! But if you’re running your daycare from your home, you need to make sure you have a fence to keep kids from running out into the street. Outdoor toys should be durable and easy to clean. If possible, have separate toys for inside and outside play to keep any dirt or other debris outside as much as possible. Try to have some of these basic outdoor toys at your daycare center:
Since germs and viruses can live on surfaces for several days, your center needs to regularly clean your classroom’s toys today to prevent the spread of germs and limit illnesses. Many parents are still wary of COVID-19, so having a regular disinfecting schedule can help keep your customers at ease. Toys that have been placed in a child’s mouth or that have been contaminated by other bodily fluids need to be thoroughly cleaned before the kids play with them again. Make sure to follow these steps to properly sanitize your classroom toys:
High-quality child care services are in high demand right now. Opening up a daycare is a great way to test your entrepreneurial skills and serve local families in the process. But just like any other venture, you need to have a solid business plan in place well before opening your doors to the public.
Thankfully, you don’t need an MBA to run a successful business—just some careful planning and a lot of patience. We’ve put together some tips on creating a daycare business plan that will help get your center off the ground.
Who Should Have a Child Care Business Plan?
Unless you’re planning on starting the next Amazon or Nike, your business plan can be relatively simple. Business plans are simply to help you solidify your goals, and to create a roadmap on how you’re going to achieve those goals for your new business.
Our business plan roadmap tips will be most helpful to those starting brand new daycares, but the topics we touch on can be helpful for other types of child care businesses. This includes centers who have been operating for a while but need to rethink their business strategy, preschools, or people who want to invest in a daycare franchise.
Before we get down to business, let’s remember that your daycare business plan doesn’t have to be the most professional-looking document in the world. They are mainly for you to help wrap your head around everything you need to do before opening. As long as the business plan is helpful for you, it’s doing its job.
The first part of your business plan should be to nail down the description of your business. Seems easy, but it takes a lot of introspection. This is where you will talk about your motivation for opening a daycare, a mission statement, and any goals you have for your new business. Is there a number of customers you want to hit your first year? What will motivate you to keep going when enrollments take a dive? Putting these things on paper will help make your business more tangible, and help guide your more granular business decisions going forward.
Daycare Licensing and Accreditation
Before getting too far into your research, you need to check what the daycare licensing and accreditation rules are in your state. This will set rules for your business such as the amount of children you’re legally allowed to care of, the required ratio of child-to-staff, and staff training requirements. Accreditations also show parents that your daycare meets certain quality, safety, and academic standards.
The National Association for the Education of Young Children (NAEYC) and the National Association for Family Child Care (NAFCC) are the most common accreditation organizations in the U.S. Once you have a better understanding of what standards are set for daycares in your state, you use that as a guide for other parts of your business plan like pricing, staff needs, and health and safety measures.
The next part of your child care business plan is to do some research on the daycare market. You probably already know that starting a business is always hard, but what does the daycare industry as a whole look like? What is it projected to look like in the next few years? Right now in the middle of a global pandemic, child care centers are struggling to stay open—but they’re still an absolute necessity for many families. What does that mean for opening a daycare center right now? The market research guide from the U.S. Small Business Administration is a great place to start. You’ll want to look at factors like:
Pricing. What enrollment rates and pricing models are common for daycares in your area? Location. Will you be competing with a lot of other child care centers in your preferred neighborhood? Demand. Are there lots of young families in your area? Or are you living in a child care desert? Economic Indicators. What does the average income and employment rate look like in the community?
Part of your market analysis will be to do some research on your competition. Daycare services across the country are in high demand, but does your preferred neighborhood already have a successful center you’ll have to compete with? Do some research on the other child care centers in your preferred area of operation (and maybe a little further) to see who you’ll be up against.
You’ll want to look at their pricing model, the services they offer, and anything else that makes them stand out. Maybe you’ll find a service they’re not offering that you can use to your advantage in your own center. You’ll also want to look at the demographics in your preferred area of operation. What’s the median income bracket? Are there a lot of young families close by? Are your competitors offering services you can’t yet compete with yet?
