How to Start a Nanny Business: A Succinct Guide

How to Start a Nanny Business

Starting a nanny business can be a rewarding and profitable venture for individuals who are passionate about childcare and providing professional services to families in need. As the demand for quality childcare continues to rise, launching a well-planned and efficient nanny agency can fill an essential role within your community. This article aims to provide you with the necessary steps and insights to begin your journey into the nanny business world with confidence and ease.

Before diving into the creation of your nanny agency, it’s crucial to identify your target market and conduct thorough research on the local competition. Understanding the needs and preferences of families within your area will allow you to tailor your services and pricing strategies effectively. Additionally, equipping yourself with knowledge about legal requirements, registration processes, and insurance options will ensure a smoother and successful launch of your business.

As you work through the various stages of starting your nanny business, key elements such as conducting background checks, interviewing potential nannies, and matching them with suitable families play a vital role in establishing your agency’s credibility and reputation. By focusing on these core principles and adapting them to the specific needs of your community, you’ll be well on your way to creating a thriving and respected nanny business.

Market Research and Business Plan

Identify Target Market

Identifying the target market is essential for starting a nanny business. Figure out who your ideal clients are, such as families or parents seeking childcare services. Consider the family’s demographics, such as income level, number of children, and location. By identifying your target clientele, you can then tailor your services and marketing efforts to meet their specific needs.

Study Competitors

Analyze the competition within your desired market. Research other nanny agencies and services in your area to understand their offerings, pricing, and advantages. Examine their marketing strategies and customer reviews to identify areas where you can differentiate your business.

  • What types of nanny services are they providing?
  • Which approaches to advertising and marketing are they using?
  • What are the competitor’s strengths and weaknesses?

Market Survey

Conduct a market survey to evaluate the demand for nanny services within your target region. Speak with potential clients and other industry professionals to understand their needs, preferences, and concerns. This feedback can help refine your service offerings and provide insight into potential pricing structures.

  • Conduct interviews or surveys with potential clients.
  • Identify existing and emerging trends affecting the childcare industry.
  • Assess the need for specific services or certifications.

Revenue Potential

Determine the possible revenue your nanny business can generate based on your market research. Set realistic goals and explore different revenue streams, such as full-time placements, part-time services, or temporary care. Calculate the startup costs associated with setting up the business, such as marketing, background checks, and insurance, and break-even projections.

  • Establish pricing based on market demand, competitor rates, and your costs.
  • Calculate expected costs, including background checks, advertising, and insurance.
  • Project revenue goals and break-even points.

Legal and Administrative Setup

Choose a Business Name

Before starting your nanny business, you’ll need to choose a suitable name. The name should be unique, catchy, and professional; it should represent your business and services in the best possible light. Keep the following points in mind when selecting a name:

  1. Research potential names to ensure they’re not already in use
  2. Check the availability of domain names for future website creation
  3. Consider incorporating keywords related to childcare or nanny services

Select a Legal Structure

It’s essential to decide on a legal structure for your nanny business. The choice will determine the taxes you’ll be responsible for, your liability protection and the registration process. Typical legal structures include:

  • Sole Proprietorship: This is the simplest business structure, making it easy to set up and manage. However, you’ll be personally accountable for the business’s debts and liabilities.
  • Partnership: If you’re starting the business with one or more partners, a partnership might be suitable. It can be set up as a general or limited partnership with respective liabilities.
  • Limited Liability Company (LLC): An LLC provides limited liability protection, which means your personal assets will be protected from business debts and claims. In addition, an LLC allows for flexible management and tax options.
Legal Structure Pros Cons
Sole Proprietor Easy setup and management Personal liability for debts and obligations
Partnership Shared management and responsibilities Partners are liable for each other’s actions
LLC Limited liability and tax flexibility More paperwork and initial setup costs

After choosing a legal structure, you’ll need to register your business with the appropriate state authorities. As part of the registration process, you’ll also need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is necessary for filing taxes and other administrative tasks, such as opening a business bank account.

By properly setting up your nanny agency as a legal entity and registering it with the necessary authorities, you’ll be off to a great start in establishing a successful business.

