How to Start an Adult Daycare: Complete Step-by-Step Guide

​The U.S. is at a demographic turning point. As baby boomers age and lifespans increase, the need for affordable, high-quality senior care solutions is skyrocketing. Adult daycare centers are one of the most cost-effective long-term care options, providing daytime support for seniors while allowing them to live at home and remain active in their communities.

For entrepreneurs, healthcare providers, and mission-driven leaders, starting an adult daycare center offers both a business opportunity and the chance to make a lasting community impact. The key is to start with a clear business plan, strong community connections, and operational excellence. Whether you’re a first-time entrepreneur or an experienced care provider, this step-by-step guide will walk you through how to start an adult daycare and set it up for long-term success.

Assessing the Demand for Adult Daycare in Your Area

Before you invest, determine if your area has enough demand to sustain your program.

Research local demographics – Review census data for the number of adults 65+ in your area.

Look at Medicaid and veteran populations – Many states offer Medicaid waiver programs or VA benefits that cover adult daycare.

Identify service gaps – Even in areas with existing centers, you may find unmet needs—such as dementia care, bilingual staff, or transportation. Our guide on Bridging Adult Daycare Gaps explores how to identify and address these opportunities.

Pro tip: Speak directly with caregivers, hospital discharge planners, and social workers. Their feedback can reveal opportunities that data alone won’t show.

​Creating an Adult Daycare Business Plan That Works

Your adult daycare business plan should clearly outline the following:

Service offerings – Personal care, medication management, meals, transportation, therapy, enrichment activities. Consider how technology can enhance these areas - see our Technology Tips to Streamline Adult Daycare Operations.

Target audience – Seniors with Alzheimer’s, veterans, or the general aging population.

Business structure – For-profit or non-profit (non-profits can access grants and philanthropic support).

Revenue streams – Private pay, Medicaid, VA benefits, long-term care insurance, local contracts.

Pro tip: Build multiple funding streams from the start so you’re not dependent on one source of income.

​Budgeting and Funding Your Adult Daycare Program

Budgeting is where your business plan becomes reality.

Startup costs might include:

Renovations for ADA compliance

Licensing fees and inspections

Furniture, activity supplies, kitchen equipment

Marketing and website setup

Ongoing costs typically include:

Staff salaries and benefits

Insurance and utilities

Food and transportation

Activity and therapy supplies

Funding sources to explore:

Medicaid waiver programs (varies by state) — see Medicaid, VA Benefits & More: Navigating Funding for Adult Daycare for an in-depth look at funding options.

Veterans Affairs benefits

Grants for senior services

Local partnerships with hospitals, rehab centers, or nonprofits

Pro tip: Tools like the Modeliks Adult Daycare Financial Model can help forecast cash flow and profitability.

​Navigating Adult Daycare Licensing and Compliance

Licensing requirements vary by state but generally cover:

Safety standards – Fire exits, sanitation, accessibility.

Staff qualifications – Background checks, CPR/first aid, dementia training.

Participant-to-staff ratios – Often set by state law.

Care plan requirements – Individualized plans for each participant. For memory care programs, see our guide on How to Build Effective Alzheimer’s & Dementia Programs.

​Quick Licensing Checklist:

Request an application packet from your state licensing office

Prepare facility layout and floor plan

Complete staff background checks

Schedule fire/safety inspections

Submit application with fee

Pro tip: Make compliance part of your brand—it builds trust with families and referral partners.

​Building Awareness and Marketing Your Adult Daycare

Even the best center won’t succeed without visibility.

Marketing and outreach ideas:

Partner with local hospitals, senior housing, and caregiver support groups.

Host open houses, health fairs, or caregiver workshops.

Share success stories (with permission) on social media.

Create a professional, easy-to-navigate website with clear enrollment steps.

​Our post How to Encourage Adult Daycare Participation is a great companion to the ideas listed above.

​Hiring and Training the Right Staff

Your staff is your biggest asset.

Hire for both skills and dedication—compassion, patience, and communication are as important as credentials.

Provide ongoing training in dementia care, fall prevention, and cultural sensitivity.

Support staff well-being to reduce turnover and maintain a positive environment.

Measuring Success and Adapting

Once you’re open, track key metrics — our post on How Data-Driven Decisions Can Improve Adult Daycare Operations demonstrates how to turn numbers into actionable improvements:

Enrollment and attendance rates

Caregiver satisfaction surveys

Participant health and engagement outcomes

Average length of participant enrollment

Number of referrals from current families

Regularly review this data and adjust your programming, marketing, or staffing to stay competitive and relevant.

​Now Is the Time to Start an Adult Daycare

Launching an adult daycare is more than starting a business—it’s creating a community hub of care, connection, and dignity. By combining thoughtful planning, sustainable funding, regulatory compliance, and genuine outreach, you can build a center that changes lives and thrives for years to come.

With the senior care crisis looming, the demand is growing every day. The sooner you start, the sooner you can make a difference for families who need you most.