How to Start a Daycare Business in Tennessee

Licensed child care — a home-based family daycare or a center. Here's the Tennessee-specific path — structure, licensing for daycare work, taxes, insurance, and landing your first customers.

Tennessee LLC fee

~$300

Formation time

immediate online

Startup range

$2,000–$15,000 (home) to $50,000–$300,000

Bond required

typically no

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daycare license in Tennessee: do you need one?
Child care is one of the most heavily licensed small businesses — state licensing covers staff-to-child ratios, background checks, square footage, safety, training hours, and regular inspections. Requirements differ sharply between a home daycare and a center. In Tennessee, the state board or agency that handles daycare licensing is linked below — check it, and your city or county business-license office, before you advertise or take a job. If Tennessee doesn't license daycare work at the state level, a local business license (and often liability insurance) is still expected.
Tennessee professional & occupational licensing ↗
What it costs to start a daycare business in Tennessee
Plan for $2,000–$15,000 (home) to $50,000–$300,000 (center) to get operational. On top of that: about $300 to form a Tennessee LLC, then an annual report is due (~$300), a free EIN from the IRS, and general liability insurance — a few hundred dollars a year for most solo operators.
What a daycare business needs before day one
Licensed child care — a home-based family daycare or a center. The parts that actually matter for daycare: State child care license (home or center), Background checks + ratios + training, Facility safety and inspections, Enrollment contracts and tuition, Food program.
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Form the business in Tennessee
You can operate as a sole proprietor with no filing, or form an LLC for liability protection — for hands-on daycare work most owners choose the LLC. The Tennessee LLC filing fee is about $300 and formation takes immediate online. Then get a free EIN, open a business bank account, and register for Tennessee sales tax if you'll sell taxable goods or services.
The full Tennessee LLC walkthrough — fees, forms, and steps ↗
What to charge for daycare in Tennessee
$150–$350/week per child depending on age and market (infants highest), with registration and supply fees. Home family daycares run lower; centers higher with more overhead. Subsidy and state-assistance families are steady payers. Check what the established daycare businesses in your city actually charge before you set your rates — pricing to undercut them is the fastest way to work the first year at a loss.
Getting your first daycare customers in Tennessee
State child-care referral networks, Nextdoor and parent Facebook groups, and word of mouth. Waitlists are normal once you're established and reviewed. Reputation among parents is everything; regulatory compliance is non-negotiable. Chronic undersupply in most of the country — waitlists are normal once you're licensed and reviewed. Enrollment is stickiest for infants and toddlers; state child-care referral networks and parent Facebook groups fill spots.
The mistake most first-year daycare owners make
Treating licensing as paperwork instead of the product. Ratios, background checks, square footage, safety, and inspection compliance aren't hurdles to clear once — they're the daily operating standard, and a violation can close you.

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Frequently asked

How do I start a daycare business in Tennessee?

Confirm the licenses for daycare work in Tennessee, pick a structure (sole proprietor or LLC), get a free EIN, register for Tennessee taxes if you'll collect sales tax, open a business bank account, get general liability insurance, then set up your Google Business Profile and line up your first jobs.

Do I need a license for a daycare business in Tennessee?

Child care is one of the most heavily licensed small businesses — state licensing covers staff-to-child ratios, background checks, square footage, safety, training hours, and regular inspections. Requirements differ sharply between a home daycare and a center. Check the Tennessee licensing agency and your local city or county before you advertise.

How much does it cost to start a daycare business in Tennessee?

Plan for $2,000–$15,000 (home) to $50,000–$300,000 (center), plus about $300 to form a Tennessee LLC. An EIN is free and general liability insurance runs a few hundred dollars a year for most solo operators.

What should I charge for daycare in Tennessee?

$150–$350/week per child depending on age and market (infants highest), with registration and supply fees. Home family daycares run lower; centers higher with more overhead. Subsidy and state-assistance families are steady payers.

How much do daycare businesses make in Tennessee?

It depends on your rates and how booked you stay. See the daycare income and pricing breakdown for typical owner take-home and what to charge.

How much does a daycare business license cost in Tennessee?

It depends on exactly which daycare license or permit applies — a state professional license commonly runs $50–$300 plus any exam or renewal fee, and a local city/county business license is often another $25–$100. That's separate from the ~$300 Tennessee LLC filing fee if you form one. Check the Tennessee licensing agency above, or use the License Finder tool, for the exact fee for daycare work.

How much does daycare business insurance cost in Tennessee?

General liability insurance for a solo daycare operator typically runs $300–$800 a year, more if you carry commercial auto coverage or a higher liability limit. Clients, landlords, and some license boards require proof of coverage before you can start daycare work in Tennessee.

Where do the first daycare customers come from?

State child-care referral networks, Nextdoor and parent Facebook groups, and word of mouth.

Official sources

Fees and timelines are commonly-cited figures last reviewed September 2026 and can change — always confirm on the official site. This is educational information, not legal or tax advice.

How to Start a Daycare Business in Tennessee

See your Tennessee daycare launch plan

daycare license in Tennessee: do you need one?

What it costs to start a daycare business in Tennessee

What a daycare business needs before day one

Form the business in Tennessee

What to charge for daycare in Tennessee

Getting your first daycare customers in Tennessee

The mistake most first-year daycare owners make