Starting a daycare business in Indiana can be a lucrative endeavor, and it’s a great way to turn your passion for working with children into a profitable business. Before you get your daycare business off the ground and running smoothly, there are important steps you need to take to obtain the proper licenses.

Starting a daycare in Indiana requires careful planning and an understanding of state licensing requirements depending on the type of center you plan to operate.

This guide will help you understand Indiana’s licensing requirements and the steps to take to apply for a childcare license.

Do I need a childcare license in Indiana?

In Indiana, you need a childcare license if your facility has more than six children, and you get regular compensation based on the number of hours of care. The following are examples of licensure-exempt programs:

• Providing care for less than six children
• Providing care without regular compensation
• Caring for your children or your relatives
• Programs serving migrant children
• Programs primarily providing school-age children with social, recreational, or religious activities, such as scouting, sports, and the arts
• Programs where children are in grades kindergarten through 12 and are operated by the education department or a public or private school
• Non-residential programs providing child care for less than four hours a day
• A recreation program for children that operates for not more than 90 days in a calendar year

The Office of Early Childhood and Out-of-School Learning under the Indiana Family and Social Services Administration facilitates the licensing regulations for childcare providers.

The Office of Early Childhood and Out-of-School Learning oversees early childcare, out-of-school-time programs, and education. The entity’s vision is to ensure each Indiana community has a robust network of early care and out-of-school-time activities that support children, families, and local schools.

The Division regulates three programs: child care centers, child care homes, and child care ministries. 

• A child care center is a nonresidential building where at least one child receives child care from a provider for more than four hours but less than twenty-four hours daily.
• A child care home is a residential structure where at least six children receive care, excluding the provider's or relatives' children, for more than four hours but less than twenty-four hours daily. There are two types of childcare homes—class I and II child care homes.
• A childcare ministry operates under a church or religious organization and is exempt from licensing.

A class I child care home cares for both full-time and part-time children, not exceeding at any time 12 plus three children enrolled in at least full-day kindergarten. On the other hand, a class II child care home cares for more than 12 children but not more than any combination of 16 full-time and part-time children at any time.

The division issues three types of licenses, i.e., regular, provisional, and probationary. Regular licenses are valid for two years and are issued when one complies with all the requirements. Provisional licenses are valid for one year and issued when the facility doesn’t fully comply with the regulations because it’s not in full operation. A probationary license is issued when the applicant can’t comply with a rule. It’s valid for not more than six months, but the division may extend it for one year.

The division charges the following fees for child care license application:

• Child care center license: $2 per licensed child capacity
• Child care center new inquiry application packet: $5
• Child care home license new inquiry application packet: $5
• Child care home annual inspection: $25

Childcare licensing requirements in Indiana

Before starting a daycare center, you’ll need an understanding of the licensing regulations in your area. Indiana state law mandates the following licensing requirements for child care centers and child care homes.

Child care center licensing requirements

• New building construction needs a new plan released from the Department of Fire and Building Services (DFBS) and the Indiana State Department of Health (ISDH) before construction and licensing
• A written nutrition and food service plan and a two-week menu is needed for the division’s approval before and after licensure
• A completed application, which includes all the required written documentation
• A health program form
• The center’s building must undergo and pass on-site inspections before licensure
• The childcare center’s attendance cannot exceed approved capacity limits
• The childcare center cannot operate where the prevailing conditions could pose injuries to children
• The childcare center can only provide care to children whose age is approved by the DFBS and the division
• The center must meet local zoning requirements

Provider requirements

Director qualifications:

• Must be at least 21 years old
• Must meet one of the following minimum education and experience qualifications: A bachelor of arts or a bachelor of science degree from an accredited college or university in early childhood education or elementary education with a kindergarten endorsement and grades of C or better or two-year associate’s degree in early childhood education from an accredited college or university, with a grade of C or better and a minimum of three years of experience in an early childhood program

