How to Start a Daycare in South Dakota: Licensing Steps, Costs and Staffing

South Dakota child care is licensed and registered by the South Dakota Department of Social Services (DSS), through its Division of Child Care Services and the Office of Licensing and Accreditation.

The operative rules sit in ARSD 67:42:17, the consolidated child care licensing chapter that took effect July 3, 2023, alongside the day care statute at SDCL 26-6-14.

State law sorts what you can open into three capacity categories — day care center, group family day care home and family day care — covered next.

South Dakota's statute sorts care by capacity, and the category decides what you apply for.

A day care center is care for 21 or more children, and a group family day care home cares for 13 to 20 children; both are licensed, and the counts include children under six living in the home.

Family day care — up to 12 children — is a registration rather than a license, and the registration rules apply only to homes paid directly or indirectly out of public funds; homes not paid with public funds are not covered by them.

A registered family day care home may not be registered for more than 12 children at a time, including children under six living in the home, and registration certificates last two years.

For a center or school-age program the sequence starts before the paperwork: the program submits a building, renovation or alteration plan to the department and obtains its approval, then submits the license application.

After that, DSS must provide written notice of approval or denial of licensure or registration within 60 days of receiving a completed application.

Our research captured the plan-approval and 60-day decision steps but not a step-by-step account of an on-site inspection; ask the Office of Licensing and Accreditation what your operation type should expect.

The background check runs alongside: DSS's licensing handbook starts it with fingerprinting and adds out-of-state criminal and central registry forms for adults who lived outside South Dakota in the past five years.

The center director — the rule's program administrator — is at least 18 with one of six routes: a bachelor's in education or human development, a two-year early childhood education degree, a CDA or comparable credential, a child-learning-philosophy certification plus one year of experience, a child development technician diploma, or four years of center or school-age program experience.

A center owner may be an agency, institution, organization or person at least 18.

Providers — the direct-care staff — must be at least 18; the rule sets no degree or CDA requirement beyond demonstrated ability to care for children.

Assistants may be 14 but may not be left alone with children and count in ratio only under a provider's or director's direct supervision.

Federal CCDBG background checks reach all providers, program employees 14 and older and family day care household members 18 and older — repeated at least every five years, starting with fingerprinting.

New providers finish orientation training in 13 areas within 90 days of hire and before unsupervised care, hold pediatric CPR with a hands-on skills test, complete pediatric first aid every five years and, when counted in ratio, 10 hours of annual training (family day care: 6 hours).

Center ratios are broad age bands: 1:5 for children up to age 3, 1:10 for ages 3 to 4, and 1:15 for age 5 and over, and a staff member's own children count.

Group size is set by the approved capacity of each room rather than by age, and a room may take up to three extra children when ratios are maintained.

A mixed-age program of 20 or fewer children staffs at 1:10, with each provider caring for at most four children under two (no more than two under one); larger mixed groups use 1:5 when three or more children are under three.

In a family day care home, one provider may care for up to 12 children — alone, no more than four may be under two and no more than three of those under one, and with an assistant up to eight may be under two — and the provider's own children under six count.

The clock the rule sets for applications: DSS must provide written notice of approval or denial of licensure or registration within 60 days of receiving a completed application — and for a center or school-age program, the building, renovation or alteration plan must be approved before that application goes in.

Family day care registration certificates last two years.

Our research of ARSD 67:42:17 did not find a license or registration fee — the rules we read list none — so ask the Office of Licensing and Accreditation for the current schedule before you budget, and our research found no South Dakota startup-cost figures either.

For context on margins, a September 2021 U.S. Treasury report described most for-profit child care facilities as operating on razor-thin profit margins usually below 1 percent, and — citing a Center for American Progress cost analysis — put wages at at least 50-60 percent of child care expenses on U.S. averages.

South Dakota's operator supports run through DSS.

Child Care Services collaborates with five regional Early Childhood Enrichment (ECE) sites that deliver licensing-required and quality training, technical assistance and coaching to providers.

Two programs aim at leadership and quality: Director 360 gives child care directors monthly coaching through the regional ECE offices and the Office of Licensing and Accreditation, and Quality Care South Dakota — the state's quality recognition system, developed by DSS with the South Dakota State University Quality Collaborative for registered family child care, licensed centers and school-age programs — gives participants coaching and resources and recognizes them as they achieve quality level designations.

Pathways to Professional Development recognizes people working with children from birth through age 12 for their education and training, and the state's SDCDA Training Program through the ECE sites covers the 120 hours of formal training and mentorship the national CDA credential requires.

Our research did not confirm a South Dakota startup grant for new operators; ask your regional ECE site and DSS what funding is currently available.