How Much Does It Cost to Start a Preschool in Minnesota?

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Starting a Preschool in Minnesota typically costs between $47,000 and $376,000, with a median estimate of $141,000. Minnesota’s cost of living is 6% below the national average, which helps reduce operating expenses like commercial rent and labor. LLC formation in Minnesota costs $155 to file. Most preschool businesses take 6-12 months to launch.

Last updated: May 2026

Preschool startup costs illustration — typical equipment and setup

How Much Does It Cost to Start a Preschool in Minnesota?

Low

$47,000

Medium

$141,000

High

$376,000

National average: $50,000 – $400,000

Interactive Startup Cost Calculator

Startup Cost Calculator

Preschool in Minnesota

Budget:

Classroom Space Lease & Build-Out

$56,400

Curriculum & Educational Materials

$9,400

Classroom Furniture & Equipment

$14,100

Licensing & Accreditation

$4,700

Staff Hiring & Training

$14,100

Insurance

$6,580

Marketing & Enrollment Campaign

$3,760

Working Capital Reserve

$28,200

Options

Include 3 months working capital (+$56,400)

Employees:Just Me1–34–10

Startup Costs

$137,240

Monthly Costs

$18,800

First Year Total

$362,840

Full Cost Breakdown

Cost Category	Low	Medium	High	Notes
Classroom Space Lease & Build-Out	$14,100	$56,400	$188,000	Preschools often share space with churches or community centers, reducing build-out costs significantly.
Curriculum & Educational Materials	$2,820	$9,400	$28,200	HighScope, Creative Curriculum, and Reggio Emilia materials are a meaningful four-figure capital cost per classroom setup, with annual replenishment for consumables on top.
Classroom Furniture & Equipment	$4,700	$14,100	$37,600	Plan a meaningful four-figure budget per classroom for complete furniture sets. Invest in quality — preschool furniture lasts well over a decade with proper care.
Licensing & Accreditation	$940	$4,700	$14,100	NAEYC accreditation (https://www.naeyc.org/accreditation) is a meaningful four-figure investment to pursue and significantly increases enrollment and tuition pricing power once earned.
Staff Hiring & Training	$4,700	$14,100	$37,600	Most states require lead preschool teachers to have at least an associate's degree in early childhood education.
Insurance	$1,880	$6,580	$18,800	Preschools require the same specialized insurance as daycare centers including abuse/neglect liability coverage.
Marketing & Enrollment Campaign	$940	$3,760	$11,280	Open house tours are the most effective preschool enrollment strategy. Hold 3-5 open houses before opening.
Working Capital Reserve	$9,400	$28,200	$75,200	Preschools fill enrollment in waves — most families enroll in September for the academic year.
Total Startup Cost	$39,480	$137,240	$410,780	Required costs only

Licenses & Permits in Minnesota

General Business License

Minnesota does not have a statewide general business license. Businesses must register their entity with the Minnesota Secretary of State and register with the Minnesota Department of Revenue for sales and use tax and withholding tax purposes. Some Minnesota cities require local business licenses, though this varies by municipality. Minneapolis and Saint Paul have their own business licensing requirements. Many business types are regulated through specific licensing programs at the state level.

Industry-Specific Licenses

Food Handler License — Minnesota Department of Agriculture or Local Health Department
Cost: Varies — contact agency • Renewal: Annual
Residential Building Contractor License — Minnesota Department of Labor and Industry
Cost: Varies — contact agency • Renewal: Annual
Cosmetology Salon License — Minnesota Department of Labor and Industry — Board of Cosmetologist Examiners
Cost: Varies — contact agency • Renewal: Annual
Real Estate Broker License — Minnesota Department of Commerce — Real Estate
Cost: Varies — contact agency • Renewal: Annual
Child Care Center License — Minnesota Department of Human Services — Child Care Licensing
Cost: Varies — contact agency • Renewal: Annual
On-Sale Intoxicating Liquor License — Minnesota Department of Public Safety — Alcohol and Gambling Enforcement or Local Authority
Cost: Varies — contact agency • Renewal: Annual
Cannabis Retailer License — Minnesota Office of Cannabis Management
Cost: Varies — contact agency • Renewal: Annual
Pesticide Business License — Minnesota Department of Agriculture
Cost: Varies — contact agency • Renewal: Annual

Home-Based Business Rules

Minnesota municipalities regulate home-based businesses through local zoning ordinances. Minneapolis allows home occupations in all residential zones with restrictions on customer visits, signage, and deliveries. Saint Paul has similar home occupation rules. Minnesota's rural areas are generally very accommodating of home-based businesses. The state's Cottage Food Law specifically supports home-based food production and direct consumer sales.

