How to Start a Babysitting Business

Launching a babysitting business can be more than just a side hustle — it can be a legitimate, scalable project that allows you to build a professional brand and offer families a reliable and consistent service that they can count on.

Having said that, you should remember that the trick to running a successful babysitting business is just that — treating it as a business.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own babysitting business, from conducting market research and securing funding to acquiring the necessary licenses, setting up operations, and attracting customers.

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Industry Overview

The U.S. child care industry — which was valued at USD 61.70 billion in 2023 — is experiencing steady growth and is projected to expand at a compound annual growth rate (CAGR) of 5.86% from 2024 to 2030.

This growth is primarily driven by three main factors: the rising number of parents returning to office-based work, the increased government funding for child care support (particularly for single and working mothers), and advancements in early learning technologies.

Looking ahead, the trend of families choosing to live independently from extended relatives, coupled with the rise of working mothers — who now make up nearly 32% of the total female workforce in the U.S. according to the Census Bureau — makes it clear that the demand for professional child care services is not diminishing anytime soon.

This growing reliance on professional babysitters makes it a great time to start your own babysitting business assuming you have the right plan in place, which we’ll cover in more detail below.

Startup Costs

If you’re considering whether a babysitting business is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own babysitting business?

Well, it depends. The initial investment for a babysitting business varies widely based on factors such as the licenses you’ll need to obtain, your transportation expenses, and on whether you plan to hire a few part-time sitters or build a larger team to cover more clients.

Below we’ve broken down the most common startup costs you’ll need to account for:

• Hiring Costs ($2,000 – $5,000 Per Sitter): You will need to budget for hiring 2-3 part-time sitters, covering expenses for recruitment, background checks, and initial training to ensure a professional and trustworthy team.
• Training and Certifications ($200 – $500 Per Employee Per Year): You will need to invest in courses like CPR, first aid, and child safety training to keep your skills up-to-date and maintain a strong professional reputation.
• Transportation Expenses ($500 – $1,500): You will need to factor in travel-related costs such as gas, vehicle maintenance, and mileage since you’ll be commuting between clients’ homes to provide care.
• Supplies and Equipment ($500 – $1,000): You will need to purchase first aid kits, educational toys, art supplies, books, safety gates, and other materials that help create a safe and engaging environment for the children.
• Licensing and Insurance ($500 – $2,200): You will need to cover the cost of obtaining any necessary business licenses and liability insurance to comply with regulations and safeguard your business against potential claims.
• Marketing ($400 – $2000): You will need to invest in building an online presence through a professional website, setting up social media profiles, and using targeted online ads to reach potential clients and establish your brand.

Note: We recommend having a cash reserve that’s commensurate to around three to six months of operating expenses when starting out. This can help you ensure that you’ll be able to cover any unexpected expenses that occur and remain focused on growing your business.

Earning Potential

Babysitting services offer high profit margins due to the low overhead and minimal ongoing expenses involved; for example, since you’ll be providing your services at clients’ homes, there’ll be no need for a physical office or expensive equipment, which can keep operating costs very low.

This can allow your business to become profitable quickly, even with a relatively small number of clients.

A good way to think of it is like this: if you charge $25 an hour for your service and pay a sitter $15 an hour, your profit will be $10 an hour before factoring in expenses (e.g., transportation). The best part with this model is that it requires almost no capital investment, as you won’t have tied up your money in a physical location or an expensive product, making it easy to get started and scale as your client base grows.

Realistically, most babysitting businesses will start with you — the owner — handling most of the jobs yourself and gradually hiring additional sitters as demand increases.

7 Steps to Starting a Babysitting Business

In order to start a babysitting business, you’ll need to complete the following steps:

1. Planning Your Babysitting Business
2. Registering Your Business
3. Secure Funding (If Applicable)
4. Building Your Local Network
5. Opening a Business Bank Account and Credit Card
6. Getting all Applicable Licenses and Permits
7. Obtaining Business Insurance

We’ve broken each one of these down in more detail below.

Still exploring your options? Check out other small business ideas.

Step 1: Plan Your Babysitting Business

Before diving into your babysitting business, you’ll need to spend some time conducting thorough market research.

