3 Steps to Start a Daycare With No Money| 6 Fund Raising Ways
Reading Time: 6 minutes Worried you might not be able to start a daycare because of no investment? What if I tell you you can?
Well, there’s no such thing as starting a daycare business with no money, but there are ways to arrange that investment and start without breaking the bank.
In this article, I’ll share a complete process, including how to reduce your starting cost, 6 ways to arrange the investment and a bonus of 5 free marketing methods specifically for daycares.
Interested? Let’s get in.
Starting With No Money! Is It Possible?
No. You cannot start a daycare business without any investment. You’ll need a specific amount to set up your space, get training and license and get other documents and approvals. There’s no specific number that I can quote. However, Entrepreneur has given us an average figure of $10,000 for starting home daycares in the US.
Your specific cost will depend on your expenses and the type of daycare you’re starting. For obvious reasons, a home daycare will cost way less than a center.
The point is, if you don’t have money for your daycare, you’ll have to arrange it. There’s no way you can start a daycare business without spending a dime on it.
Now let’s see how you can arrange that money.
Step 1: Identify Your Expenses
First, you need to know how much money you really need. For that, you’ll have to identify your expenses.
2 Major Expenses of Starting Daycare
All of your expenses will lie in one of the following categories.
- Setup: Location, furniture and toys
- Documentation and paperwork: License, insurance, certifications and training
Use our daycare supply checklist to help you identify what you’ll need for set up.
Go to your state’s childcare website and look at the requirements for daycare setup. You might need to buy things (like a fire extinguisher and fence of a specific height) to be in compliance with licensing regulations. Also, check how much licensing applications and background checks will cost.
Thoroughly go through each and every requirement and process and not down your expenses.
Step 2: Cost-Cutting Is the Key When You Don’t Have Money
We will now look for opportunities to cut down the cost.
Look for Volunteers
You might need to install a fence in your backyard or do some handy work. See if someone from your family and friends can volunteer.
Look in your circle and see if anyone can help you with anything.
Get Second-Hand/Affordable Furniture
Furniture is a huge expense. Most first-time daycare owners try to get the highest quality stuff that eats up their budget. You don’t need premium furniture; good quality will do fine. You can always upgrade later when you have the budget, but right now, we’re cutting the corners.
Get second-hand furniture from garage sales and online communities. Or buy affordable, good-quality products from Amazon.
And if you want more affordable furniture options, check out our daycare furniture guide.
DIY
Last but not least, we have your best friend DIY. Do whatever you can yourself so you don’t have to pay people for it. Don’t spend a ton on decoration. DIY arts and crafts, and you can decorate your classroom within a budget.
Step 3: 6 Money Sources to Start Your Daycare
Now, you must know your final expenses and their estimated amount. Let’s see 6 options to arrange this money.
1. Save
An obvious option is to save up that amount and then start your business. I recommend that you have at least a few thousand dollars in savings regardless of what method you’re opting for next. This amount will ensure your safety + you won’t have to arrange the entire amount.
2. Government Grants
Federal and state governments both offer grants to childcare providers to start their daycare. See what your state and federal government has to offer, and if you qualify, you can apply for the grants.
3. Partnerships and Funding
Get a business partner or investor. Or raise funds from organizations and NGOs in exchange for equity.
4. Loans
Another option is getting a loan through a bank or an organization. There are multiple financial organizations and NGOs that lend investments to small businesses. Some are specific to childcare businesses. Do a quick Google search to get a list of such institutions.
5. Crowdfunding
List your business idea on crowdfunding websites and let the general public contribute. Showcase your business’s positive impacts on society and the people around you. Narrate your mission and purpose in a way that moves people.
It might be difficult to raise large amounts through crowdfunding, but it’s definitely of help.
6. Community Support
Look around yourself. You might find someone in your circle who’s willing to sponsor you. It can be a person, organization or religious institution.
Want to Go Commercial but Don’t Have the Money?
If you want to start directly from a commercial center but the capital is stopping you, start small. Start with a home daycare and then expand to a commercial center.
As a beginner, you’ll make mistakes. It will take you time to understand the business and market in and out. Starting small will give you the experience and insights, plus your mistakes will have less impact on your business. And from there, you can confidently expand to your dream commercial center.
5 Free Marketing Methods for Daycare
1. Promote on Social Media
This is the easiest way to market your daycare. Create pages and accounts with your daycare name on different social media platforms.
Share about your services there. It will help you in the long run by building your credibility. You’ll build an audience who can be your potential clients. This will massively help you grow and scale your daycare business.
2. Spread the Word in Your Circle
If you’re starting a business, your friends and family should know about it. You never know who can benefit you. Maybe some of them become your first clients or help you get them.
You can also join childcare forums and online communities to interact with parents and promote your business.
3. List Your Business in Google
We all Google places near us, and daycare is no exception. A lot of your customers are searching for you. Luckily, you can list your daycare in Google without spending a dime. You don’t even need a website for this.
4. Host Open Houses
Open houses are one of the best ways to get clients for a new daycare. People can visit your location, which definitely gives you an edge over your competitors. Plus, you have a chance of converting them right there on the spot. A discount or offer will be a cherry on top.
These 9 open house ideas will not only help you arrange your first open house but will also reveal the secrets to getting customers with these events.
5. Collaborate With local businesses
Find relevant small businesses related to childcare and look at how you can collaborate with them. One way is that you both put up each other’s posters, or you can also have an affiliation.
Conclusion
This was all about starting a daycare business with no money of your own. There are two unavoidable expenses, though:
- Licensing and paperwork
- Furniture, toys and materials
However, we shared tips and tricks with you on minimizing the cost. Plus, we shared 6 ways to arrange the investment because there is no such thing as starting a daycare business without money.
We hope you found this article helpful. Let me know your thoughts in the comments.
Lastly, if you’re curious to know the operational and recurring costs of daycare and what taxes you’ll have to pay, this article is for you.
