How to Start a Babysitting Business

If you’re looking for a business that doesn’t cost much to start but can be very rewarding, a babysitting business may be just the opportunity for you. You’d be playing a part in the development of children, plus – kids are fun! 

And whether you babysit in people’s homes or have a childcare centre in your own home, the costs to get started are very low. You’ll have to invest in some marketing to get started, but you can build up your clientele and make a good, reliable income.

Babysitting Business

In this guide to the business of babysitting, we will discuss how to get your business going so you can be on your way to babysitting success.

How Much Does It Cost to Get Started?

If you’re going to babysit in people’s homes, you don’t need much more than a reliable form of transportation. You might want to spend some money to create a website and market it, and you should check with your insurance agent about coverage you’ll need to limit your liability. 

You should also get first aid training so that you’re prepared in case of emergencies. Such training will also add to your credibility with customers. Altogether your costs to get started should be less than $500.

If you’re starting a childcare centre in your home, your costs will be slightly higher. You’ll need to invest in toys and equipment, such as cribs and playpens, which can add up quickly. You also may be required to be licensed by your state, which comes with a cost. Still, your total costs should be less than $1,500.

How Much Can You Earn?

If you babysit for people in their homes, you can probably charge about $15 per hour. Obviously, you’ll only be able to work for one client at a time, so your hours will probably be limited to evenings and weekends. That limits your earning potential. 

Alternatively, you could work for one client as a nanny for 40 hours a week. Rates for nannies are higher, averaging about $20 an hour. That would give you an annual income of around $40,000 per year.

If you start a childcare business in your home, you can care for multiple children at once. Your state most likely has laws limiting the number of children one person can care for, probably less than 10. You’ll charge your customers a weekly rate per child, ranging from $200 to $300.

If you care for seven children at $250 per week, that’s a nice weekly income of $1,750. You’ll have ongoing expenses like lunches and snacks for the children, but you’ll still come out with a nice profit.

If you have the skills, you could offer early education for the children you care for, increasing the rates you charge. 

Choose Your Business Structure

You have a few business structure options for your babysitting operation. You could simply work as a sole proprietor, which is what you’ll be operating as by default if you don’t formally register a business entity type with your state.

Many new business owners, however, choose to form a limited liability company (LLC). An LLC offers personal liability protection so that if your business cannot pay its debts or is sued, your assets are not at risk. With a sole proprietorship, you do not have liability protection.

An LLC is also a “pass-through” entity, meaning that the profits of the LLC are passed through to the owner to be reported on their tax return. The LLC itself is not taxed.

You also have the option of forming a corporation, which also provides personal liability protection. A corporation, however, comes with more formal requirements and costs. A corporation is also subject to corporate taxes. Dividends you receive from the company are also taxed, sometimes called double taxation. 

Most new business owners choose an LLC because of its simplicity and its many benefits.

Licenses and Permits

States and local jurisdictions have laws regarding business licenses and permit you may need. Most states require a license for a home childcare centre that cares for a certain number of children or more. You’ll need to check with your state government to determine their requirements.

Your city or municipality may also require that you have certain licenses and permits, so check with your local government for requirements.

You also should obtain first aid and CPR certification.

Business Insurance

Babysitting Business

As previously mentioned, it’s a good idea to check with your insurance agent to see what policies may apply to your business.  At the very least, you’ll probably want general liability insurance, which protects you from liability for injuries during your business.

Open a Business Bank Account

It’s a good idea to separate your business and personal finances, particularly if you form an LLC. Mingling business and personal funds can threaten your personal liability protection because the line between you and the LLC becomes blurred.

To open a business bank account, you may be required to have an Employer Identification Number (EIN), which is like a social security number for your business. It allows the IRS to identify your business and is used for tax reporting purposes.

You’ll also be required to have an EIN if you hire employees. An EIN is simple to obtain and free. You just need to apply on the IRS website. If you don’t like having a traditional bank account then digital business banking alternatives are a great way to make financial transactions easier and more secure. For example,  such banking alternatives typically have higher interest rates than traditional accounts, meaning businesses can earn more on their money. Additionally, they don’t have any physical locations or staff members, so overhead costs are significantly reduced when compared to traditional banks.

Marketing Your Business

Building a web presence is a great way to market your business. You can create a page for your business on Facebook and try to build a following. You can also do paid ads on both Facebook and Instagram. 

You can also use search engine optimization (SEO) techniques to have your website appear closer to the top on Google.

You also should get your business listed on Google My Business and Yelp, and once you have clients, ask them to leave you reviews. 

You can also do some old-fashioned marketing for a babysitting business and distribute flyers to homes in nearby neighbourhoods. 

If you need help with building a website for your babysitting business, scheduling clients and taking payments, all-in-one platforms like Solo make things easy.

In Closing

A babysitting business of any kind can be very rewarding, and getting a good number of customers can also be quite lucrative. Who knows – maybe you’ll turn it into a daycare centre that you can franchise into multiple locations around the country. 

You’ve got all the information you need now, so go ahead and launch your babysitting adventure!

How to Start a Babysitting Business 1

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