How much does it cost to open a preschool?

Opening a licensed preschool costs $80,000 to $300,000 depending on facility size, location, and renovation requirements. The largest expenses are the facility lease and build-out to meet state licensing standards, followed by working capital to cover staff payroll during the enrollment ramp-up period. Church-based or shared-space preschools can launch for significantly less.

What are the licensing requirements for a preschool?

Preschool licensing requirements vary by state but typically include minimum square footage per child (35-50 sq ft indoors), staff-to-child ratios (1:8 to 1:12 for preschool age), teacher credential requirements, facility safety inspections, and background checks for all employees. The licensing process takes 3 to 9 months from initial application to approval.

How many students does a preschool need to be profitable?

A standalone preschool typically needs 40 to 60 enrolled students to reach profitability, depending on tuition rates and operating costs. At average tuition of $800 to $1,500 per month, a preschool with 50 students generates $40,000 to $75,000 in monthly revenue. Most preschools reach breakeven enrollment within 12 to 18 months of opening.

Preschool Startup Cost Comparison

Salt Lake City, UT vs Houston, TX

Salt Lake City, UT

$72,000 - $284,000

COL Index: 107.5

Houston, TX

$71,000 - $278,000

COL Index: 96.5

Detailed Cost Comparison

Expense	Salt Lake City, UT	Houston, TX	Difference
Business Registration & Licensing	$1,400 - $6,100	$1,900 - $6,200	-7%
Facility Lease (First + Last + Security)	$12,200 - $60,900	$13,700 - $68,500	-11%
Facility Build-Out & Renovation	$15,300 - $61,200	$13,800 - $55,200	+11%
Furniture, Equipment & Learning Materials	$10,000 - $35,000	$10,000 - $35,000	Same
Safety & Health Compliance	$5,000 - $20,000	$5,000 - $20,000	Same
Business Insurance (Annual)	$4,000 - $15,000	$4,000 - $15,000	Same
Marketing & Enrollment	$3,000 - $10,000	$3,000 - $10,000	Same
Working Capital (3-6 Months)	$21,500 - $75,300	$19,300 - $67,600	+11%
Total Estimated Cost	$72,000 - $284,000	$71,000 - $278,000	+2%

Local Market Factors

Factor	Salt Lake City	Houston
Cost of Living Index	107.5	96.5
Commercial Rent ($/sqft/yr)	$16 - $40	$18 - $45
Labor Rate Index	1.02	0.92
Sales Tax	7.75%	8.25%
Minimum Wage	$7.25/hr	$7.25/hr
LLC Filing Fee	$54	$300

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