Do you want to start a special needs daycare? If YES, here is a 20-step guide on how to start a special needs daycare business with no money or experience.
If you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you.
The bottom line is that you would need to pay a visit to the regulatory bodies in your country to get the information you need before you can legally open your special needs daycare in your city.
You can start your special needs daycare business from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes a nationally recognized brand.
Steps to Starting a Special Needs Daycare Business
1. Understand The Industry
A special needs daycare facility is a conducive facility designed basically for special needs children or even adults; people who need care and assistance.
The facility is usually in secure and less noisy areas. It is well furnished with beddings, furniture, fittings and other things that can add to the comfort and ambience of the facility.
Babysitting special needs children and adults alike can be an overwhelming undertaking. It can be physically tasking and the equivalent of a full-time job.
Operators in the Day Care industry that special needs daycare is part of are private and rely primarily on tuition paid by parents, but companies may also receive funding from the government, which attempts to alleviate the cost on households.
Even though the industry grew rapidly in the 1990s due to rising awareness of the benefits of early learning to cognitive development in children, growth slowed due to the economic downturn as costs exceeded what many families could bear.
During the first half of the five years to 2017, though high costs generated high profit margins for operators, tight state budgets combined with slow disposable income growth limited demand for industry services. Within the five years to 2022, revenue growth will improve but still be limited due to high day care costs.
Interesting Statistics About the Industry
Statistics has it that in the United States of America alone, there are about 771,044 licensed and registered day care facilities (special needs day care facilities inclusive) responsible for employing about 1.6 employees and the industry rakes in a whooping sum of $48 billion annually with an annual growth rate projected at 1.3 percent.
It is important to state that no establishment can boast of having the lion share of the available market share in this industry.
The entry barriers in this industry is relatively different and it is based on the niche area that you intend operating. Non-employers such as babysitters experience fewer barriers to entry, given that there are no significant costs or government regulations that would deter a would-be caretaker.
For larger companies, there are medium barriers to entry. Although there is not a significant capital investment involved in building a new establishment, hiring quality caregivers will be a major expense. Additionally, the industry is heavily regulated, and as a result, a new enterprise must obtain permits and comply with other rules to operate.
The largest barriers for new entrants is the level of regulation in this industry. The special needs daycare business in developed countries are still enjoying good patronage particularly if they are well positioned and if they know how to reach out to their target market.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize special needs daycares is not restricted to children with special needs but also adults with special needs. So, if you are looking towards defining the demographics for your special needs daycare facility business, then you should make it far reaching.
3. Decide Which Niche to Concentrate On
It is important to state that there are no niche ideas when it comes to special needs daycare because special needs daycare is a niche idea in the Day Care industry but players in this line of business may decide to specialize in accommodating only children with special needs or adults with special needs. Some may decide to go beyond providing special needs care to;
- Providing preschool programs for people with special needs
- Nursing and other supervision
- Assistance in daily living for people with special needs
- Home medication management for people with special needs
- Personal assistance services to people with special needs.
The Level of Competition in The Industry
Irrespective of the line of business you decide to invest in, you are still going to compete with others who are into same area of business and special needs daycare facility business is not an exemption. The level of competition in the Day Care industry to some extent depends largely on the location of the business, your niche area of operation and of course the capacity of your special needs daycare facility.
If you can successfully create a unique niche for your special needs daycare, you are likely going to experience little or no competition. For instance, if you are the only special needs daycare facility that is providing preschool programs for people with special needs, you can successfully monopolize the market for a long time before you start having competition.
It is important to also state that the competitions in the Day Care industry is not restricted to competitions amongst special needs daycares but also you will be competing against all players in the industry that have the capacity to take care of people with special needs.
4. Know Your Major Competitors in the Industry
Here are some of the most popular Special Needs Daycares in the United States of America;
- BrightStar Care
- NJ Parent Link
- Sacramento Autistic Spectrum and Special Needs Alliance
- Milestones Child Development Centers, Inc.
- Creative Hands Childcare.
When it comes to starting a special needs daycare business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and start competing at the national level.
When conducting costing and economic analysis, you just have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors while running your special needs daycare facility.
As a special needs daycare business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that supplies, medications, security and facility maintenance cost is one of the most important factors contributing to the overall cost of running a special needs daycare facility and should be considered a major factor when carrying out your costing and economic analysis.
5. Decide Whether to Buy a Franchise or Start from Scratch
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
Although there are some special needs daycares that are into franchising, but if you are looking towards starting an special needs daycare facility business, it will pay you to start from the very scratch because you can hardly get a franchise of special needs daycare business to buy.
Besides starting a special needs daycare business from the scratch is might be stressful initially but it is profitable. With special needs daycare facility business, you should just try as much as possible to secure a good location for your facility and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your special needs facility.
Please note that most of the successful special needs daycares around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own special needs daycare business to become a successful brand.
6. Know the Possible Threats and Challenges You Will Face
A common challenge is that many special needs daycares are subject to extreme revenue volatility. Besides, if you decide to open your own special needs daycare today, one of the major challenges you are likely going to face is the presence of well – established special needs daycares, and of course other players in the industry who are also taking care of people with special needs.
The only way to avoid this challenge is to create your own market. Some other threats and challenges that you are likely going to face are mature markets, bad economy (economy downturn), and stiff competition. So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy are likely going to affect consumer spending for services such as special needs daycare.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, or limited liability company for your special needs daycare.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and sell franchise, then you should choose Limited Liability Company, LLC or even general partnership. That is the most suitable legal entity that will cut it for you.
8. Choose a Catchy Business Name
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. It is the norm for people to follow the trend in the industry they intend operating from when naming their business.