Lead caregiver qualifications:

• Must have at least one of the following: A current Child Development Associate (CDA) credential, a bachelor of arts or bachelor of science degree in early childhood education or elementary education with a kindergarten endorsement and grades of C or better from an accredited college or university, or a bachelor of arts or bachelor of science degree from an accredited college or university
• Have eight hours of additional in-service training per year appropriate to the age group with which the caregiver is working
• Provide documentation showing successful completion of at least six credit hours annually

Caregiver qualifications:

• Must be at least 18 years old
• Must have a high school diploma or have passed an equivalency test
• Must have reading skills to read vital information like emergency information, prescription labels, first aid and emergency evacuation directives, menus, medical information, special dietary information, and intake information on children
• Must have writing skills to document information like accident reports and significant occurrences

Support staff:

• Are exempt from educational requirements
• Must complete orientation and ongoing training
• Must meet all the qualifications of the caregiver if counted in the staff-to-child ratios

Substitutes:

• Must meet the minimum caregiver qualifications above

Capacity and ratio requirements

Child:staff ratios for licensed child care centers

Child care home licensing requirements

Here are the requirements to meet before applying for a license:

• A record of annual x-ray or Mantoux tuberculin tests of direct childcare providers to show that they’re tuberculosis-free
• Criminal history checks documentation on volunteers, employees, and other household members aged 18 years and above
• Certification in a current first aid course, annual CPR certification, and training in “Universal Precautions”
• A statement regarding every child’s general health within 30 days of admission
• Release for each child’s emergency medical care signed by the child’s legal guardian or parent
• Daily attendance documentation for children staying in the childcare home should be maintained at the site for at least two years
• A written statement of the applicant’s discipline policy bearing the signature of the child’s legal guardian or parent
• A childcare home’s documented evacuation plan in case of an emergency

Caregiver requirements

All caregivers must:

• Be 18 years or older

• Work under the caregiver’s direct supervision if working as an assistant
• Be 21 years or older if taking care of infants
• Have a high school diploma or its equivalent

• Menus
• Special dietary information
• Prescription labels
• Emergency information
• Medical information
• Children’s intake information

• Feeding and diapering information
• Accident reports and other critical occurrences
• Medical prescriptions
• Children’s developmental progress

As the licensee, you can only be a caregiver for one child care home. To operate more than one child care home, you must maintain or hire a caregiver for each additional child care home.

An assistant caregiver must work under the caregiver’s direct supervision. If the assistant caregiver is below 21 years and left in charge of the facility, families must receive written notification. Volunteers and student assistants shall work under the caregiver’s direct supervision and cannot be left in charge of the childcare home.

Capacity and ratio requirements

Birth to 24 months:

• One teacher for six infants (1:6) 
• Of the six children, two should be 16+ months old and walking; otherwise, 1:4 is the required ratio

Birth to 6 years:

• One teacher for 10 children (1:10). No more than three children may be below 16 months old and walking

3 years to 10 years:

• One teacher for 12 children (1:12)

All ages:

• One teacher for 12 children (1:12) 
• A child care home’s maximum capacity is 12 children in addition to three children during the school year enrolled in first grade

Here is more information about staff-to-child ratios.

Childcare license application in Indiana

To become a licensed childcare provider in Indiana, follow the below application process.

Becoming a licensed child care center provider:

Step 1: Complete orientation 1

This training is for childcare providers and entails the start-up process and other essential information. Access the training via Indiana Learning Paths at I-LEAD. You’ll need to create an account on this platform.

Step 2: Complete orientation 2

This training focuses on childcare centers, specifically licensure preparation. Visit Indiana Learning Paths at I-LEAD to access the training.

