How to open a daycare in Illinois

Starting a daycare in Illinois is a rewarding way to make a meaningful impact on children's lives while building a sustainable business. Whether you envision a cozy home-based daycare or a large childcare center, this guide walks you through every step, from understanding licensing requirements to securing funding and marketing your new business.

Illinois daycare licensing requirements

The Illinois Department of Children and Family Services (DCFS) regulates all licensed child care facilities in the state. Before you can care for children, you must obtain the appropriate license based on the size and type of your operation. Licensing ensures all facilities meet strict health, safety, and educational standards.

Types of child care licenses

Illinois offers several different types of daycare licenses:

• Day Care Home: A licensed day care home allows you to care for up to 8 children (including your own children under age 12) in your private residence. This is ideal for providers who want to work from home and start small. With an assistant, you can care for up to 12 children.

• Group Day Care Home: A group day care home allows you to care for 9 to 16 children in a residential setting with at least one full-time assistant. This option requires more extensive qualifications and has stricter safety requirements.

• Day Care Center: A day care center is a non-residential facility that serves 3 or more children. Centers must meet commercial building codes and more stringent staffing, safety, and operational requirements.

• License-exempt care: Certain programs may operate without a license, such as those run by schools, religious organizations, or providers caring for 3 or fewer unrelated children. However, license-exempt providers receiving Child Care Assistance Program (CCAP) funding must still meet health and safety standards.

Staff-to-child ratios

Illinois enforces strict staff-to-child ratios to ensure quality care and child safety. These ratios vary by age group and must be maintained at all times:

*The maximum group size is based on the age of the youngest child in the group.

For home-based care, the capacity is determined during the licensing inspection based on available space and the ages of children served. Family day care homes can serve up to 8 children total (including the provider's own children under 12), with no more than 5 children under age 2.

Step 1: Attend orientation & complete training

Before you can apply for a license, you must attend a licensing orientation. The orientation is free and covers licensing standards, recordkeeping requirements, health and safety regulations, and the application process. You can also access the online day care home licensing orientation through the DCFS training portal.

No matter which type of daycare you plan to open, all applicants must meet the following basic requirements:

• Be at least 21 years old (for home-based care) or 18 years old (for center staff).

• Have a high school diploma or GED.

• Complete 15 hours of pre-service training on topics including child development, health and safety, and business practices.

• Obtain current CPR and First Aid certifications.

• Pass comprehensive background checks (fingerprinting, criminal history, child abuse and neglect registry).

• Complete a physical examination within one year of licensure.

• Register with the Gateways to Opportunity Registry (Illinois' professional development system).

Step 2: Prepare your facility

Whether you're opening a home-based daycare or a commercial center, your facility must meet Illinois health, safety, and space requirements before you can receive a license.

Space requirements

Illinois requires a minimum of 35 square feet of usable indoor space per child. This measurement excludes hallways, bathrooms, kitchens, and storage areas. For home-based care, you must identify specific areas that will be used for child care and ensure they meet square footage requirements.

Outdoor play areas are also required for programs serving children regularly. The outdoor space must be fenced, free from hazards, and provide age-appropriate equipment.

Safety and health standards

Your facility must meet comprehensive safety requirements, including:

• Working smoke detectors on every level

• Fire extinguishers that are properly maintained and accessible

• Carbon monoxide detectors

• Secure storage for hazardous materials (cleaning supplies, medications)

• Childproofing measures (outlet covers, cabinet locks, stair gates)

• Clear and unobstructed emergency exits

• Safe water supply (public or tested private well)

• Adequate lighting and ventilation in all child care areas

Equipment and supplies

Stock your daycare with age-appropriate furniture, toys, and learning materials. Essential items include:

• Cribs or portable cribs for infants (must meet current safety standards)

• Cots or mats for older children's rest time

• Child-sized tables and chairs

• Books, puzzles, and educational toys

• Art supplies and craft materials

• First aid kit with current supplies

• Emergency contact information and medical forms

Step 3: Submit your license application

Once you've completed your training, prepared your facility, and passed background checks, you're ready to submit your application to DCFS. The licensing process can take several months, so it's important to submit a complete and accurate application.

After receiving your completed application, a licensing representative will contact you to schedule an inspection to ensure your space is hazard-free. They'll check water temperatures, play equipment safety, fencing, and cleanliness. They'll also interview you to ensure you understand licensing standards, emergency procedures, and your own policies.

Step 4: Design your curriculum and schedule

Design a developmentally appropriate daycare curriculum and daily schedule that promotes children's growth across all domains: cognitive, social-emotional, physical, and language development. Consider incorporating the Illinois Early Learning Standards into your curriculum planning.

Your daily daycare schedule should include a balance of structured activities, free play, outdoor time, meals, and rest periods.

Step 5: Develop policies and a handbook

Clear, comprehensive policies are essential for running a successful daycare. They set expectations for families and staff, ensure consistency in your operations, and protect your business legally.

