🎯 The business: licensed child care for a small group of children in your own home, usually six to twelve depending on your state and license. Parents across the country struggle to find infant and toddler care near home, and a warm, reliable home provider often has a waiting list. It is a licensed, inspected business with long days, and it pays best when you plan the money as carefully as the children’s day.
At a glance
| Money to start | ≈ $4,300, in a home that can pass inspection |
| Time to the first enrolled child | 2 to 6 months, mostly the state license |
| Hours | About 50 to 55 a week with children, plus cleaning, shopping and records |
| Skills that matter most | Patience, safety habits, clear rules with parents, steady record keeping |
| What a full month can pay | About $5,774 before tax with six children (worked below) |
Is this for you?
It suits someone who has raised children or worked in child care, wants to be home, and likes a predictable day. You become a big part of each family’s life, and many providers keep the same families for years.
It is a poor fit if you need privacy at home during the day, or if your household cannot live with a home that is partly a child care business. Everyone over a certain age who lives there will need a background check. You cannot step out for an errand; if you are sick, you need a licensed substitute or you close.
Who pays, and what
Working parents pay weekly or monthly tuition, usually in advance. Infant care costs the most because the ratios are lowest. Many families also pay with help from the state child care subsidy program, which pays licensed providers at set rates; check whether your state’s rate is close to your private rate before you accept it.
The USDA Child and Adult Care Food Program (CACFP) also pays licensed home providers for healthy meals and snacks served to enrolled children, through a local sponsoring organization. It does not cover all your food, but it is real money every month.
What it takes to start
| License application, orientation, fingerprint background checks, pediatric CPR and first aid | $400 |
| Home safety work: gates, outlet covers, smoke and carbon monoxide alarms, fire extinguisher, fence repairs | $800 |
| Cribs or play yards, nap cots, high chairs, small tables and chairs | $1,200 |
| Toys, books, art supplies, storage bins | $800 |
| Child care liability insurance (first payment) | $600 |
| Outdoor play equipment that meets your state’s rules | $500 |
| All-in | ≈ $4,300 |
These are example costs. License fees, required training and what the inspector asks you to fix vary a lot by state and by house. A home that needs a fence or a second exit costs more.
Start to finish: the steps
1. Read your state’s family child care rules. Find your state child care licensing office. Most states have at least two types of home license, a small one for one provider and a larger one that requires an assistant. Write down the number of children allowed, the infant limit, whether your own children count, and the training hours.
2. Check your housing and zoning. If you rent, read the lease and ask the landlord in writing. If you are in an HOA, read the rules. Ask the city or county whether a licensed family child care home needs a zoning or home occupation permit. Some states, California among them, treat licensed family child care homes as a residential use that cities cannot ban.
3. Attend the orientation and apply. Most states require an orientation session, an application, fingerprint background checks on you and other adults in the home, and health and safety training, including pediatric CPR and first aid.
4. Make the home pass. Fix what the rules and the inspector will check: gated stairs, covered outlets, locked-up medicines and cleaners, working smoke and carbon monoxide alarms, a fire extinguisher, safe sleep space for infants, a fenced outdoor area, and an emergency exit plan posted on the wall.
5. Get insured. Homeowners and renters policies usually exclude business activity, especially child care. Buy child care liability insurance, tell your home insurer, and ask about accident coverage for the children. See Business insurance.
6. Write your parent handbook and contract. Hours, tuition and when it is due, late pickup fees, sick child rules, holidays and your vacation weeks, what you provide and what parents bring, and how either side ends care. See Leases and contracts.
7. Sign up with a CACFP sponsor. Your state agency lists sponsoring organizations for family child care homes. The sponsor trains you on menus and records and pays the reimbursement each month.
8. Enroll your first families. List with your local child care resource and referral agency, post on neighborhood groups, and let local employers and churches know. Hold an open house on a Saturday. Fill infant spots carefully; one infant changes your whole ratio.
9. Grow to a larger license. After a year, if you have a waiting list and a reliable assistant, consider a large family child care license. Some providers later move to a center, which is a different, much bigger business.
Pricing
| Infant, full time (example) | $1,300 a month |
| Toddler, full time | $1,100 a month |
| Preschooler, full time | $1,000 a month |
| Registration fee, once a year | $50 to $100 |
| Late pickup | $1 to $2 a minute after a 5-minute grace |
| Your vacation and holidays | Tuition still due; say so in the contract |
These are example prices for a mid-cost area. Rates vary several-fold across the country. Call your local child care resource and referral agency or look up your state’s most recent child care market rate survey, and set your price from that. Charge for the spot, not for attendance; your costs do not drop when a child stays home.
