The Insider’s Guide to Starting a Successful Daycare in Ontario This Year

Welcome to an insightful guide on embarking upon a fulfilling journey as a daycare provider in the province of Ontario. As the demand for high-quality childcare continues to rise, the role of daycare centers in supporting working families and nurturing young minds has never been more crucial. If you’re considering starting a daycare, you’re on the cusp of making a significant impact on your community while creating a rewarding business opportunity for yourself.

In this comprehensive article, we will navigate the intricate landscape of establishing and operating a daycare in Ontario. From understanding the regulatory framework to designing an engaging and safe environment for children, we’ll cover key aspects that will set you on the right path. The road ahead might seem complex, but with the right information and thoughtful planning, you can turn your aspiration of running a daycare into a successful and fulfilling venture.

Key Takeaways

• Research the market demand and competition before starting your daycare.
• Choose the type of daycare service that best suits your business goals.
• Create a unique selling proposition to set your daycare apart from the rest.

1. Understanding the Daycare Industry in Ontario

Before you can start a daycare center, it’s important to understand the industry and the regulations that govern it. In Ontario, a license is required for any child care program that provides care to more than five children younger than 13 years old. Programs that do not need a child care license include nannies or babysitters that provide care to children from one family in the children’s home and relatives that provide care for children.

Under the Child Care and Early Years Act (CCEYA), licensed child care can occur in various environments, including licensed child care centers, which are inspected by ministry staff. The CCEYA came into effect on August 31, 2015, and replaced the Day Nurseries Act, establishing new rules governing child care in Ontario.

It’s important to understand the different types of child care programs and the requirements for each. The Ontario government provides a helpful guide to understanding the different types of child care programs and the requirements for each.

It’s also important to consider the cost of operation, including rent, utilities, insurance, and staffing. The Ontario government provides funding for licensed child care providers to help offset some of the operating costs. The funding is based on the age of the child and the type of program provided.

2. Legal Requirements and Regulations

All daycare establishments in Ontario are required to meet certain legal requirements and regulations. You must follow the guidelines set out by the Child Care and Early Years Act, 2014 and its regulations. The act is designed to ensure the health and safety of children and child care providers in child care settings. Here are some key legal requirements and regulations you need to know:

Licensing

To operate a daycare in Ontario, you must have a license. The license is issued by the Ministry of Education. There are two types of licenses: home-based child care and licensed child care centers. Home-based child care is provided in a private residence, while licensed child care centers are operated in a commercial space. It’s worth noting that you can run a daycare without license but it has it’s own set or rules and regulations.

Staffing Requirements

The CCEYA sets out specific staffing requirements for daycare providers. The ratio of staff to children varies depending on the age of the children. For example, for children under 12 months old, there must be one staff member for every three children. For children aged 18 months to 2.5 years, there must be one staff member for every five children.

Health and Safety Requirements

To ensure the health and safety of children, daycare providers must follow certain health and safety requirements. These include:

• Conducting regular fire drills
• Ensuring that all toys and equipment are safe and in good condition
• Providing healthy meals and snacks
• Keeping accurate records of each child’s medical history and emergency contact information

Criminal Record Checks

All daycare providers and staff members must undergo a criminal record check before they can work with children. This includes a vulnerable sector check, which looks for any criminal convictions related to working with children.

Insurance

Daycare providers are required to have liability insurance. This insurance protects the provider in case of any accidents or injuries that occur on the premises.

3. Business Plan Development

Developing a business plan is an essential step in starting any business. It will help you set goals, define your target market, and identify potential challenges and solutions. Here are some key components to include in your daycare business plan:

Executive Summary

The executive summary is a brief overview of your daycare business plan. It should include your business name, location, services offered, target market, and financial projections. Keep it concise and engaging to grab the attention of potential investors or lenders.

Market Analysis

Conducting market research will help you understand your target market and competition. Identify the age range of children you will serve, the services you will offer, and the unique selling points that differentiate your daycare from others. Use this information to develop a marketing strategy that will attract and retain clients. You can leverage Ontario’s Early Years and Child Care Annual Reports to conduct market research.

Services and Facilities

Describe the services you will offer and the facilities you will provide. Include details such as the number of children you can accommodate, the hours of operation, and the qualifications of your staff. If you plan to offer additional services, such as meals or transportation, include them in this section.

Financial Plan

Develop a financial plan that includes your startup costs, operating expenses, and revenue projections. Consider the cost of rent, utilities, equipment, supplies, insurance, and salaries. Use this information to determine your pricing strategy and estimate your breakeven point.

Marketing Strategy

Your marketing strategy should outline how you plan to reach your target market and promote your daycare. Consider using social media, flyers, and word-of-mouth referrals to attract clients. You may also want to develop partnerships with local businesses or organizations to increase your visibility.