You should start by identifying your target clients — are you focusing on busy professionals, single parents, or families with special care needs? Understanding who you want to serve will shape your service offerings and guide your marketing approach.

Next, you will need to evaluate your local market. We recommend researching existing babysitting services to see who your main competitors are and what they offer. You should try to look for gaps in their services (such as limited evening or weekend availability) and think about how you can differentiate your business in order to stand out.

You will also need to consider your pricing strategy. Check what competitors are charging and decide where you want to position yourself — whether you’re aiming to be a premium service, a standard option, or a more budget-friendly choice.

In addition, you should analyze the overall demand. Are there specific neighborhoods with a high concentration of working families? Are there local community events, parent groups, or online forums where you can gather insights?

This will help you evaluate the financial viability of your project — including projected revenues and expenses — and decide whether to focus on basic babysitting services or expand into options like tutoring, overnight care, or drop-in services.

Finding a Suitable Name

Choosing the right business name is both important and challenging.

This is because your name will need to be eye-catching, memorable, and (at least somewhat) related to your industry.

If you don’t already have a name in mind and need help, you can visit our How to Name a Business guide or use our Babysitting Business Name Generator tool.

If you do have a name in mind, we recommend researching the following:

• Your state’s business records
• Federal and state trademark records
• Social media platforms

You will also need to make sure that your business’s name is available as a domain — this is your website’s URL address.

Note: If you’re planning to operate a sole proprietorship, you might want to operate under a business name other than your own name — known as a “Doing Business As” (DBA) name. Keep in mind that this is not recommended for a babysitting business. e before someone else does.

Creating Service Agreements

Prior to starting your babysitting business, you will need to develop detailed service agreements in order to clearly define your terms and set expectations with clients.

You should also create liability waivers that outline your responsibilities and any limitations of liability in case of accidents or unexpected incidents in order to protect your business from potential legal issues and clearly communicate what is and isn’t covered.

While you can draft these documents yourself, it’s recommended to either use an online legal service or consult with a lawyer to ensure that all documents are both legally binding and compliant with your state’s regulations.

Creating a Detailed Business Plan

A detailed business plan is essential for outlining your business strategy and securing funding.

When drafting one, be sure to include an executive summary, market analysis, organizational structure, content strategy, marketing strategy, and financial projections.

Your plan should also clearly define your goals, outline your unique value proposition, and detail how you plan to achieve sustainable growth over time.

This will serve as a roadmap for your business and demonstrate to potential investors that you have a solid strategy in place.

For more information on this step, you can have a look at our How to Write a Business Plan guide.

Step 2: Register Your Business

One important aspect that cannot be overlooked when starting your babysitting business is the importance of establishing a solid business foundation. While sole proprietorships and partnerships are the most common entity types for small businesses, they’re a far less stable and advantageous option than LLCs.

This is because unincorporated business structures (i.e., sole proprietorships and partnerships) expose you as an owner to personal liability for your business’s debts and legal actions, while LLCs protect you by keeping your personal assets separate from your business’s liabilities.

In practice, this means that if your babysitting business were to face a lawsuit or incur any debts, your savings, home, and other personal assets could not be used to cover these costs. On top of this, forming your business as an LLC also helps it to appear more legitimate and trustworthy.

Note: If you’re interested in more information before getting started, we recommend having a look at our How to Start a Business guide (DIY) or our in-depth Best Business Formation Services review (for those opting for a professional service).

Step 3: Secure Funding (If Applicable)

Securing funding is a critical step in starting your babysitting business, with the most common options being bank loans, SBA loans, private investors, and crowdfunding campaigns.

Although most businesses tend to rely on some form of debt financing — especially when aiming for aggressive growth — it is generally not recommended for babysitting businesses unless your debt will be directly tied to a return.

For example, if you have secured several new clients and need to hire 8 more full-time sitters to meet demand, borrowing would make sense because you have contracts in place that will generate predictable revenue over time.

Having said that, if you do not have guaranteed sources of income tied to the debt, taking on loans for expansion is risky and should be avoided.

Step 4: Build Your Local Network

Establishing strong connections within the community is one of the most important foundations for a successful babysitting business.

This is because when it comes to kids, advertising can help, but nothing is more effective than word of mouth and being known as a local business that takes its responsibilities seriously.