You have two main options for where to set up your daycare center: inside your home or renting out a space. Which one you decide to do will depend mainly on your business goals, but here are some other factors to consider:
Cost. Renting out a daycare facility will cost more than simply setting up shop at home. Commute. You’ll save time and money from not having to commute to work every day. Home life. It’s difficult for home-run daycares to separate home life and work life. It can also be a strain on other members of your family. Size. Home daycares limit how many kids you are legally allowed to care for, which limits your revenue. Taxes. You may receive more tax benefits from combining your workplace with your home.
Now is the time when you need to be brutally honest with yourself about your finances. Your child care business plan needs to include a section about how it will be financially run:
Are you expecting to receive or apply for any outside funding like grants, community assistance, or donations? What types of insurance will you need as a small business and employer? What taxes will you need to pay as a small business? What tax benefits can you receive? What one-time startup costs do you have to cover before opening?
After you figure out your one-time and recurring expenses, you’ll start to get a better picture of what your pricing structure should look like.
Part of your financial analysis should include your daycare’s pricing structure for customers. How much you charge for your services will depend on a number of factors. You’ll need to take into account the cost of operating and maintaining your business, the pricing of other daycare services in the area, and what the market can reasonably afford. You can get more information about the average annual and monthly cost of child care in your state at the Economic Policy Institute.
Included in your pricing structure strategy should be how often you’ll be billing customers. Make sure you keep a regular schedule with an automatic billing system to help your own bookkeeping and to make it easy for families to pay you on time.
Don’t forget to look into the tax benefits you can receive for running your own business. Especially if you’re operating your daycare from your own home, you can often write-off business expenses like food, internet, and even portions of your mortgage. You’ll want to keep a detailed log of all personal and business expenses, and maybe even talk to a tax professional to make sure you’re safe from a legal perspective, and getting the most out of your tax benefits.
If you’re planning on opening a daycare inside your own home with just a handful of children to care for, you probably don’t need to hire a staff. But if you are opening a full daycare facility, you’ll need reinforcements. Hiring qualified employees takes a lot of time. You want to make sure they’re (of course) good with kids, have the proper child care certifications, and have a child care philosophy that aligns with you and your center. Along with their base salary, you need to figure out how often you’ll pay staff, any benefits you’ll offer, and how to decide work schedules.
You can’t expect people to automatically start enrolling as soon as you open your doors. In order for parents around the community to hear about you and want to sign up, you need a solid marketing plan. At the very least, part of your business plan needs to touch on how you’re going to approach these parts of marketing your daycare:
Social media. Instagram and Facebook will be your best bets for connecting with young families. Make sure to allot some time every week (or every day if you can swing it) to promote your center on social media. Networking. Connecting face-to-face with parents is crucial for daycares. See what events are happening in your local community and be there to get the word out. Online ads. You’ll want to set aside part of your marketing budget on social media ads and Google ads. This will bring more people to your business and (hopefully) sign up. Website. Every business today needs a professional website. You’ll most likely need to hire a web designer/developer to create your site. Take a look at other daycare websites to see what you want yours to look like.
The Bottom Line
Putting together your daycare business plan before you start buying toys in bulk and stocking up on Clorox wipes will make your day-to-day work run smoother. That way, you’ll be able to focus more of your time on the children—and isn’t that why you want to open a daycare in the first place?
Once you have your child care business plan fleshed out, you want to make sure the everyday operations will run smoothly for you, your staff, and your customers. Smartcare’s child care administration software makes running a daycare simple. Learn more about our services by scheduling a demo or calling our customer service team today.
Managing a childcare business is a unique role that means you have a lot on your plate. You know that staying on top of your parent payments is crucial, but it can fall to the wayside as you focus on the day to day tasks that keep you busy. For this reason, many childcare businesses struggle to track their parent payments – and this can make it hard to pinpoint where the losses are coming from.
Making sure that parents are making payments is key, so that you can spend less time pouring over records, following up with parents that are late and trying to identify where your money is going. We’ve compiled a quick list below to help centers like yours gain your time back and more importantly- stop losing money!