4. Finding Funding for Your Daycare

Funding is quite important for starting a daycare in Ontario due to strict regulatory requirements, facility needs, and the specialized nature of childcare services:

• Licensing and regulatory compliance – Licensed childcare centers must meet Ministry of Education standards under the Child Care and Early Years Act. This includes facility inspections, staff qualifications, and ongoing compliance requirements that can be costly.
• Facility requirements – Daycares need specialized spaces with age-appropriate layouts, secure outdoor play areas, multiple washrooms sized for children, commercial kitchen facilities, and accessibility features. Converting existing buildings or purpose-building requires significant investment.
• Staff qualifications and costs – Early Childhood Educators (ECEs) must be registered with the College of Early Childhood Educators. Qualified staff command competitive salaries, and maintaining proper staff-to-child ratios is mandatory and expensive.
• Safety and security systems – Specialized locks, security cameras, playground equipment, emergency procedures, and child-proofing throughout the facility. Safety equipment and monitoring systems are essential but costly.
• Insurance and liability – Professional liability insurance for childcare providers, comprehensive property insurance, and potentially additional coverage for outdoor activities and field trips.
• Educational materials and equipment – Age-appropriate toys, learning materials, furniture sized for children, outdoor playground equipment, and supplies for arts, crafts, and educational activities.
• Working capital and seasonal considerations – Many parents pay monthly, but you have ongoing staffing and facility costs. Summer months may see reduced enrollment, requiring cash flow management.
• Food service requirements – If providing meals and snacks, commercial kitchen equipment and food safety compliance add significant costs.

Here’s how you can secure funding for your Daycare Business in Ontario:

• Traditional business financing: Business loans from banks or credit unions, though many lenders view childcare as stable due to consistent demand. Equipment financing for playground equipment, furniture, and educational materials. Commercial mortgages if purchasing property specifically for daycare use. Lines of credit for working capital and seasonal cash flow management.
• Childcare-specific lenders: Some financial institutions specialize in childcare facility financing and understand the unique cash flow patterns and regulatory requirements. They may offer more favorable terms and faster approval processes.
• Community and non-profit funding: United Way and other community organizations sometimes provide grants for childcare services, especially in underserved areas. Religious organizations or community groups may offer space or funding partnerships. Local economic development agencies often support childcare as essential community infrastructure.
• Alternative and creative approaches: Equipment suppliers often offer financing programs for playground equipment and educational materials. Lease agreements for facility space with landlords interested in stable, long-term tenants. Parent cooperative models where families invest in exchange for guaranteed spots and potentially reduced fees.
• Personal and family funding: Home equity loans if you own property. Family investment partnerships, especially from family members who understand the community need for quality childcare. Personal loans or lines of credit for smaller startup amounts.
• Government programs and grants: Many government grants, loan guarantees, and loans are available in Ontario:
  • BDC Small Business Loan: A BDC Small Business Loan is designed to help Canadian entrepreneurs like you fund a wide range of business needs, from purchasing equipment to covering payroll or launching marketing campaigns. You can apply easily online for amounts up to $100,000, with approval subject to review.
  • BDC Startup Financing: If you’re looking to launch or grow a business in Canada, BDC’s Startup Financing can help get you started with flexible loans up to $150,000. BDC is specifically focused on supporting entrepreneurs and offers advice alongside funding.
  • Community Futures program: The program delivers a mix of funding, mentorship, and business advisory and could be a key source of support for your small business. This federally funded initiative focuses on building resilient local economies across Canada.
  • Canada Small Business Financing Program: CSBFP is a federal initiative that aims to make it easier for you to get loans from major banks or credit unions by having the government share part of the risk with your lender.
  • Thunder Bay Ventures Northwestern Ontario Investment Pool Loans: NWOIP offers loans extending up to $600,000. Thanks to their funding partner FedNor/Industry Canada, these expanded loans support local businesses in starting up or expanding.
  • Superior North CDFC: Superior North CFDC administers a local investment fund to help finance new or existing small businesses and social enterprises in the Northwest Region of Ontario.
  • RRFDC Equity Investments: Rainy River Future Development Corporation provides equity investments to entrepreneurs in the Northwest Region of Ontario, wishing to expand their businesses or begin a new business.
  • Patricia Area Community Endeavours Business Loans: PACE provides access to capital for small businesses in Patricia Region through loans.
  • Nishnawbe Aski Development Fund (NADF): NADF delivers Women Entrepreneurship Fund to support Indigenous women entrepreneurs seeking financing to start or grow a business.
  • Chukuni Community Development Corporation Business Loans: The Corporation offers financing through equity participation, loans, and loan guarantees to business ventures in its catchment area.
  • Community Futures of North & Central Hastings & South Algonquin Business Loans: Community Futures of North & Central Hastings & South Algonquin Business Loans
  • Trenval Business Development Corporation Social Enterprise Loan: Trenval Business DC offers a Social Enterprise Loan to qualified businesses producing goods and services for the market economy, but who manage their operations and redirect their surpluses in pursuit of social, environmental and community goals.
  • Orillia Area Community Development Corporation CCBF Grant: The Community Capacity Building Fund is intended to strengthen its communities by supporting projects of both for-profit businesses and non-profit organizations/social enterprises.

5. Location Selection and Setup

Starting a daycare requires careful planning and consideration of various factors, including location selection and setup. In this section, we will discuss how to choose the right location and set up your daycare.

