Updated June 28, 2020:

Nanny Business - Overview

Wondering how to start a nanny agency? Nannies offer child care service in the home of the family rather than in a daycare center. It's a popular alternative for many reasons. Finding a nanny is hard work for parents. They don't have the time to find a nanny that is reliable, honest, and focused on the children. Your nanny agency takes on the job of interviewing, screening, and finding the perfect nanny for the family.

Creating a nanny referral agency means you are taking on the responsibility for looking into the background of applicants, their previous experience, and checking references.

Who Should Enter Into This Kind of Business?

This business works for those who like to spend time on a computer and doing research. They also should enjoy making connections and interacting with people on a daily basis.

What Happens On a Day-to-Day Basis at a Nanny Referral Agency?

This is a hands-on type of business. You'll be doing a lot of things on a daily basis that will keep you busy. A typical day will include the following activities:

  • Interview families to determine their needs and expectations.
  • Look into the professional and personal references of a potential nanny.
  • Verify the background history of the nanny. This can include identity, education, employment history, state and county criminal searches, and review any pertinent background information. 
  • Conduct one-on-one interviews with nannies.
  • Determine which Nanny would be a fit for a particular family.
  • Perform periodic updates on screenings to make sure nothing has changed in a nanny's background.
  • Market your referral service. 
  • Make sure your business is current with local, state, and any federal regulations.   

The agency is going to have administrative duties to take care of. In the beginning, you'll find that you have to take care of most or all of the paperwork on a daily basis. But, as your business grows, you'll be able to send the work out to employees or outside vendors. 

What Skills Do You Need to Help Build a Successful Nanny Referral Agency?

Your role as a referral agency of nannies will require you to interact with people on both sides of the table. You have a dual role as employer and salesperson. It's critical that you have strong interpersonal skills and a talent for managing egos. Your goal is to place the right nanny with the right family which means you need to be able to listen and read between the lines and grasp the nuances of what people are saying. You must also be willing to ask tough questions of all parties. This helps you get the information you need to identify the best fit between nanny and family. Strong interviewing skills are necessary.

It's important to view each placement as a unique pairing of nanny and family. Attention to the details means you'll make the best possible fit for everyone involved as well as earn valuable word-of-mouth referrals.

How Does a Nanny Referral Agency Make Money?

Fees for the service are paid by the family. The amount of the fees depends on the services that are required. Every time you place a nanny through your service, you collect a fee. The amount depends on the type of service required. For example, a family that needs a part-time nanny will pay less in fees than a family that needs a live-in nanny.

Determine What Type of Business License is Needed by Your State

All states have different regulations for child care businesses. These regulations cover placement agencies like nanny referral services. Check with your state in question to determine if you need a referral agency license, or if another type of license is applicable to a nanny referral agency. Also check local, state, and federal licensing laws to determine what licenses you need to operate.

You may be located in a state that collects sales tax for service providers. Visit the website for your state's tax agency to learn more about the license needed to collect and report sales tax. If you are unsure about what you need to operate legally, contact a lawyer or accountant for assistance.

If you need help with starting a nanny agency, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.