Make Paying Easy
Most of us don’t carry checkbooks in our purses or pockets anymore. If a business is only accepting cash or check, it becomes an obstacle to pay for that service, and much more likely to be forgotten.
Accepting credit or debit cards in house seems like a good move. However, that means you or your staff is taking the time to physically swipe cards and parents have to be present to pay (and again, may forget if they are rushing in our out).
The best solution is to allow parents to pay from anywhere. Using a management software that has an app for parents means that parents can manage their own payment information and make a payment from anywhere.
This reduces the pain points mentioned above, and you’ll get bonus points from the parents who will be happiest with a solution that is easiest for them.
Enforce Late Payment Penalties
No one likes late fees. Parents don’t like to pay them, and Directors and Owners don’t love giving them. However, enforcing them sets a boundary for your parents and lets them know that not paying a bill isn’t acceptable.
Additionally, if using a system to accept parent payments, it’s worth checking out one that has an automatic late fee feature. This helps to take some of the responsibility off your plate. Let your parents know if they are more than 24 hours late (or whatever time frame you allow), that a late fee will automatically be added to their bill and processed when they pay.
Setting that expectation up front means your parents won’t be surprised by late fees and you’ll feel less guilty implementing and enforcing them.
Require or Incentivize for Auto-payment
Allowing parents to autopay has become a necessity. Not only does that mean regular, recurring revenue for your center (with no follow up required on your part!), but it’s also the easiest solution for the parent. Many adults prefer to pay most bills by autopay, so they know they aren’t late and are on top of all of their bills.
Consider requiring autopay enrollment for all parents or offering an incentive to parents who set it up. We’ve seen centers do a small discount on tuition for parents enrolling in autopay or a small increase in tuition for parents who don’t enroll in autopay. You’ll know what will work best for your parents.
Once you’ve set up a system to manage your parent payments, along with automatic late payment fees and most of your parents are on autopay, you should be able to sit back and relax knowing that no revenue is getting lost in the cracks.
It’s not uncommon for many childcare businesses to accept only checks and cash. With so many childcare-specific problems to solve on a daily basis, it’s incredibly easy to procrastinate on the bigger picture items. While some centers have progressed a bit and might have a credit card reader in their center, which is a great step toward convenience for the parents, that may not help the director much at all. Additionally, as the millennial generation becomes the majority of the “parent” demographic, they expect to pay for childcare as they do everything else: on their phone.
Having payment system that is integrated into your family data means that you spend less time doing administrative work and spend more time with your teachers and students.
It’s truly a win-win for everyone. It may seem overwhelming to analyze your options, decide on a solution and switch all of your existing families to a new process. Change can be difficult, especially when you have tens or hundreds of parents to get on board.
In this guide you’ll learn why in this day and age, electronic payments are not just a feature that’s nice to offer, but a must-have. Then, we will dig into how to find the best solution for you and how to implement the change for existing and new parents.
Why should I accept electronic payments?
As a childcare director or owner, you spend a lot of time doing a variety of things in your center. We’ve found that the largest amount of time is usually spent staying on top of billing parents and accepting payments. Your business has to accept payment to run, so this is a top priority out of necessity.
There are childcare management solutions out there that allow parents to pay via a mobile app, update their payment method, view their bill and access their statement history. This amounts to hours each week that you can spend elsewhere, growing your business and making it run efficiently, instead of focusing on these day-to-day tasks that can weigh you down.
Eliminating a human hand from the mix means that you’ll be reducing the risk for human error.
Let’s face it: everyone makes mistakes and each mistake is time (and potentially money) directly out of your pocket.
Using a system that can generate a recurring invoice each period, automatically charge the parent’s card or bank account, and adjust the balance accordingly, means less math for you.
A great system should also allow you to credit or adjust bills as needed or even split bills between divorced parents or automatically adjust a bill for a child who receives a state subsidy. All you should need to do is run reports to check or view data when you need to see it; not spend hours daily checking your own work.
Parents Expect It
Millennials are now the main demographic having children and searching for childcare. This group has had technology for their entire adult life and spends hours each day on their mobile phone. According to Pew Research Center, 93% of Millennials own a smart phone. Gen Z, the generation behind them is the first generation who has grown up with social media.