Location and Office Space

Rent or Home Office

When starting a nanny business, one of the first decisions you’ll need to make is whether to rent an office space or operate from a home office. Both options have their advantages and disadvantages.

Renting an office space provides a professional setting for interviews and meetings with potential nannies and clients. It also helps to establish credibility and trust among your customers. On the other hand, renting an office space can be expensive, and you may need to factor in additional costs like utility bills, furniture, and equipment.

Operating your nanny business from a home office can be more cost-effective, as you won’t have to pay for rent, and you likely already have furniture and equipment. However, having a home office might not be suitable if you have limited space or if it would be difficult to maintain a professional atmosphere for meetings and interviews.

Domain Availability

In today’s digital age, having a strong online presence is essential for any business, including a nanny agency. You’ll want to create a user-friendly website that showcases your services, highlights your nannies’ qualifications, and allows clients to easily contact you for inquiries.

To do this, you’ll need to secure a domain name that is easy to remember and relevant to your nanny business. Before you settle on a name for your agency, it is crucial to check domain availability. If your desired domain is unavailable, consider brainstorming alternative names or using domain extensions such as .net, .biz, or .co.

When choosing a domain name, keep the following tips in mind:

  • It should be easy to pronounce and spell.
  • Avoid using slang or abbreviations that might cause confusion.
  • Make it short, relevant, and memorable.

Overall, choosing the right location for your nanny business and ensuring your domain name’s availability are critical steps in establishing a successful agency. They contribute to a professional image and help attract clients to your services.

Licenses and Certifications

Register Business and Obtain Licenses

To start a nanny business, it’s essential to register your company and obtain the necessary licenses. Begin by registering the business with the Internal Revenue Service and applying for any local and state licenses required. Consult with an attorney or small business advisor to determine the appropriate corporate structure and any necessary insurance coverage for your nanny agency.

Nanny Training and Early Childhood Education

In order to ensure the high quality of your caregivers, it’s important to verify they have the appropriate nanny training and early childhood education credentials. Nannies should have completed at least the following requirements:

  • High school diploma or GED
  • 20 clock hours or 3 credit hours of childcare training from any reputable organization
  • 2000 hours (1 year) of childcare work experience

Additionally, certification from a professional organization such as the US Nanny Association can provide an added level of credibility. This certification implies that the caregiver has completed the necessary training, passed the National CPR proficiency exam, undergone a background check, and paid the required credential fee.

CPR and First Aid Certification

A key aspect of ensuring the safety and well-being of the children under a nanny’s care is holding a valid CPR and First Aid certification. This can be obtained through organizations such as the American Red Cross, which offers a Babysitting & Child Care Certification program.

When hiring caregivers for your nanny agency, it is essential to verify their CPR and First Aid certifications are up to date. This can not only help in emergency situations but also demonstrates professionalism and competence to the families utilizing your services.

Recruiting and Vetting Nannies

Conduct Background Checks

When starting a nanny business, one of the most crucial steps is conducting thorough background checks on potential nannies. It ensures that candidates have clean criminal records and are fit to work with children. Some aspects to include in the background check are:

  • A thorough criminal record check
  • Driving record examination
  • Verification of any childcare-related certifications

To maintain a reputable nanny agency, you should perform periodic updates on screenings to ensure that nothing has changed in a nanny’s background.

Verify Resumes and Professional Certifications

After conducting background checks, it’s important to verify the resumes and professional certifications of the candidates. Ask for valid copies of their qualifications and cross-check them with the issuing authorities. Some key things to verify are:

  • Work experience and references from previous employers
  • Childcare-related certifications, such as CPR and first aid
  • Educational qualifications, including any degrees or diplomas

By verifying these details, you ensure that the nannies in your agency have the necessary skills and experience to care for children professionally.

