The number of children you want to serve, where you want to work, the ages of children you want to serve, how much independence you want, and the hours you want to work all influence the type of child care business you choose.

Child care center

A child care center provides child care services, including early learning opportunities, for a fee in a nonresidential setting. Child care centers are usually licensed by the state, although some states exempt certain kinds of child care centers from licensing. Your state licensing regulations give you guidance about the number of children you can enroll in the type of child care program you offer, the location you select and the policies you need to observe. Child Care Aware® of America's State Licensing Information Map provides you with direct links to the office in your state that is responsible for child care licensing.

Family child care home

A family child care home provides child care services, including early learning opportunities, for unrelated children, for a fee, in a residential setting, usually in your own home. You are responsible for running your business. Although licensing regulations vary from state to state, most states require you to be licensed or regulated. If the state does not require your family child care home to be regulated or licensed, your county may still require you to register or to be certified. Child Care Aware® of America's State Licensing Information Map provides you with direct links to the office in your state that is responsible for child care licensing.

  • In a small family child care home, you are the only provider with a small number of children. Check with your state licensing agency to find out how many children you can care for before you need to be licensed.
  • If you operate a large family child care home, you and an assistant provide child care in a private residence for more children than are allowed in a small family child care home (usually 7-12 children). In most states, you will be required to be licensed.
  • Family child care networks help support family child care providers with training, recruitment and placement of families and business management. Contact your local Child Care Resource and Referral agency (CCR&R) to see if there is a local network that would be helpful to you.

If you choose to be a family child care provider, you will need the support of your entire family.

  • Decide the areas of your home that will be shared with the family child care children and families.
  • Create a place where your own children can be alone and away from the other children when needed.
  • Decide which toys will be shared with the family child care children and which toys will be reserved for your own children.

Specialty care

You can choose a special focus for your program that will help define your business.

  • Ages of children. You can choose to offer child care based on the age of the children who attend your program. You can choose to offer care only for infants and toddlers (through 2 years of age), for preschoolers (3 to 5 years of age), or for school-age children who may need care before and/or after school and on other days when schools are closed. You can also choose to offer care for mixed-age groups of children.
  • Hours of care. The hours for child care are usually between early morning and late afternoon or early evening. However, many communities need child care during "nontraditional" hours. You may choose to offer a program that helps parents who need child care in the evenings, on weekends, overnight or for changing shifts, such as hospital staff, police, firefighters or military men and women.
  • Back up care or care for mildly ill children. Some parents need child care when their regular child care provider is ill or on vacation. Other parents need child care when their child is only mildly ill but is not able to attend regular child care.
  • Inclusive child care. Many children with disabilities or special needs can be included in regular child care. Other children may need child care providers who have specialized training to handle chronic medical conditions or routine or emergency medical situations.

Legal structure

  • Sole proprietorship. You own an unincorporated business by yourself.
  • Incorporation. Your business is set up so shareholders exchange money, property or both for the corporation's capital stock. This structure protects your personal assets.
  • Partnership. You join with two or more persons to own your child care business. You divide your profits and losses among partners.
  • Tax-exempt. As a tax-exempt organization, any money after expenses is returned to the operation of the program. To claim this status, you must meet Internal Revenue Service (IRS) eligibility requirements.

You will need legal advice to decide how to legally set up your business. Additional information is available from the U.S. Small Business Administration.