How to start a preschool at home: licensing, space, staffing and costs

In the states used as worked examples below, the rules we checked set the home-based child care threshold by headcount: how many children are served on a regular basis.

Our research did not confirm whether any of these states treats a part-day preschool differently.

Whether your own state does is the question to put to the agency first.

Montana's child care licensing runs through the Montana Department of Public Health and Human Services (DPHHS), and its current rules sit in ARM Title 37, chapter 96.

The rule sorts facilities by size: a family child care facility serves 3-8 children, a group child care facility serves 9-15 children, and a child care center serves 16 or more children in an out-of-home setting (ARM 37.96.102(2)).

Alongside the size bands, any provider serving seven or more children on a regular basis must be licensed or registered — centers must be licensed, group facilities serving 9-15 and family homes serving 7-8 must register, and drop-in and school-age facilities may choose whether to be licensed (ARM 37.96.102(3)).

Two other states show how differently the same headcount can land.

Missouri exempts from licensing anyone caring for six or fewer children, including no more than three under age two, at the same address (RSMo 210.211).

Virginia goes the other direction: home-based child care serving five through 12 children — not counting the provider's own children and any children who reside in the home — must be licensed (Va.

Code 22.1-289.02).

Under those headcount rules, five children in a home, none of them the provider's own, falls inside Virginia's licensing band and inside Missouri's exemption; nine children in Montana falls in the group facility band, which must register.

None of the rules cited here was checked for a separate preschool or part-day carve-out, so read them as the general home-based rules, not a settled answer for a preschool program.

Whether your state carves a part-day preschool into its own licensing category is a question for your state child care licensing agency — ask it directly.

Two adjacent routes have their own guides: the full-day home route is covered in how to start a home daycare, and the preschool route in a rented or built-out space is covered in how to start a preschool.

Two qualifications keep an exemption from becoming a business plan.

First, exemptions can carry conditions: since 2023, a Montana provider caring for six or fewer children in a private residence need not register — but that exemption does not apply to providers receiving state child care subsidy payments (MCA 52-2-721(7)).

Second, the federal floor follows the money: under the Child Care and Development Fund (CCDF) rules in 45 CFR part 98, license-exempt providers paid with CCDF subsidy must still meet federal health, safety and background-check requirements, with the relatives specified in 45 CFR 98.42(c) the main exception to the health-and-safety rules.

Confirm before you enroll anyone: licensing thresholds, exemptions and subsidy conditions are set and enforced by your state child care licensing agency — in Montana, DPHHS Child Care Licensing — and they change: Montana's current rules, ARM Title 37, chapter 96, took effect May 1, 2025.

Ask the agency where your planned enrollment, ages and schedule land before you buy equipment or admit the first child.

Work from your state's size category backwards, because the category decides what the home has to support.

Montana's bands show the mechanic: family child care covers 3-8 children, group child care covers 9-15 children, and the next category — the child care center, at 16 or more children — is defined as an out-of-home setting (ARM 37.96.102(2)).

Under those bands, a home-based program in Montana tops out at 15 children; the sixteenth seat belongs to a center.

Inside the home, plan the room list around the day a preschool actually runs: a landing zone for arrival and coats, table space for meals and projects, open floor for blocks and pretend play, a quiet corner for books, a bathroom route children can reach without crossing the program, and outdoor play the schedule can use every session.

Keep traffic and sightlines honest — if an adult standing at your planned stations cannot see every space in use, the room plan is not ready.

A part-day schedule puts the space to work differently from full-day care: circle time, table work and outdoor play fill the session, and nap infrastructure matters less.

The safety and space baseline, though, is the state's rather than the schedule's — expect the agency's requirements list to cover items like indoor space, outdoor play space and equipment, with specifics that vary by state — so walk your home against that list before you buy anything.

Keep the receipts for what you install or change; they feed the insurance and budget steps later.

Staffing starts from the ratio your state sets for the ages you enroll, because the ratio decides whether one adult can carry the room.

Montana's family and group child care facilities with mixed ages may use an 8:1 ratio with no more than three children under two, and two staff are required whenever more than three under-twos are present; facilities serving only under-twos must use 4:1 (ARM 37.96.106(5)).

Read against your roster, more than eight children or more than three under-twos moves a mixed-age home program from one adult to two.

The owner is on the roster too.

Montana writes its annual training rule to cover staff and owners alike: anyone working more than 500 hours a year must complete Practitioner Registry-approved annual training — 16 hours in licensed centers and registered family and group facilities, and 8 hours in licensed school-age care and registered FFN care (ARM 37.96.915).

