How to Start a Licensed Childcare Program in Texas
So, you are looking to open a childcare center, early learning academy, daycare center, afterschool program, or other early childhood program in Texas.
What do you need to do?
Well the short answer is there are a lot of steps to opening a Childcare Center in the state of Texas. But it is doable; it is manageable; you can make this happen!
Let me layout some of the basic steps for you here:
- Determine business structure
- Select Name
- Register Name
- Set up governing documents
- Get an EIN
- Get realtor
- Find location
- Start marketing
- Take licensing course
- Get a Director
- Fire & Health inspection
- Certificate of Occupancy
- Submit licensing application
- Licensing Inspection
First we need to look at the legal framework for your business. You need to decide if you’re going to be a sole proprietor, have an LLC, a partnership, or a corporation. you also are going to need a name for your business. Once you’ve made those decisions you need to register your business at the local and state level.
Once you have selected a name for your business, you will need to verify that the name is available. Do this by searching your county’s assumed names and the Texas corporate registry. Doing this now will save you a lot of time and frustration down the line.
At the local level, you need to set up a “Doing Business As” (DBA) or an assumed name at your local county. This is usually an inexpensive and pretty quick process taking between one day and a month depending upon your county’s workload. You fill out the form asking for your business name and pay a small fee and submit the paperwork to the county. They will research it to make sure that no one else has that name in your county and then they will grant you your DBA or assumed name. You will need this in order to sign leases or get a bank account in your business name.
Before you move on to the Secretary of State, you need to establish your governing body documents unless you are going in as a sole proprietor. For partnerships you will need a partnership agreement (make sure it addresses death, divorce, disinterest & addiction). For LLCs and corporations you will need a registered agent and at least an operating agreement. Corporations also need bylaws and officers.
You must submit your business to the Secretary of State. What all you will need to submit depends upon your business type. Please refer to the Secretary of State’s website for more information on which forms need to be submitted. Most banks will also require that you have your secretary of state letter before you can open a bank account. The Secretary of State letter can take as little as one week or as long as six months depending upon the workload at the Secretary of State.
The last of these preliminary steps is getting your EIN from the federal government.
Now that we have your basic legal framework set up it is time to get your bank account and to research local requirements for childcare.
If you are in a city or town you will reach out to their zoning and planning departments to find out which zones allow childcare. Additionally, you need to find out if there are signage and parking requirements in your locality. If you are not inside a city or town and are in a county, you will reach out to the county planning department to see if there are any specific restrictions for childcare in your county.
If you are planning on having a full commercial kitchen in your childcare program to offer the food program, you will also want to talk to your local health department (either county or city) to see what requirements they have for your commercial kitchen. Most health departments require that commercial kitchens have a 3-bay dishwashing sink and a hand washing sink, a refrigerator, a grease trap, and some way of heating food. Some counties additionally require an air gap and a mop sink. It is important to make sure that you have everything that is required in your county.
Now that you know what the requirements are it’s time to look for a piece of property. You need to find a building that meets the zoning and parking requirements of your locality and that has either as much plumbing as you’re going to need, or the ability to add additional plumbing. You want it to be in a location that works for the market you have decided that you would like to serve. If you are planning on serving primarily high-income families you don’t want your Center in a strip mall. However if you are looking to serve primarily parents who are working in retail and service-based businesses a Center in a strip center might be the perfect location. It depends on your ideal customer.
To help you with finding the right location I suggest working with a commercial realtor who you communicate well with. If in your locality child care Centers can be put into residential neighborhoods, working with a residential realtor might work as well. Making sure that you and the realtor communicate effectively is key here. Interview multiple realtors before making your selection. This person is going to be responsible for your single biggest financial expenditure in this process. You need to make sure that they understand what you’re looking for and what you can spend.
What to look for in a location
Your license capacity will be based on the Classroom square footage, playground size & the number of sinks and toilets available to the children. You rarely find a building that meets your requirements as is. If you find one that has been a daycare center in the past, it is important to determine why they went out of business. If the market in the area has changed and there are no longer a lot of small children in the area, then you should not open a learning center there. If the prior center had a bad reputation, then you can open in that location but you need to make it very clear that this is a New Center with a new owner. More often, however, you will find buildings that have had another use. This means you or the landlord will be doing some level of remodeling to make the space work for childcare. Think through where the plumbing is. How easy will it be to add additional plumbing? Is there good visibility of your signage from the street? Can you give it good curb appeal that will appeal to your client? These are some of the questions that you need to ask before signing a lease.
- 30 sqft of use space per child
- 1 toilet for every 17 children over 18-months-ol
- 1 handwashing sink per 17 children over 18-months-old
- 1 handwashing sink for each diaper change station
- 80 sqft of outdoor activity space for each child using the outdoor activity area at a time
- Curb appeal
- Kitchen area
- Walls to be added or removed
- Trash collection
Once you have found a location, you will almost certainly need to make some changes. Sometimes this is as little as painting walks & adding signage. It is more likely that you will need to add something to the indoor & outdoor space. Before you start these changes, check in with your municipality to see if you need a permit for the changes. If you are in a property Owners Association (POA) or HomeOwners Association (HOA) there may be additional requirements. Pulling the permits & getting the inspections may not be your favorite thing, but if you need them & didn’t get them, it will keep you from getting your certificate of occupancy (which you will need to get your license).
