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

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Starting a Preschool in Minnesota typically costs between $49,000 and $392,000, with a median estimate of $147,000. Minnesota’s cost of living is 2% 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: March 2026

Preschool startup costs illustration — typical equipment and setup

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

Low

$49,000

Medium

$147,000

High

$392,000

National average: $50,000 – $400,000

Interactive Startup Cost Calculator

Startup Cost Calculator

Preschool in Minnesota

Budget:

Classroom Space Lease & Build-Out

$58,800

Curriculum & Educational Materials

$9,800

Classroom Furniture & Equipment

$14,700

Licensing & Accreditation

$4,900

Staff Hiring & Training

$14,700

Insurance

$6,860

Marketing & Enrollment Campaign

$3,920

Working Capital Reserve

$29,400

Options

Include 3 months working capital

Employees:Just Me1–34–10

One-Time Costs

$143,080

Monthly Costs

First Year Total

$143,080

Full Cost Breakdown

Cost Category	Low	Medium	High	Notes
Classroom Space Lease & Build-Out	$14,700	$58,800	$196,000	Preschools often share space with churches or community centers, reducing build-out costs significantly.
Curriculum & Educational Materials	$2,940	$9,800	$29,400	HighScope, Creative Curriculum, and Reggio Emilia materials run $2,000-$5,000 per classroom setup.
Classroom Furniture & Equipment	$4,900	$14,700	$39,200	Budget $3,000-$8,000 per classroom for complete furniture sets. Invest in quality — preschool furniture lasts 15-20 years.
Licensing & Accreditation	$980	$4,900	$14,700	NAEYC accreditation ($2,500-$5,000 to pursue) significantly increases enrollment and allows premium pricing.
Staff Hiring & Training	$4,900	$14,700	$39,200	Most states require lead preschool teachers to have at least an associate's degree in early childhood education.
Insurance	$1,960	$6,860	$19,600	Preschools require the same specialized insurance as daycare centers including abuse/neglect liability coverage.
Marketing & Enrollment Campaign	$980	$3,920	$11,760	Open house tours are the most effective preschool enrollment strategy. Hold 3-5 open houses before opening.
Working Capital Reserve	$9,800	$29,400	$78,400	Preschools fill enrollment in waves — most families enroll in September for the academic year.
Total Startup Cost	$41,160	$143,080	$428,260	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: $100-$800 • Renewal: Annual
Residential Building Contractor License — Minnesota Department of Labor and Industry
Cost: $150-$500 • Renewal: Annual
Cosmetology Salon License — Minnesota Department of Labor and Industry — Board of Cosmetologist Examiners
Cost: $50-$150 • Renewal: Annual
Real Estate Broker License — Minnesota Department of Commerce — Real Estate
Cost: $150-$400 • Renewal: Annual
Child Care Center License — Minnesota Department of Human Services — Child Care Licensing
Cost: $50-$200 • Renewal: Annual
On-Sale Intoxicating Liquor License — Minnesota Department of Public Safety — Alcohol and Gambling Enforcement or Local Authority
Cost: $300-$3,000 • Renewal: Annual
Cannabis Retailer License — Minnesota Office of Cannabis Management
Cost: $2,500-$10,000 • Renewal: Annual
Pesticide Business License — Minnesota Department of Agriculture
Cost: $50-$200 • 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 close to the national average for Preschool startup costs, with a cost-of-living index of 98. Compared to neighboring Wisconsin ($142,500 median startup cost), Minnesota has higher costs for a Preschool.

State	Est. Cost	LLC Fee
Minnesota (current)	$147,000	$155
Wisconsin	$142,500	$130
Iowa	$136,500	$50
South Dakota	$145,500	$150
North Dakota	$148,500	$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 charge 20-30% more 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 ($5,000–$12,000/year)
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 costs $50,000 to $400,000. A small preschool using shared church or community center space can launch for $50,000-$100,000. A dedicated preschool facility for 40-60 students with its own space and outdoor area typically costs $150,000-$350,000.

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 ranges from $500-$2,500/month depending on location, hours, and program quality. NAEYC-accredited programs in affluent areas charge $1,500-$2,500/month. Part-day programs (3 hours, 3 days/week) charge $300-$800/month. Full-day programs command premium rates.

Franchises like The Learning Experience, Goddard School, and Kiddie Academy provide curriculum, training, and brand recognition at the cost of $150,000-$500,000 franchise fees and ongoing royalties (7-10% of revenue). Independent programs offer curriculum flexibility and no royalties, but require more development time.

A 2-classroom preschool with 20 students per class at $1,000/month tuition grosses $480,000/year. After teacher salaries (3-4 teachers at $35,000-$50,000 each), rent, and overhead, net margins of 10-20% require 85%+ 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.