How to Start a Babysitting Business

Start a babysitting business by following these 10 steps:

1. Plan your Babysitting Business
2. Form your Babysitting Business into a Legal Entity
3. Register your Babysitting Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Babysitting Business
6. Get the Necessary Permits & Licenses for your Babysitting Business
7. Get Babysitting Business Insurance
8. Define your Babysitting Business Brand
9. Create your Babysitting Business Website
10. Set up your Business Phone System

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 will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

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

If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

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.

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.

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your babysitting business is sued.

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

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!

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.

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.

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.

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.

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.

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.

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.

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.