Buying vs Starting a Childcare Business – Proven Pros & Cons
Entering the childcare industry can be both exciting and overwhelming. One of the very first questions new investors or owners face is whether to buy an existing childcare business or start a brand-new center from scratch. It’s a choice that can shape not only your financial future but also how quickly you open your doors and start serving families.
At first glance, the decision might seem straightforward, build your own if you want full control, buy one if you want something already running. But once you dig deeper, the comparison isn’t nearly that simple. Each path comes with hidden costs, different risks, and very different timelines. Which one is truly the smarter choice?
Cash Flow: Buying vs Starting a Childcare Business
Cash flow is the foundation of every business, and in the childcare industry it can determine success or failure. When evaluating buying vs starting a childcare business, it’s essential to understand how financial stability impacts your decision. Knowing what to expect—or what you cannot predict—helps you plan ahead, secure financing, and reduce risk. Buying a school provides historical numbers you can rely on, while starting a new childcare center in Florida means projecting revenue without guarantees. Both paths carry very different risks and rewards, making cash flow one of the most important factors to consider.
When Buying a Childcare Business
When you buy an existing childcare business, you step into a proven operation that already generates income. With financial records in hand, you can analyze performance, secure financing, and start collecting tuition from day one. This path offers a level of predictability that startups simply can’t match.
Pros
Immediate cash flow from existing enrollments
Proven financial history (tax returns, statements) reduces uncertainty
Easier approval for SBA and bank loans thanks to established track record
Faster break-even point — many schools generate profit within the first year
Ability to build on an existing reputation and community trust
Cons
Higher upfront purchase cost
Limited flexibility to restructure finances immediately
Cash Flow - Starting a Childcare Business
Launching a new childcare center may sound appealing, but it means beginning with no revenue and relying on projections that may not materialize. The reality is that many new owners face months of expenses without income, making this option significantly riskier and slower to pay off.
Pros
Lower initial entry cost compared to buying a school
Freedom to design systems and pricing your own way
Cons
No existing cash flow — expenses pile up before the first child is enrolled
Financial projections are uncertain and often overly optimistic
Harder to secure financing without a track record
Break-even timeline can stretch years instead of months
High personal financial risk — startup owners often cover losses out of pocket
Licensing Challenges When Starting vs Buying a Center
Licensing and regulatory approval are some of the most important, and often most time-consuming, steps in the childcare industry.
In Florida, childcare centers must meet strict requirements from the Department of Children and Families (DCF), as well as zoning, health, and safety standards.
Whether you are buying a childcare business or starting a new childcare center, understanding how permits and licensing affect your timeline is critical. Delays or oversights can increase costs and push back your opening date.
For buyers, the focus is on transferring and updating existing approvals, while for startups the challenge is navigating the entire process from the ground up.
Buying - Licensing and Permits
Licensing and compliance are critical steps in the childcare industry, and they often create major differences when comparing buying vs starting a childcare business. When you purchase an existing childcare center, much of the groundwork has already been completed. The facility has typically met Department of Children and Families (DCF) requirements, zoning rules, and safety standards. Although licenses themselves are not transferable, the seller usually assists in the transition so the new owner can continue operating without major interruption.
Pros
Facility already meets licensing, zoning, and safety standards
Faster path to opening — operations continue during transition
Seller and attorneys typically coordinate the licensing handover
Lower risk of delays compared to starting a new school
Cons
Paperwork still required to update licenses under new ownership
Some accreditations may need renewal depending on timing
Starting - Licensing and Permits
Launching a childcare center from scratch means navigating licensing and permits from the very beginning. In Florida, new facilities must pass inspections, secure zoning approval, and complete DCF licensing before a single child can be enrolled. This process can often last more than expected, between a one and two years, and often comes with unexpected costs and setbacks.
For more information about the initial requirements please refer to this link from DCF where you can download this guide
Pros
Opportunity to design the facility to meet your standards
Flexibility to choose accreditations and programs that match your vision
Cons
Licensing delays can push back opening by 6–12 months
Multiple inspections and approvals increase costs significantly
Navigating complex regulations without prior experience is overwhelming
Risk of paying rent and overhead while waiting for final approvals
Staffing and Employees in Childcare Businesses
Hiring and retaining qualified teachers and staff is one of the biggest challenges in the childcare industry. A childcare center is only as strong as the educators and caregivers who work with the children every day.
Whether you are buying an existing childcare business or starting a new childcare center, staffing will play a major role in your success. Buyers benefit from taking over an established team, while startups face the task of recruiting and training from scratch.
Buying a childcare - Staffing
Pros
Trained teachers and directors already in place
Continuity for families, minimizing disruption and turnover
Payroll structure and staffing ratios already established
HR records, background checks, and training files maintained
Faster ability to focus on growth instead of recruitment
Cons
Some staff may need time to adjust to new leadership
Existing systems may require gradual updates
Starting a new childcare - Staffing
Staffing is one of the biggest differences to evaluate when considering buying vs starting a childcare business. When you buy an existing childcare center, you also gain a team of teachers and staff who already know the children, parents, and routines. This continuity builds trust with families and helps keep operations running smoothly from day one. A strong staff is often one of the most valuable assets in a childcare acquisition.
Pros
Freedom to create your own workplace culture and standards
Ability to hire staff that match your exact vision and curriculum
Cons
No existing staff, must recruit and train from zero
Payroll expenses begin before enrollment generates income
High turnover risk during the first year as systems are tested
Time-consuming licensing compliance, background checks, and training
Competitive labor market requires stronger pay and benefits to attract talent
Why Financing Is Easier When Buying
Securing financing is often one of the biggest hurdles when entering the childcare business. Banks, lenders, and the SBA look for stability, reliable cash flow, and a proven ability to repay loans.
That’s why buying an existing childcare center is usually easier to finance — the school already has financial records, enrollment history, and established operations that lenders can evaluate.
By contrast, starting a new childcare business means presenting only projections. Even with a strong business plan, lenders view startups as higher risk since there is no track record to support the numbers. While funding is still possible, the process often takes longer, requires more collateral, and comes with stricter terms.
Conclusion: Buying vs Starting a Childcare Business
Choosing between buying a childcare business and starting a new childcare center in Florida is one of the biggest decisions any investor will face. Both options have their place, but when you look at the factors that matter most — cash flow, licensing, employees, and financing — buying consistently proves to be the safer, faster, and more reliable path.
Buying an existing childcare center means stepping into a school with immediate revenue, trained staff, and a proven financial record that makes financing smoother. Licensing and regulatory hurdles have already been cleared, and parents already trust the center with their children. In contrast, starting from scratch requires months of preparation, heavy upfront expenses without income, and far greater uncertainty.
For most buyers, the evidence is clear: purchasing an established childcare business is a lower-risk investment with a faster return compared to building one from the ground up.
Contact us with any questions at 954-228-8291 or email info@llunainvestments.com
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