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How Much Does a Home Daycare Provider Make?

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Kelsey Montgomery

Kelsey Montgomery

Writer & Community Manager for FCC Providers

Wondering if starting a home daycare is worth it? We get it.

Of course you need to know if your time, money, and hard work will pay off! If you’re quitting your job to start a daycare, you need to make sure the trade-off makes sense. Or maybe you need some information to show your spouse that dedicating  a part of your home—your personal space—is the right move.

In other words, you need to figure out if owning a home daycare is profitable.

But here’s the thing: if you Google how much a daycare Provider makes, you’ll notice that the salaries on Payscale or ZipRecruiter are all over the place. And they may be a little lower than you were expecting, too. What gives?

It turns out that those numbers are misleading and a bit meaningless. Why? Because everyone’s situation is different. How much you’ll make will depend on your location, experience, licensed capacity, and personal expenses.

Think about it:

  • A brand new Provider licensed for 6 kids will make less than an experienced Provider who’s licensed for 10. 
  • A Provider with 2 kids of their own in their daycare will make less than a Provider who doesn’t.
  • A Provider who lives in an expensive city or suburb will make more than a Provider who lives in a rural area.
 

In this post, we’ll explain what exactly goes into determining your revenue and show what 3 real-life Providers actually made in 2020.

But if you want to know exactly how much you would earn by opening a home daycare, we can help. Take the assessment below and let us know your location, experience, and story to determine your true earning potential.

 

 

 

How much money do you make running a home daycare?

There are a handful of factors that can affect how much a home daycare Provider makes. Here are the most common ones:

 

1. Location

Where you live matters. Ideally, you want parents nearby who are willing to pay for high-quality child care. We tend to see that the more populous an area is, the more competitive the child care market. Usually, Providers in these markets can set their rate at least 1.25x more than their rural counterparts. 

But if you live in a more rural area, you might find that it takes more time to fill your open spots. Plus, your pay might not be as high as someone who lives in a higher income area like the city or suburbs. 

 

2. Capacity

New Providers usually start with a license for up to 6 kids—with some rare exceptions. This is the case in Massachusetts, and other states have a similar policy.

But when we say “up to 6 kids”, this means you can only have six enrolled kids at a time in your daycare space. Most of our Providers who have a license for 6 actually have more than 6 kids enrolled. How? As you’ll see in our real-life examples below, they take on a bunch of part-timers! 

It’s typical to charge a higher daily rate for part-time children than you would for those enrolled full-time. By mixing and matching enrollments to your licensing capacity, you can make more money and serve more parents in your community.

As you grow in your career as a Provider, you can request to increase your capacity to 8 or even 10 children. Higher capacity = more revenue.

 

3. Age Ranges

If you’re a parent, you probably know that child care for an infant costs more than it does for a preschooler. That’s because an infant requires constant attention and care. But that can also mean increasing resources and hiring an extra set of hands to help out, which can raise your operation cost. 

A preschooler usually doesn’t need as many resources, which can be less stressful and less costly, but they typically don’t bring in as much revenue.

Below you’ll see that Providers usually have different rate tiers for infants (8 weeks to 14 months), toddlers (15 months to 2.8 years), and preschoolers (2.9 to kindergarten). 

Your daycare’s age range is your preference. We know Providers who love working with 1 or 2 infants at a time. We know others who enjoy having a daycare full of older kids of the same age. Either way, your daycare’s age range will influence your revenue.

 

4. Your Own Children

So many Providers start a daycare to spend more precious time at home with their own little ones. It’s a huge perk of the job, plus it helps you put the money you would’ve spent on child care into your own pocket.

But if you think about capacity, each kid of your own in your daycare will take a full-time spot.  It’s something to keep in mind when trying to figure your potential revenue. 

 

5. Expenses

Starting a home daycare is an investment. To get up and running, you’ll have to buy furniture, supplies, sensory materials, books, and more. If you leave it there at the basics, the typical home daycare startup cost is about $3000. But some Providers invest even more by repairing or renovating their homes, which can add hundreds or even thousands of dollars to your startup budget.

This is all to say that if you put money into starting your daycare, it might take some time to break even. By keeping it simple in the beginning and spending around $3,000, you should be able to break even after your first month of having a few enrollments.

 

How Much Did Home Daycare Providers Make in 2020?

Now for the fun stuff! We’ll walk through what 3 different Providers actually made in 2020, broken down by enrollments and location, so you can see how it all works. 

 

Provider #1: Licensed for 6

Location: Haverhill, MA (City)
$ $76,906
50
Annual Revenue
  • Enrollment Breakdown

  • 2 yr old - Full-time - $325/week
  • 20 mo old - Part-time (1 day) - $75/week
  • 3 yr old - Part-time (3 days) - $195/week
  • 11 mo old - Part-time (4 days) - $300/week
  • 23 mo old - Part-time (3 days) - $130/week
  • 20 mo old - Part-time (1 day) - $75/week
  • 18 mo old - Part-time (4 days) - $300/week
  • 20 mo old - Part-time (1 day) - $75/week

Provider #2: Licensed for 6

Location: Auburn, MA (Rural)
$ $46,404
60
Annual Revenue
  • Enrollment Breakdown

  • 19 mo old - Full-time - Their child
  • 3.5 yr old - Full-time - Their child
  • 2 yr old - Full-time - $275/week
  • 16 mo old - Full-time - $275/week
  • 23 mo old - Part-time (4 days) - $220/week
  • 2 yr old - Part-time (2 days) - $120/week

Provider #3: Licensed for 6

Location: Westborough, MA (Suburb)
$ $80,295
60
Annual Revenue
  • Enrollment Breakdown

  • 18 mo old - Full-time - $275/week
  • 18 mo old - Full-time - $275/week
  • 20 mo old - Full-time - $275/week
  • 2 yr old - Part-time (3 days) - $165/week
  • 2 yr old - Part-time (3 days) - $165/week
  • 2 yr old - Part-time (2 days) - $110/week
  • 18 mo old - Part-time (3 days) - $165/week

 

 

Is a home daycare profitable?

As you can see from the real-life examples above, home daycares can generate a good amount of revenue. But whether or not you’re profitable depends on your costs and the number of your own children taking up spots.  What you make as a Provider is unique to you—it’s a combination of your location, capacity, age ranges, and family situation.

To understand how much of an investment opening a home daycare is, check out our article on startup costs and how to set a budget.

As far as revenues go, we can help you find out your exact earning potential. Get started by taking the quiz below, and we’ll tell you how much you can earn.

 

 

About NeighborSchools

NeighborSchools helps caregivers open and run high-quality licensed Family Child Care. Since 2010, one out of every five Family Child Care Programs in the US have closed permanently, leaving families with fewer options for child care when they need it most. Child care centers charge parents too much, and pay educators not enough. Family Child Care is the solution.

We started NeighborSchools in 2018 to turn the tides and help the best educators and caregivers successfully launch their very own programs.

We are a mission-driven company, based in Boston. Want to learn more? Send us an email.

 

Kelsey Montgomery

Kelsey Montgomery

Writer & Community Manager for FCC Providers

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