Identify Qualified Nannies

The final step in the recruiting and vetting process is identifying qualified nannies who are suitable for families using your services. You can do this through:

  1. One-on-one interviews: Asking both general questions about their experience and child care philosophies, as well as specific situational questions to assess their problem-solving abilities.
  2. Practical tests: Assessing their ability to handle common child care duties, such as meal preparation, diaper changing, and keeping children engaged with age-appropriate activities.
  3. Evaluating soft skills: Identifying nannies who exhibit strong communication, adaptability, and empathy.

Additionally, consider the types of nanny services you want to offer in your agency, such as full-time, part-time or on-demand nannies, and match qualified candidates accordingly. By employing a meticulous process to recruit and vet high-quality nannies, you will be well on your way to establishing a successful and professional nanny agency.

Services and Pricing

Types of Childcare Services Offered

As a nanny business, it is crucial to define the types of childcare services you will offer. The primary categories include:

  • Part-Time Nannies: These nannies work for a set number of hours per week, typically up to 20-30 hours.
  • Full-Time Nannies: Full-time nannies work 40 hours or more per week.
  • Live-In Nannies: These nannies live with the family, providing continuous childcare.
  • Temporary Nannies: Temporary nannies fill in for short-term needs, such as vacation or illness coverage.

Develop Fee Structure

When creating a fee structure, consider the following factors:

  1. Placement Fees: These are one-time fees charged to families for successful placement of a nanny. Placement fees can range from a flat rate to a percentage of the nanny’s annual salary.
  2. Agency Commission: You may choose to charge clients on an ongoing basis, typically a set percentage (e.g., 15%-25%) of the nanny’s hourly wage.
  3. Other Fees: Additional fees may include background checks, reference checks, or other services you provide.
Service Type Typical Fee Range
Placement Fee $1,500 – $3,000
Agency Commission 15% – 25%
Background Checks $50 – $100

Payment System

Setting up a clear and convenient payment system is essential for both your clients and nannies. Some options include:

  • Online Payments: Set up an online platform where parents can pay your fees and track their invoices. This approach makes it easy for families to manage their payments.
  • Direct Deposit: Encourage parents to set up direct deposit payments to their nannies, ensuring timely and secure compensation.
  • Invoicing: Issue invoices to clients regularly, either monthly, bi-weekly, or as agreed upon. Be sure to include a clear breakdown of the charges, including your commission fee.

Remember to focus on offering various childcare services to cater to different family needs, develop a competitive fee structure, and implement a convenient payment system to run a successful nanny business.

Marketing and Advertising

Create a Website

Having a professional website is crucial for your nanny business. Make sure the website has the essential information about your services, background, and qualifications. It should also include contact details (email address, phone number, and physical address) to make it easy for potential clients to reach out.

Leverage Social Media

Using social media can help you connect with potential clients and promote your nanny services. Some platforms to consider using are Facebook, Instagram, and Twitter. Create profiles on these platforms and share content that showcases your expertise, testimonials from satisfied clients, and information about your services.

Develop Marketing Plan

A comprehensive marketing plan can help you reach your target audience more effectively. Some ideas to consider for your plan include:

  • Handing out business cards at local community centers, parks, or mom’s groups.
  • Placing ads in local newspapers or online classified websites like Craigslist.
  • Joining online forums or local community groups related to child care.

Build Partnerships with Local Schools

Partnering with local schools can help you gain access to their networks and reach more potential clients. Here are some ideas to build such partnerships:

  • Offer or sponsor workshops or educational activities for parents.
  • Advertise your services in school newsletters or on their websites.
  • Collaborate with local teachers or school staff, offering discounts or incentives for their referrals.

By implementing these marketing and advertising strategies, you can effectively reach your target audience, build your brand awareness, and establish your nanny business within your local community.

Insurance and Financial Management

Purchase Necessary Insurance Policies

When starting a nanny business, it’s essential to purchase the proper insurance policies to protect your company and employees. General liability insurance typically costs anywhere from $300 to $1,400 annually, while professional liability averages $900 annually1. It can be challenging to find insurance for a nanny business, but comparing quotes from different carriers can help you find suitable coverage options.

Set Up Accounting System

A reliable accounting system is crucial when starting a nanny business. By setting up a structured accounting system, you’ll be able to:

  • Track your income and expenses
  • Monitor your business’s financial performance
  • Make informed financial decisions

Consider using accounting software or working with a professional accountant to help you maintain accurate financial records.

