If you've always enjoyed baby-sitting and caring for children, consider professionalizing your service to maximize earnings. Starting this type of business requires getting the proper licenses that comply with your state laws and getting the word out about your business. Market to your friends and family first, so they can refer you to other people and provide references to show you're trustworthy.

Make Sure You Have the Required Licenses

Even if you're just running a small service, many states require that you get a professional child-care license. For example, Washington state requires that a baby sitter be licensed if she's caring for even just one child that's not related to her and the care is part of a business. To get a license, Washington sitters need to attend an orientation, put together a business plan, submit an application online, attend required child-care classes and get a health and background check. Research your state's requirements before you start your business.

Get Your House Ready

If you're just starting a small baby-sitting service, you'll likely want to run your business out of your home. Check with your state's laws to ensure it's legal to run a business from a residence. Washington state, for example, requires a home visit from a licensor to check the premises for safety problems. If you're caring for younger children, you'll need to baby-proof your house -- putting any potential hazards well out of reach -- before any clients show up. If you have children of your own, explain why you'll be having other people's children in your house on certain days.

Decide Your Prices

What you'll charge clients depends on how much experience you have and the prices charged by competitors. Determine whether to charge by the hour, the child or the job. Decide what type of payment works best. You can insist on being paid immediately by cash or check, or you can set up an online payment through a service such as PayPal. If you have parents who want to hire you regularly, you can even set up a subscription or charge a monthly retainer fee.

Invest in Startup Costs

What you need to start your business depends partially on its size and the ages of children you're baby-sitting. Buy toys, games and educational products the children can use to entertain themselves. For ideas about what to buy, talk to parents and find out what types of activities their children like. Invest in financial software to keep track of your costs and your profit.

Market Your Services

Word of mouth from friends, family and clients is a beginning, but reaching beyond this small circle requires you to market the business where parents are likely to look. You can run ads in a local magazine or the parenting section of the local newspaper. List your baby-sitting opportunity on websites with sections focused on home services, such as Angie's List or Craigslist. Ask for references and reviews from satisfied clients to increase your credibility. Set yourself apart from the competition by offering creative baby-sitting services. For example, you might add a service that organizes groups of neighborhood moms into baby-sitting co-ops, charging for your coordination and consultation services.