Choosing the Right Location

Choosing the right location for your daycare is critical to its success. Here are some factors to consider when selecting a location:

• Accessibility: Choose a location that is easily accessible by parents and caregivers. Consider proximity to public transportation, parking availability, and the surrounding infrastructure.
• Safety: Ensure that the location is safe and secure for children. Check for potential hazards such as sharp edges, steep stairs, or toxic substances.
• Zoning: Check with the Zoning Department in your municipality to make sure that the area is zoned for daycare. You may need to obtain a permit or license to operate a daycare in a residential area.
• Space: Consider the amount of space required for your daycare. Ensure that the location has enough indoor and outdoor space to accommodate the number of children you plan to care for.
• Cost: Determine the cost of leasing or renting the location. Consider the overhead costs such as utilities, insurance, and maintenance.

Read more: Planning and Design Guidelines for Licensed Child Care Centres

6. Staffing Your Daycare

When it comes to running a successful daycare, staffing is crucial. You want to hire qualified staff who are passionate about working with children and have the skills and experience necessary to provide a safe and nurturing environment. In this section, we’ll discuss how to hire and train your staff to ensure the best possible care for the children in your daycare.

Hiring Qualified Staff

When hiring staff for your daycare, you need to make sure they have the necessary qualifications and experience. In Ontario, all daycare can obtain Early Childhood Education diploma or degree from an approved institution.

In addition to the ECE requirement, you should also look for candidates who have experience working with children in a daycare or similar setting. When interviewing potential staff members, ask about their experience, their approach to childcare, and their ability to work as part of a team.

It’s also important to conduct background checks on all potential staff members, including criminal record checks and vulnerable sector checks. This will help ensure that you’re hiring trustworthy and reliable individuals who are committed to providing quality care to the children in your daycare.

Staff Training and Development

Once you’ve hired your staff, it’s important to provide ongoing training and development opportunities to help them grow and improve in their roles. This can include regular staff meetings, professional development workshops, and on-the-job training.

One important area of training is health and safety. All staff members should be trained in first aid and CPR, as well as proper hygiene and sanitation practices. They should also be familiar with your daycare’s emergency procedures and protocols.

In addition to health and safety training, you should also provide ongoing training in child development, behavior management, and communication skills. This will help your staff provide the best possible care and support to the children in your daycare.

7. Marketing Your Daycare

Once you have set up your daycare, it’s time to start thinking about marketing it. You want to make sure that parents in your community know about your daycare and choose it over other options. Here are some tips on how to market your daycare effectively.

Creating a Marketing Plan

The first step in marketing your daycare is to create a marketing plan. This plan should outline your goals, target audience, and strategies for reaching them. Your goals might include increasing enrollment, building brand awareness, or improving your online presence.

Your target audience is likely parents with young children in your community. Think about where they spend their time and how they make decisions about childcare. You might want to consider partnering with local businesses or community organizations to reach this audience.

Your marketing strategies might include advertising, direct mail, community events, or social media. You should also consider offering promotions or discounts to new families to encourage them to try your daycare.

Online Presence

In today’s digital age, having a strong online presence is essential for any business. This is especially true for daycares, as parents often turn to the internet to research childcare options.

Make sure that your daycare has a professional-looking website that is easy to navigate. Your website should include information about your programs, staff, and facilities. You might also want to include testimonials from satisfied parents to help build trust.

Social Media

Social media can be a powerful tool for marketing your daycare. Here are some tips for using social media effectively:

• Post regularly: Try to post updates and photos at least once a day to keep your followers engaged.
• Use hashtags: Hashtags can help your posts reach a wider audience. Use relevant hashtags like #daycare or #childcare.
• Interact with parents: Respond to comments and messages promptly, and use social media to answer any questions parents might have.
• Share testimonials: Share positive feedback from parents to help build trust with potential customers.

By following these tips, you can create a strong marketing plan for your daycare and reach more parents in your community. Remember to always be honest and transparent in your marketing efforts, and to prioritize the safety and well-being of the children in your care.

8. Financial Management

Starting a daycare in Ontario requires careful financial management to ensure your business is sustainable and profitable. In this section, we will cover two important aspects of financial management: budgeting and pricing, and financial record keeping.

Budgeting and Pricing

Before you open your daycare, you need to create a budget that takes into account all the expenses you will incur. This includes the cost of rent, utilities, equipment, supplies, insurance, and staff salaries. You should also factor in any unexpected expenses, such as repairs or emergencies.

Once you have a budget in place, you can determine your pricing strategy. You need to set a price that is competitive with other daycares in your area, but also allows you to make a profit. Consider offering different pricing options, such as full-time, part-time, or drop-in care, to attract a wider range of customers.

Financial Record Keeping

Good financial record keeping is essential for any business. You need to keep track of all your income and expenses, and maintain accurate records for tax purposes. This will also help you monitor your cash flow and identify any areas where you can cut costs or increase revenue.

Consider using accounting software to make financial record keeping easier and more efficient. There are several options available, such as QuickBooks and FreshBooks, that can help you track your expenses, generate invoices, and prepare financial statements.

Frequently Asked Questions

Resources for Daycare Businesses in Ontario

Government Resources

Industry Resources

Other Resources