Eugene Oregon

How To Start a Home-Based Daycare/Preschool

Is Daycare right for you?

If your wanting to be home with your kiddos, this is a great way to work from home providing you have an abundance of patience for OTHER people’s children, and you can manage the administrative side of running a small business. You must enjoy “being home a lot!” Their is a huge turnover for child care providers. I believe the burnout rate is five years, so give it careful consideration and planning before you jump in!

I have been running a home daycare for over 20 years while raising my children. I will share with you all the tips I’ve learned, how to make the most money at running a daycare business and the drawbacks and frustrations. I live in Oregon, so I will walk you through the licensing process, opportunities and rules for my state. Every state is a bit different, find your state’s laws online under Division of Child Care.

There are several options for running a home-based daycare, anything from being license exempt to running a certified home with up to 16 children on site at a time. Just like any business, you can put as much or as little effort into it as your willing to give.

Build Your Own Handbook

Before you start I would take the time to map out for parents and yourself what type of daycare you will be running. This will make the initial start up easier. First to consider:

  • Hours of operation and days of the week( some states require extra inspections if you are open 24-7. I suggest M-F 6 am -6 pm, give yourself time off!
  • What ages do you want to care for? If you want to take infants your adult to child ratio will be less and you will need infant furniture, crib, high chair…
  • What form of payments are you willing to accept and how often? monthly, weekly… and will you accept Paypal, or Square payments? We use Square for a few families. Payments are deposited in your account the following business day and fees are minimal.
  • Do you charge in advance? How much to charge? I recommend requiring prepay only. This eliminates trying to collect from a family. If a family is struggling to prepay, this is a sign the can’t afford daycare. Also, when researching the going rate in your area, please don’t undercut your competition. 
  • Discipline policy
  • Time off. I suggest giving yourself vacation, training and sick days in your flat monthly rate. We map out our vacation before the school year so parents know upfront. We also take the same 4 weeks off every year to make it consistent for families.


Once you have decided how you want to run your daycare write up a contract that supports those rules. Suggestions:

  • require payments paid in full by the first of every month
  • require a 2 week notice for termination
  • Map out your sick care policy
  • I have read and understand your handbook
  • I allow my child to be photographed while participating in a group activity

Have A Start Up Folder

In your start up packet I would include a copy of your handbook, a medical authorization and family contact information form, your contract, a food program application(if your participating in the USDA program), a copy of your resume, I always throw in a few business cards and a list of what to bring back if they want to enroll. One of the items on my list is a copy of their child’s immunization record.


We advertise mostly on Craigslist, 211, and Facebook. I have a few ads on Craigslist that I am frequently renewing with a link to our Facebook page. Posting occasional group activities here helps prospective parents get a feel for your program before they visit. I’ve had parents tell me they were sure they wanted to enroll even before visiting. This takes a lot of pressure off crushing an interview.

Brightwheel Or Similar Parent/Teacher App

You will be required to maintain logs for attendance. In our program we use the Brightwheel app for sign in and outs, for all communication, and documentation. It also serves as a scrapbook of the activities in your program. You create each child’s own feed that parents get on their phone. This is relatively inexpensive, it is under $40 a month and free to parents. This eliminates lots and lots of paperwork over the course of the year. I highly recommend an online data service.

We log when we are on recess, what we are learning during circle time, stories for the day, photos of activities, and nap times. You can use this app for payments also, but the payments don’t get deposited in your account for a couple days. I suggest a different site for payments like Square or PayPal. When using Brightwheel I caution you not get too detailed in what you post, as it ends up taking a great deal of time to maintain this level of posting.


I would suggest having a system in place for how you will store everyone’s gear during the day. We have a set of cubbies at our front door. They are big enough to hold a coat, shoes, diapers, wipes, and change of clothes. We also have a coat rack, but rarely use it, I try to keep coats in cubbies to reduce any headlice issues.

We literally have cubbies all through our home. I store craft supplies, manipulative toys, everything from puzzles to rhythm ribbons can be found in our cubbies. We also have a closet that is filled with toys that are rotated out.


In our daycare room we have cubbies for toys. Each cubby is labeled with a photo. We don’t keep all the cubbies out each day, instead we rotate a few of them. If we had the whole shelf full of our toys they would all be dumped out by 9 am and you wouldn’t be able to see the carpet. The more toys your program has, the more entertaining your program will be! I always seem to be investing in new toys, books and equipment for our program.

Outside Areas

We have a small home and even smaller outdoor space. Our state requires 6” of bark chips under play equipment used for climbing, and a 4’ fence enclosing the play area.


In Oregon we have a professional development program, Oregon Registry Online. This program recognizes your level of education in child care and documents all of your training for you.  ORO is based on 12 levels of professionalism. This is a great way to track your training and our state offers incentives for reaching a certain step. It is worth your time to look into your states registry. Cash incentives are a great way to reinvest in your business.


Oregon has implemented a quality rating program that is voluntary, but offers incentives for participating. This program is more advanced. If you are just considering starting a daycare I wouldn’t stress about this yet. But the reason I share it, is because it is a great way to advance your income, or training and to be recognized in your state as a star rated program. This program maps out the standards for 5 domains; learning and development, health and safety, personal qualifications, family partnerships, and administrative and business practices.

State Assistance

Whether you choose to accept state payments it’s up to you. In Oregon state payments are fairly simple to process and keep track of paperwork. If you are a star rated program, registered or certified, the state will pay you according to your level of licensing and quality. For example, a daycare that is a state certified home and a 5 star rated program will make more than double of someone that is not even registered with the state.

USDA Food Program

This is another optional program that can help offset the costs of meals. Being a government funded program I won’t kid you, there is a lot of paperwork involved. Sometimes I do ask myself if it’s worth the trouble.

Each month you will need to track attendance and meals served on their paperwork. What makes it frustrating and more complicated is their rules for approved meals and specific ways to document food served. You will receive some training in your home when you enroll. Your program will also have 4 unannounced visits per year to monitor a snack or meal and review your paperwork. So not only is their a lot of paperwork, but you have to stay on top of it each day or the undocumented days will not be reimbursed.

Reimbursements in Oregon fall under two tiers that are calculated by the poverty level of your local school. If your elementary school has over 50% poverty level families than you qualify for the higher rate. The breakdown is as follows for tier 1(the higher of the two):

  • breakfast $1.31
  • snack $.73
  • lunch/dinner $2.46

We usually get a reimbursement for around $1000 a month, so even though the paperwork is a huge hassle, it does help. Plus it’s a comfort to some parents to know you serve balanced meals and have extra monitoring a few times a year.

These are all areas that you can explore when it suits you. If you’ve read this far, wow, Thank you! You are definitely interested in pursuing a home daycare business. Good luck exploring and building your business. I’ve been doing daycare for 20+ years and I’ve learned so much along the way. Being home and available for my own children and family had been priceless. Have fun!

Thank you for reading and showing interest in our family blog.

#littlelambdaycare, #homedaycare, #smallbusiness, #daycare, #preschool, #pre-k,

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