9. Discuss With an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here is some of the basic insurance policies that you should consider purchasing if you want to start your own special needs daycare in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Building/Property insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own special needs daycare business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you want to protect your company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Irrespective of the results you produce as it relates to babysitting people with special needs, professional certification is one of the main reasons why some special needs day care stand out. If you want to make an impact in the day care industry, you should work towards acquiring all the needed certifications in your area of specialization.
Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in this competitive market. These are some of the certifications you can work towards achieving if you want to run your own special needs day care;
- Special Needs and Inclusive Education Certificate (ChildCare Education Institute® (CCEI) Special Needs and Inclusive Education Certificate offers a basic overview of special needs issues that covers early childhood)
- Degree or Diploma in related courses such as Nursing, Public Health, Special Needs Education, and Home Health Care Givers
Please note that you cannot successfully run a special needs day care in the United States and in most countries of the world without necessarily acquiring professional certifications and business license (accreditation from regulating bodies) even if you have adequate experience cum background in babysitting people with special needs.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hands of the law catch up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a standard, secured and well-equipped special needs daycare facility is capital intensive even if you choose to launch the business on a small scale and have a handful of employees on your payroll.
Leasing of a standard facility that can accommodate your students and staff members and of course equipping the facility are part of what will consume a large chunk of your startup capital, in essence, if you choose to start the business on a small scale, you will need to source for fund to finance the business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for startup capital for your special needs daycare business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Pitching your business idea and applying for business grants and seed funding from, government, donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
Starting a special needs daycare facility comes with its own challenges; it is a business that cannot be started in any location. As a matter of fact, you will need approval from the local council and other regulating authorities in the city you intend opening your special needs daycare business.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget.
If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your special needs daycare business.
Most importantly, before choosing a location for your special needs daycare business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your special needs daycare business;
- The demography of the location especially as it relates to children and adults with special needs
- The demand for the services of special needs daycare in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of special needs daycare facilities and other day care related services that in the location
- The local laws and regulations in the community / state
- Traffic, parking and security et al
15. Hire Employees for your Technical and Manpower Needs
When starting a special needs daycare, you will not need any technical gadgets except office and nursing equipment. In setting up a small office, you will need computer, printer, software apps, telephones, pager, photocopier, scanner, and fax machine.
These equipment, tools and instruments can be purchased as fairly used especially if you have limited finance to meet your budget.
When it comes to choosing between renting and leasing a facility for your special needs daycare, the size of the facility you want to own, and your entire budget for the business should influence your choice. Besides, you will need a facility that is in serene environment, a facility that is big enough to accommodate the number of visitors and staff members working for you.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision.
Averagely, when it comes to starting a standard special needs daycare business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Human Resources and Admin Manager/Facility Manager, Nursing Aids, Home Health Caregivers/Home Caregivers, Front Desk Officer, Security Guards and Cleaners.
Over and above, you would need a minimum of 5 to 10 key staff members to effectively run a medium scale but standard special needs daycare facility
The Service Delivery Process of the Business
The service delivery as it relates to special needs daycare facility to a large extent depends on the organization and what they stand to achieve. The facility is usually in a secure and less noisy area. It is well furnished with beddings, furniture, fittings and other things that can add to the comfort and ambience of the facility.
Once the facility is in place, you are open to welcome children and adults with special needs. It is important to state that a special needs daycare facility business may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business process is not cast on stone.
16. Write a Marketing Plan Packed With ideas & Strategies
The fact that the entry barrier for starting a small – scale special needs daycare facility is not too high means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with unique and trusted business approach if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience, it is important to state what you have been able to achieve in time past. This will help boost your chances in the market place when marketing your business. Here are some of the platforms you can utilize to market your special needs daycare;
- Introduce your special needs daycare facility by sending introductory letters alongside your brochure to households and key stakeholders in and around your location
- Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
- Making your first impression count positively to those making enquiries of your special needs daycare facility for the first time
- Make use of attractive handbills to create awareness and also to give direction to your special needs daycare facility
- Engage in roadshow in targeted communities from time to time to market your special needs daycare facility
- Advertise your services in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Leverage on the internet to promote your special needs daycare facility
- Engage in direct marketing and sales
- Encourage the use of word of mouth marketing (referrals)
- Leverage on the internet to promote your special needs daycare facility (when you blog regularly on key issues as it relates to your business, people will consider you an expert in the field)
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your special needs daycare facility; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.
18. Develop an Iron-clad Competitive Strategies to Help You Win
The special needs daycare line of business is not a competitive industry, but you must come up with a unique and highly creative strategy to be able to outsmart your competitors. Part of what you need to do in order to stay competitive in the industry is to ensure that your facility is conducive, safe, clean and monitored.
In other to stay competitive in this industry, you must ensure that your clients are always comfortable (homely), secured and always ensure that you pay attention to details when carrying out your job. The truth is that if there are fluctuations in the services you provide, customers can choose to shift allegiance and settle for other options available.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your facility and service delivery, they can hardly source for alternative service providers. One of the strategies that you would need to employ in order to generate repeated sales from your customers and also to retain them is to ensure that your facility is on point and your customer services does not fluctuate.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized emails and above all, you can easily receive complaints and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your special needs daycare facility;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community – based events
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your special needs daycare
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your special needs daycare
- Distribute your fliers and handbills in target areas
- List your special needs daycare business in local directories / yellow pages
- Advertise your special needs daycare in your official website and employ strategies that will help you pull traffic to the site
- Position our Flexi Banners at strategic positions in the location where your special needs daycare facility is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles are branded with your company logo.