Resources

Monthly Operating Costs

After launch, plan for these ongoing monthly expenses for your Preschool:

Low

$7,000/mo

Medium

$20,000/mo

High

$50,000/mo

Revenue Potential

Annual Revenue Range

$100,000 – $800,000 (annual)

Profit Margins

10-20%

Break-Even Timeline

18-30 months

How Minnesota Compares to Neighboring States

Minnesota is one of the more affordable states for launching a Preschool, with a cost-of-living index of 93.6 (national average is 100). Compared to neighboring Wisconsin ($136,500 median startup cost), Minnesota has higher costs for a Preschool.

State	Est. Cost	LLC Fee
Minnesota (current)	$141,000	$155
Wisconsin	$136,500	$130
Iowa	$124,500	$50
South Dakota	$124,500	$150
North Dakota	$123,000	$135

Common Mistakes to Avoid

1
Launching mid-year instead of September — most families commit to preschool before the school year starts
2
Not pursuing NAEYC accreditation — accredited programs command a meaningful tuition premium and have waitlists
3
Underestimating teacher qualifications required — state regulations specify minimum education requirements
4
Not understanding your state's preschool subsidy programs — accepting subsidies increases enrollment significantly
5
Ignoring family communication tools — parents pay premium tuition and expect regular updates on their child

Next Steps to Launch Your Preschool

1
Obtain a Minnesota preschool or early childhood education facility license from the Minnesota Department of Education or DCFS
2
Register your Preschool as an LLC with the Minnesota Secretary of State ($155 filing fee)
3
Ensure all lead teachers hold a Minnesota-recognized Early Childhood Education (ECE) credential or degree
4
Pass the Minnesota fire marshal and health department inspections for your preschool facility
5
Complete criminal background checks for all staff and volunteers per Minnesota childcare licensing requirements
6
Get childcare-specific liability insurance and commercial property coverage; premiums scale with enrollment capacity
7
Develop your curriculum framework — choose from play-based, Montessori, Reggio Emilia, or structured academic approach
8
Enroll in the USDA CACFP (Child and Adult Care Food Program) to receive reimbursement for qualifying meals

Frequently Asked Questions

Starting a preschool spans a wide range. A small preschool using shared church or community center space can launch in the high five to low six figures. A dedicated preschool facility for several dozen students with its own space and outdoor area requires meaningfully more — well into the mid-six figures. Use the calculator on this page to model your specific scenario.

Most states require lead preschool teachers to have an associate's or bachelor's degree in early childhood education, plus a state teaching certificate or Child Development Associate (CDA) credential. Requirements vary by state. Aides typically need 18+ hours of early childhood education coursework.

Private preschool tuition varies materially by location, hours, and program quality. NAEYC-accredited programs in affluent areas command premium monthly tuition. Part-day programs (a few hours, a few days per week) are priced meaningfully lower than full-day programs.

Franchises like The Learning Experience, Goddard School, and Kiddie Academy provide curriculum, training, and brand recognition at the cost of substantial six-figure franchise fees plus ongoing royalties as a percentage of revenue. Independent programs offer curriculum flexibility and no royalties, but require more development time.

A multi-classroom preschool at standard ratio caps grosses meaningful annual tuition revenue at full enrollment. After teacher salaries (the bulk of expense), rent, and overhead, low-double-digit percentage margins require maintaining high enrollment. The key is maintaining a waitlist to fill departing students immediately.

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Start a Preschool in Other States

See the national overview for Preschool or browse all businesses you can start in Minnesota.