These groups are used to convenience. Everything from groceries to furniture is purchased with the click of a button. Your business is no exception. If you don’t accept mobile payments, but your competition does, as long as the quality of your services is deemed equivalent, they will win that match up. Meet parents needs by adopting the technology and beat their expectations with amazing service and education for their children (which you’ll be able to focus on now, with all the time you’re saving!)
How do I start accepting electronic payments?
Find a Solution
There are quite a few software solutions out there to help you manage your center. Of course, at Smartcare, we are a bit bias about our technology, but you should find the one that meets your needs. All of the options out there should offer you a demo to begin.
A software demo is your chance to scrutinize the solution being offered to make sure it does what you need.
Make sure you ask the right questions during your demo, depending on your needs. Here are some ideas, based on needs we hear:
Does the technology support your billing frequency? (weekly, monthly, biweekly)
Does it accept both credit cards and ACH? Do you have to accept both if you don’t want to?
Can parents manage their own payment methods?
Can parents access their invoices on their own?
Can parents enroll in autopay?
Can you set up automatic late fees or other fees?
How long will it take you to get set up?
Are you under a contract?
Do they offer a free trial?
If you need to charge any fees, accept deposits, etc. make sure the software has a solution for that
If you center has any unique situations, make sure to walk through it with your sales consultant. You don’t want to purchase technology that doesn’t solve your problem or makes more work for you.
Email Existing Parents
Once you’ve set up your new software, start by moving existing parents over to the new process. Depending on the size of your center, you might start with a small group (like a class or two) and keep going from there.
Email is a nice way to communicate this change to your parents for a couple of reasons. First, you can outline the benefits of the new solution for them:
Access your invoices
Manage your own payment method
View your bill
Enroll in autopay
Secondly, you can also link to the app that they need to download. As most parents will be reading your email on a mobile device, this allows them to click through and download the app right from their phone.
Starting with your existing parents (and potentially a small group of them), is a perfect way to introduce this change as they will be more forgiving as you learn the new software than brand-new parents, who haven’t yet made a judgement call on your business.
Keep in mind that any new software will have a learning curve, so while it might be tempting to rip the Band-Aid off and move everyone at once, a tiered approach like this will allow you to make sure you’ve selected the right technology and work out any kinks until you’re running smoothly.
Enroll New Parents
Focusing on new parents should be your second goal, after you’ve gotten most existing parents using your new software. Here’s where we are going to be just a little self-indulgent. Smartcare offers an online enrollment tool that makes this process incredibly easy. Send a link to parents and they can:
Enter all of their child’s information
Add pick up and emergency contacts
Add medical information and allergies
Enter a payment method
Pay any deposits needed
Enroll in autopay
This means from the minute a parent knows they want to enroll; their billing is set up with zero effort on your part.
Making sure that you have a seamless solution for newly enrolled parents means that you aren’t just saving time with the daily billing and payment tasks, but also on the enrollment end as well.
Now that you’ve got most parents set up and have a process to capture payment method during enrollment, you should optimize the software you chose and make sure you are getting the most payments at the earliest time possible.
By promoting an autopay feature you will receive parent’s payments on time and have happier parents because the process is easy and will result in less risk for late fees on their end.
We’ve seen centers get creative here. Maybe you simply send out an email blast occasionally, reminding parents to enroll in autopay, or maybe you offer incentives for enrolling. For example, you might give a small discount to parents to are enrolled in autopay, or maybe the reverse works better: if not enrolled in autopay by a specific date, then there will be a small price increase.
Parents will understand that if they don’t enroll in autopay, that means more work for you so typically, this approach makes sense and makes everyone happy.
Adopting the plan above is a surefire way to implement electronic payments for your center and make sure you find a great program to work with. If you aren’t already accepting electronic payments or using a childcare management software, hopefully this guide has helped you determine what to look for and understand how to make the change. It might seem like a big adjustment, but once you’ve made the jump you and your families will be grateful for the change.
Request a demo below to learn more about the Smartcare solution.