Start a babysitting business by following these 10 steps:
- Plan your Babysitting Business
- Form your Babysitting Business into a Legal Entity
- Register your Babysitting Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Babysitting Business
- Get the Necessary Permits & Licenses for your Babysitting Business
- Get Babysitting Business Insurance
- Define your Babysitting Business Brand
- Create your Babysitting Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your babysitting business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a babysitting business?
Regardless of how you structure your new business, start-up costs are extremely low. Reliable transportation is paramount to the success of your company. This cost will most likely fluctuate, so keep some revenue in savings, whenever possible. A website will be your largest initial investment. It does not have to be fancy, but a website will help with your marketing campaign. Consider the online services you would like to offer your clients before discussing a site build with a developer.
The two main expenses a babysitter will have are transportation and marketing. Gas may cost an average of $15 per week, or perhaps you’ll use public transportation, which may cost $20 per week. Marketing, on the other hand, can be as simple as a website and social media promotion. A website will likely cost $500 or so for design, development, hosting, domain registration, etc.
What are the ongoing expenses for a babysitting business?
Like the startup costs, there is very little overhead involved in running a childcare business. Your website should be properly maintained and updated as a standard regimen. Since you are commuting regularly, fuel costs and vehicle maintenance should be budgeted on a monthly basis. If you employ other babysitters, consider paying them as a freelancer to cut down on your ongoing expenses. Aside from the costs associated with commuting, your largest business costs will be business insurance and a marketing strategy.
Who is the target market?
Families and working parents, ranging from affluent to middle class, will be your primary target audience. In general, your clients are looking to build a long-term relationship with a trusted and reliable caregiver.
How does a babysitting business make money?
This business draws in revenue from each babysitting job completed.
How much can you charge customers?
The national average hourly wage for babysitting is $13.97. Your fees should vary, depending upon a number of factors, such as: how many children, the age of the children, special needs or instructions, and the length of time your services are needed. Fees are typically determined by hourly rate, flat fee, or on a per child basis.
How much profit can a babysitting business make?
While you are the only babysitter on staff, your profits will be limited. If you charge $15 per hour and are able to babysit forty-five hours per week, your profit will be $2,700, minus expenses, per month. For each sitter you hire, your profits rise exponentially.
How can you make your business more profitable?
The following tips can help improve profitability for your new business:
- Focus on your online services. Many consumers turn to the internet for virtually everything, including researching their childcare options. This will also extend your reach, allowing you to service customers wherever you have a babysitter available.
- Consider opening a babysitting facility. While the overhead will be higher, this will afford you the opportunity to take on several clients at a time.
- Offer online and in-person courses. This could include standard safety, CPR, and first aid.
- Research indicates that parents are willing to pay more before and after school and for last-minute sitters. Make yourself available during those times.
- Early education degrees and sitters with pre-school education knowledge are often paid a higher wage. If you do not possess this knowledge, try to hire others who do.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Babysitting Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your babysitting business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a babysitting business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. In addition, certain local licensing or regulatory requirements may apply.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
If you’re operating a babysitting business out of your own home, you will need a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a babysitting business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your babysitting business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a babysitting business
Unlike most businesses, the babysitting industry relies heavily on reputation and referrals. When first starting out, make your services available to friends and family members. Offer your services to the local church. This will help you build your skills and reputation; those within the church community will know to turn to you, when they require their own babysitter.
There are a number of online babysitting resources. In the beginning stages, consider listing yourself with one of the online babysitting forums. Use your profile as a resume, building on it as you achieve new business goals.
Additionally, social media outlets, such as Facebook and Twitter, are an effective way of reaching a wide audience. Think about what your prospective clients are looking for and what kind of establishments they would frequent. Place business cards or ads at these locations.
Another effective marketing strategy is to target party and wedding planners. Many events are adult-only, leaving parents unsure of where to turn, particularly if they are visiting from out of town.
How to keep customers coming back
Reputation goes a long way for business success, especially one as personal as childcare. Ideally, you’ll develop a good rapport with the children and the parents and, when both are happy and satisfied with your work, you’re more likely to get the call backs and referrals. Remember, it’s always easier to retain happy clients than search out new ones.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Babysitting Business in your State
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- New Hampshire
- New Jersey
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- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
If you enjoy the company of children and are able to connect and communicate with both your children and their parents comfortably, owning a babysitting service could prove to be a profitable business venture.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a babysitting business?
Your daily activities will vary, depending upon the scope of the services you offer. If you are the sole babysitter, your days will be spent babysitting, marketing your business, and handling administrative duties. To maximize profits, be sure to include travel time when setting your schedule and fees.
Once you are able to start building a team of employees, your task list will increase. You will field calls and schedule reservations. To ensure a good fit between babysitter and child, time should be spent communicating with parents, getting to know their specific needs and routines. Background checks should be run on each new employee, as well.
What are some skills and experiences that will help you build a successful babysitting business?
Whenever dealing with someone’s children, it is imperative that you conduct yourself in a professional manner. Be organized and attentive to the client’s needs and wishes, as well as the children’s. Treat their house and belongings with respect and a mature attitude. This keeps you in good graces with the parents and spreads a positive reputation to other potential clients. And, if you find that your experience level is lacking or might be holding you back, consider options for increasing your expertise. Consider volunteering for Sunday school or church daycare, help out at friends’ children’s birthdays, or volunteer through public libraries. There are even numerous online programs to help you become more familiar with child pedagogy.
It would also be advisable to stay regularly trained in CPR and first aid procedures. Emergencies can happen and it is best to be prepared for all circumstances. The National Child Care Association offers educational events, conferences, and even resources for insurance and other business-related items.
What is the growth potential for a babysitting business?
According to recent statistics, babysitting is a $5 billion a year industry. Many parents find it difficult to locate a trustworthy and honest sitter for their children. Therefore, those who prove themselves to possess the skills and integrity necessary have an opportunity to expand their business on a national and/or international level.
Not sure if a babysitting business is right for you? Try our free Business Idea Generator and find your perfect idea.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a babysitting business?
Those looking to become leaders in the Industry should consider the following advice:
- To ensure consistency and quality service, design a checklist. This should include information regarding emergency contacts, allergies, medical conditions, behavioral issues, and the child’s schedule.
- Bring activities with you, whenever possible. Whatever you bring is sure to be more exciting to the children than what is at their own home.
- Do not babysit if you are sick.
- Never post photos of the children on social media.
How and when to build a team
As the business begins to grow, you will need to add additional employees to your team. Thorough background checks should be conducted on each babysitter. CPR and first aid certification is a standard requirement. If possible, consider building a team that spans every age group and try to employ individuals with special skills or training.