Put those hours on the calendar at launch rather than at renewal time.

What qualifications the state expects of you personally as the operator is part of the same conversation with the licensing agency — ask for the requirements that attach to the family or group category you would register under.

If the ratio math or a longer schedule pushes past one adult, you are hiring an assistant, and the screening clock starts before the first shift.

Montana's background-check rule requires checks before working and annually after, with the national components every five years: Montana DOJ and FBI fingerprints, the national and Montana sex offender registries, and child protective services and name-based criminal checks for Montana and every state a person lived in during the past five years (ARM 37.96.1002).

Build that timeline into the start date rather than around it — and what happens between a signed offer and a fully cleared check is its own topic, covered in provisional hire pending background checks.

The wider home-capacity picture — how many children one home provider can care for, and whether your own children count against the total — sits in our guide to family child care home ratios.

The hiring motion itself is the same discipline a new center follows: staffing a new program sequences the searches against licensing and background checks.

And to see the candidate's side of that search before you write the posting, browse preschool teacher jobs.

On pay, benchmark against your own market rather than a national anecdote — the preschool teacher salary page carries state-by-state BLS figures to hold a wage decision against.

Start with what the state itself charges, because there is no reliable national number to lean on: our research did not verify a national figure for licensing fees or timelines, since both are set state by state.

Montana is one data point — state law forbids DPHHS from charging any fee to issue a child care license or registration certificate (MCA 52-2-721(4)(b)) — and your own state's current schedule is the number that belongs in the budget.

The home setting deletes some lines a center budget carries — no commercial lease, no purpose-built build-out — but what remains is real: equipment and materials for the age mix you enroll, outdoor play surfaces, gates or fencing where the space needs them, cleaning and consumables, and the tools that keep enrollment, attendance and incident records straight.

Price those against your planned capacity, not against the room you hope to fill.

Two more lines belong in the budget from day one.

Food is one, and the Child and Adult Care Food Program reimburses participating providers for served meals — the CACFP guide for childcare providers covers participation and the current tables.

Insurance is the other: whether your state sets a minimum and what coverage fits a home program are walked through in the daycare insurance guide, with a home-daycare-specific version alongside it.

The line that grows with ambition is staffing.

A September 2021 U.S. Treasury report, citing a Center for American Progress cost analysis, put wages at no less than 50-60 percent of child care expenses on U.S. averages, with labor's share larger for infant care; the same report described most for-profit child care facilities as operating on razor-thin profit margins usually below 1 percent.

For a home program that is not a discouragement — it is an instruction to price tuition from your real cost lines, including the wage the program owes you and any assistant the ratio requires.

The setting daycare tuition rates guide walks the pricing math.

Confirm before you budget: licensing fees are set state by state and change, liability insurance minimums are state law where they exist, and subsidy adds federal CCDF conditions on top of your state's rules.

Your licensing agency's current schedule, your insurer and your state's CACFP agency are the sources that count.

The order below keeps spending behind answers.

Each step is small; the sequence is what protects the budget.

1. Ask the threshold question first. Contact your state child care licensing agency with your planned enrollment, ages and schedule, and ask which category you land in and what the application requires. The full operator walkthrough, state by state, is our guide to how to start a daycare.
2. Fix capacity and ages deliberately. The number drives the facility work, the ratio math, the training calendar and the budget at once. In Montana it also picks your category: 3-8 children is a family facility, 9-15 a group facility, and 16 or more moves the program out of the home bands entirely.
3. Map staffing against the ratio before setting an opening date. Decide solo-versus-assistant, put the owner's annual training hours on the calendar, and start background checks early enough to finish before the first session.
4. Prepare the home against the agency's standards — the requirements packet from step one is the specification — and only then spend on equipment.
5. Write the operating documents: an enrollment agreement, the policies families need in writing, and the incident and emergency procedures your state describes. The daycare parent handbook guide covers what belongs in writing.
6. Budget from your state's real numbers, then post the teaching role early enough that checks, training and paperwork finish before your first session.

None of these steps is heavy alone.

Regulatory answers first mean equipment bought once, a capacity chosen against the real ratio, and a start date the background checks can actually meet — which is how a home preschool opens without rework.

This page is employer information, not licensing or legal advice. Licensing thresholds, ratios, training and background-check rules are set and enforced by your state child care licensing agency — in Montana, DPHHS Child Care Licensing — and they change. Confirm the current rules with the agency before you apply, enroll children or hire.