Having your building & having decided on what needs to be remodeled…it is TIME TO MARKET!
You need to let people know that your wonderful program is coming to the area. How exactly you do that will depend on whether you have more $$$money or ⏳time. Publicity takes more time & less money. Advertising takes more money & less time. If you want ideas on marketing your program, listen to our podcast, Colorful Clipboard. We have lots of ideas from t-shirt marketing to event marketing, to print advertising to speaking at local organizations and probably a dozen other marketing topics over the years. If you want more help, join our coaching program. You need to be reaching people during your remodeling process. Talking to them & getting them excited. This is a great time to build your waiting list!
As a new daycare or afterschool program in Texas, you will need to take an online course from the Department of Health & Human Services. HHS is the child care licensing agency in Texas. You can take it earlier in the process, but I put it here because the certificate is only good for a year and sometimes the real estate odyssey takes a reeaalllly long time. If you took the class back at the selecting your name step & it takes longer than you were expecting to get ready to open, just take the class again.
Now that you know what your responsibilities are as the permit holder, it is time to line up your Director. The Director is the only member of staff that licensing requires. You don’t have to have teachers, assistants, floaters, or kitchen managers, but you must have a Director. Your Director will be the face of your business. You, as the owner, can also be the Director, or you can hire someone else to take that role. Either way they need to meet the qualifications & be prepared to do the job. I recommend that every Director take a Director Credentialing course from a respected organization or college so that you KNOW they are prepared for all of the duties of the job. Having an unprepared Director will create havoc in your center. They must have some knowledge of child development, marketing, staff relations, relevant laws, parent communication, child guidance, and conflict resolution. If there is one area that they have no grounding in then that will be the point of failure in your program. Your Director will also help you in implementing your marketing program, and preparing for inspections.
Once you have an employee you will need to register with the Texas Workforce Commission to get your Texas employer ID number. You will also want some sort of payroll system. I recommend one that also handles paying & preparing your employee taxes.
You and your Director now enter into the home stretch…getting ready to open. Finish all remodeling & get your final building inspection. If you have gas heating or hot water you will also need a gas line inspection. Then you can schedule your fire inspection. The fire inspection looks at your entrances & exits from all rooms & the building as a whole, smoke detection & suppression systems (fire extinguishers or sprinklers), wiring & fire hazards. The fire marshal’s office can provide you with a blank inspection form in advance if you ask. Almost all fire inspections have a fee associated with them. Just as an FYI, You will be having annual fire inspections also.
Next will either be the Certificate of Occupancy or health inspection, depending on your location. The certificate of occupancy is generally just a formality (with a fee) that says that your area government verifies that you can operate a childcare center in your building as it is now. The health inspection covers immunization, food service, trash disposal, pest control & disease prevention. As with the fire department, you can ask for the inspection form in advance.
Once you have your health & fire inspections & your certificate of occupancy, you can submit your application. Below are the licensing forms you will need to submit along with your building plan & copies of both your employees & parent handbooks.
- Form 2760, Controlling Person – Child Care Licensing (English and Spanish)
- Form 2910, Child Day Care Licensing Application
- Form 2948, Plan of Operation for Licensed Center Operations
- Form 2985, Affidavit for Applicants for Employment with a Licensed Operation or Registered Child-Care Home
- Form 2911, Child Care Licensing Governing Body/Director Designation
- Form 2962, Verification of Liability Insurance
- Form 2982, Personal History Statement
- Form 2971, Child Care Licensing Request for Background Check (English and Spanish)
- Form 2985, Affidavit for Applicants for Employment with a Licensed Operation or Registered Child-Care Home (English and Spanish)
- Form 7263, Emergency Practices
- Form 7243, Emergency Telephone Numbers
Licensing has up to 6 weeks to schedule your initial inspection from the date they receive your completed application with copies of your certificate of occupancy, health inspection & fire inspection. They generally don’t take that long. It is more often a matter of days or weeks.The more clear & concise your answers to the questions on the licensing forms and supporting documents are, the quicker things will go. (Creating a handout to go with your handbooks, citing where the different things required by licensing are in your policies is my secret trick.)
The initial inspection will take several hours. Clear your whole day for the inspection. Be professional, relaxed and helpful. Your inspector cannot take any “gifts” so don’t offer snacks but having a bowl of candy on your desk & getting them some water or tea to drink will make their visit more pleasant.
They may find a few things wrong. You are new to this. That isn’t a big deal; just fix the issues ASAP and send your representative/inspector an email with proof of the correction. Most of them expect there to be a learning curve for you. Once you have corrected any deficiencies, they will issue your license.
NOW OPEN YOUR DOORS to all those families who enrolled while you were remodeling & getting inspections!
If all of this seems like a lot. It is. As I said in the beginning, you can do this. You might need help. I get that. If you want some help, just reach out to us at Carrie@TexasDirector.org and we’ll set up a coaching plan just for you!