Your daycare handbook should cover:

• Hours of operation, holidays, and closures

• Tuition rates, payment schedules, and late payment fees

• Enrollment and withdrawal procedures

• Drop-off and pick-up policies, including authorized persons

• Illness policies and exclusion criteria (your daycare sick policy)

• Medication administration procedures

• Meal and snack schedules, including food allergy accommodations

• Nap and rest time schedules

• Guidance and discipline approach

• Emergency procedures (fire, tornado, lockdown, medical emergency)

• Parent communication methods

• Field trip and transportation policies

• Procedures for reporting suspected child abuse or neglect

Provide a copy of your daycare handbook to all families during enrollment and require a signed acknowledgement that they've received and reviewed it.

Step 6: Set up your business operations

Running a daycare is more than just caring for children—it's also a business that requires proper legal structure, financial planning, and operational systems.

Writing a business plan

A comprehensive business plan guides your operations and is essential if you're seeking funding or loans. Your plan should include:

• Executive summary with your mission and vision

• Market analysis identifying community child care needs

• Detailed description of your services and curriculum

• Marketing and outreach strategies

• Staffing plan and organizational structure

• Financial projections, including startup costs, operating expenses, and revenue forecasts

• Supporting documents (licenses, permits, insurance policies)

For detailed guidance, read How to Create a Daycare Business Plan.

Business registration and structure

Register your daycare as a legal business entity with the Illinois Secretary of State. Choose a business structure that fits your needs, such as a sole proprietorship, Limited Liability Company (LLC), or corporation. Each has different tax implications and liability protections.

Obtain a federal Employer Identification Number (EIN) from the IRS, even if you don't initially have employees. You'll need it for tax purposes and business banking.

Insurance requirements

Protect your business with appropriate insurance coverage:

• General liability insurance (covers accidents and injuries)

• Property insurance (covers building and contents damage)

• Professional liability insurance (covers claims related to your services)

• Workers' compensation insurance (required if you have employees)

Many insurance providers offer specialized daycare policies that bundle these coverages. Shop around for the best rates and coverage options.

Step 7: Apply for Illinois daycare grants

Illinois offers several grant programs and funding opportunities to help daycare providers start, expand, and improve their operations. These grants can significantly reduce startup costs and support quality improvements.

State grants and programs

• Smart Start Workforce Grants provide stable, ongoing funding to help child care programs cover higher staff wages without raising tuition. Eligible programs receive consistent funding in advance to attract and retain quality staff.

• Strengthen and Grow Child Care Grants provide significant support to Illinois child care providers, offering quarterly funding based on program type and size. Check with the Illinois Network of Child Care Resource & Referral Agencies (INCCRRA) for current availability.

• Quality Improvement Funds are available through local Child Care Resource & Referral agencies to support programs working toward or maintaining an ExceleRate Illinois Circle of Quality. Funds can be used for training, curriculum materials, environment improvements, and accreditation.

• Gateways Scholarship Program provides scholarships to child care professionals pursuing higher education in early childhood education, offsetting tuition, fees, and book costs.

• Individual Professional Development Funds (IPDF) are available to child care professionals for conferences, workshops, and credentialing expenses.

Private foundations and local grants

• Crown Family Philanthropies supports early childhood education programs with grants focused on quality improvement and accessibility.

• Chicago Community Trust provides grants to early childhood programs in the Chicago metropolitan area, emphasizing equity and innovation.

• PNC Grow Up Great offers grants for curriculum development, teacher training, and classroom resources.

• Local county grants offer child care provider grants funded by state cannabis tax revenues. Check with your local government for available opportunities.

Step 8: Hire qualified staff

If you're opening a center or group day care home, you'll need to hire qualified staff who meet Illinois requirements. The quality of your staff directly impacts the quality of care you provide. Look for candidates with early childhood education credentials or experience.

Conduct thorough interviews, check references, and conduct background checks for each candidate. Offer competitive salaries, ongoing training, and professional development opportunities to attract high-quality staff.

Step 9: Market your daycare

Once you're licensed and ready to open, you'll need to market your daycare to attract families. Effective marketing helps you build enrollment, establish your reputation, and create a strong presence in your community.

Online presence:

• Develop a logo and color scheme for consistent branding across all marketing.

• Create a simple, professional website optimized for local searches.

• Sign up with TrustedCare to find parents in your area looking for childcare.

• Secure your Google My Business profile to appear in local searches.

• Use social media platforms for updates, photos, and testimonials.

Community networking:

• Partner with local businesses, schools, and pediatricians.

• Attend community events and parenting groups.

• Host open houses and facility tours for prospective families.

• Advertise in local publications and parent magazines.

Check out our Daycare Marketing Ideas guide for more strategies and free advertising tips.

Step 10: Maintain your license

Illinois daycare licenses are valid for three years. DCFS will notify you approximately six months before your expiration date.

To renew your license, you must submit an updated application with current documentation, including proof of completed continuing education (15 hours per year), updated background checks (if five years have passed), current insurance certificates, and any required inspections.

DCFS conducts annual unannounced inspections to ensure your facility continues to meet health and safety standards. Inspectors will review your records, observe your operations, and check for compliance with licensing regulations. Maintain your facility and documentation in inspection-ready condition at all times.