Step 3: Submit the online application via I-LEAD

You must apply using the division’s recommended forms. Contact your regional office for an application packet. Other forms can be found here. You must also submit the following information with your application:

• Business permit or license to operate a child care center or a statement from the local authorities that a business permit or license is not required
• A current and valid electronic mail address
• A statement attesting you haven’t been convicted of a felony or a misdemeanor related to child care

Step 4: Onsite inspection 

Prepare for and pass the onsite inspection from the Office of Early Childhood and Out-of-School Learning. 

Step 5: License recommendation submission

A license recommendation will be submitted to the central office for further review and approval. Depending on your requirements, they’ll issue the relevant license (regular, provisional, or probationary).

Becoming a licensed child care home provider:

To become a licensed child care home provider in Indiana, you must:

Step 1: Complete orientation 1

This training covers the start-up process and other useful information. To find this training, visit Indiana Learning Paths at I-LEAD.

Step 2: Complete orientation 2

This training is tailored to the needs of child care home providers, helping them prepare for licensing. Go to Indiana Learning Paths at I-LEAD to access the training.

Step 3: Submit the online application via I-LEAD

You must apply using the division’s recommended forms. Contact your regional office for an application packet. You’ll find other relevant forms here. You must also submit the following information with your application:

• Business permit or license to operate a child care center or a statement from the local authorities that a business permit or license is not required
• A current and valid electronic mail address
• A statement attesting you haven’t been convicted of a felony or a misdemeanor related to child care

Step 4: Onsite inspection 

A licensing consultant from the Office of Early Childhood and Out-of-School Learning will conduct an onsite inspection of the home. 

Step 5: License recommendation submission

A license recommendation will be submitted to the central office for further review and approval. Depending on your requirements, they’ll issue the relevant license (regular, provisional, or probationary).

Securing the appropriate childcare license for your center is one of the first steps to starting your business. After you’ve navigated the licensing regulations, you’re ready to write your business plan and pick a memorable name for your daycare center. 

Whether you’re opening a center-based program or starting a preschool at home, you’ll need to determine your marketing strategies and set up organized systems to manage your daily operations. A tool like brightwheel’s center management feature can simplify your administrative tasks by streamlining your enrollment process, record keeping, and reporting. Save time on your day-to-day tasks, stay organized, and operate with ease.

How to stay compliant with a daycare license in Indiana

After getting a daycare license in Indiana, you must stay compliant by passing regular inspections from the division. The childcare center must provide the division access to the center’s premises, records, children in care, and personnel.

Your business must also use a valid license and maintain your business address, name, and ownership. The current regular license expires after two years. Modifying your business address and name and changing ownership, capacity, and children’s age means you must apply for a new license to stay compliant. 

To apply for a new license, you must submit a new application within 60 days before the current license expires on forms prescribed by the division. Contact your regional office for the relevant license application forms.

Funding resources for your childcare business

As you go through the licensing process, you may come across grants or other funding resources that can help fund your childcare business. A grant is an often overlooked financial resource given by a government agency or private foundation that does not need to be repaid. This makes them an attractive funding option if you are looking to expand or enhance the quality and accessibility of your program.

Grants provide funding that can be used towards a variety of purposes, such as improving facilities, purchasing new equipment or materials, or offering professional development opportunities for staff. The available resources vary by state so it is crucial to research and understand the grants for childcare providers in Indiana to make informed decisions about which ones to apply for.

Start your daycare business in Indiana

A childcare license is necessary to own and operate a daycare business in Indiana. Depending on the specifics of your business, you’ll need to apply for the correct type of license and meet all the requirements in order to provide care to children. With careful planning and preparation, you can complete this necessary first step and continue onto the next phase of growing your business.

Brightwheel is the complete solution for early education providers, enabling you to streamline your center’s operations and build a stand-out reputation. Brightwheel connects the most critical aspects of running your center—including sign in and out, parent communications, tuition billing, and licensing and compliance—in one easy-to-use tool, along with providing best-in-class customer support and coaching. Brightwheel is trusted by thousands of early education centers and millions of parents. Learn more at mybrightwheel.com.