The math
A small home with six children: two infants at $1,300, two toddlers at $1,100 and two preschoolers at $1,000 is $6,800 a month in tuition.
CACFP pays Tier I home providers in the contiguous states $1.74 for a breakfast, $3.31 for a lunch and $0.98 for a snack for July 2026 to June 2027, or $6.03 a child a day. Six children for 20 days is 6 × 20 × $6.03 = $723.60; call it $724. Tier II rates, used when neither the area nor the provider qualifies for Tier I, are much lower. Revenue: $7,524.
Monthly costs: food $900, a substitute or assistant for a few days $300, diapers, wipes, art and cleaning supplies $250, extra utilities $150, insurance $100, and training and license renewal set aside $50. That is $1,750, leaving $5,774 before tax.
That is about 55 hours a week with children, so the hourly pay is modest, and an empty spot costs you $1,000 or more a month. The IRS lets home child care providers deduct part of their home costs using a time-space percentage, and lets them use standard meal rates for food; IRS Publication 587 explains both. See Small business taxes.
Getting customers
Your local child care resource and referral agency is the first listing, because parents call them. Then: a Google Business Profile, neighborhood groups, pediatricians’ offices, churches, and employers near you. A tidy, safe-looking home and a calm tour sell the spot. Keep a waiting list with dates, and ask enrolled families for referrals when a spot is coming open.
Running it week to week
A predictable day helps the children and you. Keep daily attendance with arrival and departure times, meal counts for CACFP, and any incident or medication log your state requires. Plan menus a week ahead to meet CACFP meal patterns.
Clean and sanitize surfaces and toys every day. Run fire drills on the schedule your state sets. Once a week, check that tuition is paid, shop, and update parent notes. Once a month, submit CACFP claims through your sponsor.
Rules to check
Licensing. Nearly every state licenses family child care homes, and each sets its own limits, and many let people care for a small number of unrelated children without a license. Do not rely on that exemption if you want CACFP or subsidy families, which require a license or registration. As one example, California’s small family child care home license allows six children, or up to eight when some are school-age and no more than two are infants; the large license allows up to twelve, or fourteen, with an assistant present. Your own children under ten count toward California’s limits.
Background checks. Federal child care law requires states to run comprehensive background checks, including fingerprints, on licensed providers and, in family child care homes, on other adults living there. Plan for every adult in the house.
Health and safety. Expect rules on safe sleep for infants (on their backs, in a crib or play yard with nothing else in it), immunization records, medication, emergency plans and training hours each year.
Zoning and housing. Some states protect licensed family child care homes from local zoning bans; others leave it to cities, which may require a permit, especially for large homes. HOAs and leases can have their own rules. Ask before you apply.
What goes wrong
An injury or a sleep accident is the worst case. Follow safe sleep rules every time, supervise by sight and sound, and keep the ratios even on a hard day. A complaint to licensing can bring an unannounced visit; clean records are your best defense.
The money risks are empty spots, families who stop paying, and burnout. Charge tuition in advance, end care in writing when a family falls two weeks behind, and take real vacation weeks that are written into the contract.
Questions people ask
How much does it cost to start a home daycare?
About $4,300 in a home that can pass inspection: licensing and training, safety fixes, cribs and cots, toys and books, insurance and outdoor play equipment. A home that needs a fence or exit changes costs more.
Do I need a license to run a daycare from my home?
In most states, yes, once you care for more than a few unrelated children. The exact number differs by state. You also need a license to join CACFP or take state subsidy families.
How many kids can you have in a home daycare?
It depends on your state and license type. California, for example, allows up to six or eight in a small home and up to twelve or fourteen in a large home with an assistant, with limits on infants.
How much does the CACFP food program pay home daycares?
For July 2026 to June 2027, Tier I home providers in the contiguous states get $1.74 per breakfast, $3.31 per lunch or supper and $0.98 per snack. Tier II rates are lower.
How much do home daycare providers make?
With six children at the example prices above, about $5,774 a month before tax. Your local tuition rates decide most of the answer.
Free help
Your state child care licensing office runs free orientations. Local child care resource and referral agencies (find yours through Child Care Aware of America) help with training, start-up questions and referrals. Your state CACFP agency lists sponsors. The National Association for Family Child Care offers accreditation. SCORE and your local Small Business Development Center help with the business side. More in Bookkeeping basics.
CACFP rates change every July; the ones here run July 2026 to June 2027. Licensing limits differ by state and change; check your state licensing office before you apply. Facts checked November 2026.