Families want the security of knowing that you are a dedicated, reputable service provider in their community who genuinely cares about offering quality child care, and to get them to feel that way, you will need to be visible and actively involved in local activities.

This can include attending community events, joining parenting groups, or volunteering at family-friendly organizations.

Engaging in these activities will help you establish a presence and make meaningful connections, which, over time, can turn into valuable referrals that drive long-term business growth and solidify your reputation.

Step 5: Open a Business Bank Account and Credit Card

Using dedicated business banking and credit accounts is essential when operating as a business owner; this is because when your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) can be at risk in the event your business is sued.

In business law, this is referred to as piercing your corporate veil and is a result of the fact that not having a separate business bank account can be interpreted by some courts as evidence that you are not treating your business as a separate financial entity.

As a result, you could lose your limited liability protections even if you’ve registered a separate business such as an LLC or C Corp.

There are also a variety of practical and economic benefits to this step, such as a larger access to business loans and a more legitimate look.

Getting a business credit card can also be a great idea as it can help you build your company’s credit history from the start.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Step 6: Secure All Required Licenses And Permits

The applicable licenses and permits that you’ll need will largely depend on your state and local regulations.

Even so, we’ve compiled a list of some of the common licensing regulations that you’ll likely need to satisfy in order to operate legitimately.

Business Operation Licenses

At a state level, your babysitting business may be required to obtain a general business license in order to operate — though this will depend on your location.

This process generally involves submitting an application, paying a fee, and meeting specific state requirements.

Home Occupation Permit

If you plan to manage your babysitting business from home — whether for administrative purposes or actual child care services — a home occupation permit may be required.

This permit ensures that your business activities comply with local zoning regulations and can typically be obtained through your local zoning or planning department, though the specific requirements and fees you’ll be subjected to can vary depending on your location.

Child Care License

Depending on the number of children you care for or how frequently you offer services, some states may require your business to get a dedicated child care license.

This license ensures that you meet the required health and safety standards for child care and can usually be obtained through your state’s Department of Health or Child and Family Services.

Step 7: Secure Business Insurance

In addition to securing the necessary permits and licenses, you will need to obtain the right business insurance.

Note

Even if you form an LLC, purchasing business insurance is still a good idea. This is because an LLC structure protects your personal assets, not your business’s.

While specific coverage needs may vary based on factors such as the size of your operations and the specific services you offer, there two key types of insurance that most babysitting businesses should consider:

Babysitter Insurance

Nanny or Babysitter Insurance is a designated coverage that combines the benefits of General Liability and Professional Liability insurance, allowing babysitting businesses to protect themselves from accidents, property damage, and claims of negligence — all within a single, streamlined policy.

The cost for this type of coverage will depend on factors like the size of your business, the number of sitters that you work with, and the specific services you offer, but it will typically range between $400 and $2,400 per annum for a small babysitting business.

Workers’ Compensation Insurance

If your babysitting business will have employees, workers’ compensation insurance is likely going to be a legal requirement depending on your state.

This insurance policy provides coverage for medical expenses and lost wages to employees who are injured during work.

The average cost of workers’ compensation insurance ranges between $45 per month, but this can vary based on factors such as payroll, location, and (once again) your business’s specific risk profile.

Ready to Get Started?

How to Start a Babysitting Business FAQs

Is babysitting profitable?

Yes, starting a babysitting business can be highly profitable due to its low startup costs and high profit margins.

With the right clients and proper management, it’s possible to generate significant income, though this will ultimately depend on the size of your operation and the demand in your area.

How to start babysitting professionally?

To start babysitting professionally, you’ll need to get certified in CPR and first aid, set up your business legally, and develop clear service agreements.

Once that’s done, you should focus on finding clients by networking locally, joining parent groups, and establishing an online presence.

How do I get customers for my babysitting business?

The most important thing you can do for attracting customers is to build trust and visibility in your community.

This is because word of mouth is the strongest driver for child care services, so make sure to network, join local parenting groups, and encourage satisfied clients to spread the word.

How to set up a babysitting company?

To set up a babysitting company, you will need to form a legal entity like an LLC, secure all applicable licenses, and obtain business insurance.

Then, you will need to hire and train sitters, establish clear service agreements, and focus on building a reliable brand that families can trust.