Understand Tax Responsibilities

Registering your nanny agency with the Internal Revenue Service is a necessary step when starting your business2. It’s also essential to be aware of the taxes applicable to your company, such as:

  • Income taxes
  • Payroll taxes
  • Sales taxes (if applicable)

Open a business bank account to separate your personal finances from your business transactions, which will make it easier to manage your taxes and accounting3. Consult with a tax professional to ensure compliance with all tax regulations and avoid potential fines or penalties.

International Nanny Association Membership

The International Nanny Association (INA) is a professional organization that offers support and resources for nanny entrepreneurs, professionals, and businesses in the childcare industry. Gaining membership with the INA can be beneficial for those starting a nanny business or looking to enhance their current operations.

Benefits of Professional Membership

Joining the International Nanny Association comes with several advantages that can help you grow your business and stay current in the childcare industry. Some of these benefits include:

  • Access to valuable resources: As a member, you’ll have access to various resources, such as guidelines for best practices, childcare industry news, and valuable tools relevant to your nanny business.
  • Networking opportunities: Membership offers opportunities to network with other professionals in the childcare industry. INA hosts events such as conferences and workshops, where you can connect with like-minded professionals, share ideas, and learn about the latest trends in the field.
  • Job postings: INA provides a platform for business members to post job openings and access potential candidates, streamlining the hiring process for your nanny business.
  • Training and education: INA offers ongoing professional development courses and educational materials to help you enhance your skills and stay up-to-date on industry trends.
  • Credibility: Affiliation with the International Nanny Association adds credibility to your business, demonstrating your commitment to maintaining a high standard of care and professionalism in your services.

Considering the benefits and support offered by the International Nanny Association, it is worth considering becoming a member as you start or expand your nanny business. Learn more about the application process, membership fees, and member resources on their official website.

Growing Your Nanny Business

Continually Evaluate and Adjust Plans

Having a solid plan is crucial when starting your nanny business, but it’s essential to know that a business is an ever-evolving entity. Keep track of changes in the market, evaluate your performance, and adjust your plans accordingly. This will ensure that you are always heading in the right direction and able to respond effectively to new challenges and opportunities. Here are some ways to evaluate and adjust your plans:

  • Monitor your market and competition: Keep an eye on the latest trends in the nanny and daycare center industry, and analyze your competitors’ strategies to identify new business ideas or improvements needed in your own performance.
  • Solicit feedback from clients: Regularly ask for feedback and reviews from clients to improve your services, identify areas for growth, and maintain high levels of satisfaction.
  • Conduct periodic reviews: Set up regular review meetings to assess your business’s financial health, operational efficiency, and progress toward achieving your objectives.

Offer Incentives and Special Programs

Creating a loyal customer base and attracting new clients requires offering unique and appealing incentives and special programs. By doing so, your nanny business can thrive, resulting in a more profitable and sustainable venture. Consider implementing the following incentives and programs:

  • Customer referral program: Reward your existing clients for referring new families to your nanny services. This can be done by providing discounts, free services, or exclusive offers.
  • Loyalty rewards: Offer a points-based system or tiered rewards structure that allows clients to earn rewards or discounts as they utilize your services over time. This can help create a sense of loyalty and encourage repeat business.
  • Special offers and promotions: Run limited-time promotions, such as holiday discounts or family package deals, to help entice new clients to choose your nanny services over competitors.
  • Additional services: Diversify your offerings by providing additional services, such as babysitting, housekeeping, or tutoring, to cater to the varied needs of clients.

By putting in continuous effort, passion, and smart decision-making, your nanny business can experience significant growth and continue to be a rewarding and profitable endeavor.


  1. Babysitting & Nanny Insurance: Cost, Coverage & Providers. Retrieved from
  2. How to Start a Nanny Business: 9 Steps (with Pictures) – wikiHow. Retrieved from
  3. How to Start a Nanny Referral Agency | TRUiC. Retrieved from