G.B.
Each state has different laws and things they like to focus on.
First thing I would is google state regulations. Here's the link on how your state suggests you go about requesting a license.
http://dcf.wisconsin.gov/childcare/licensed/starting.htm
Here is the link to their regulations book. I'd read it cover to cover but first make sure you have the regulation book regarding home settings and not facilities. Sometimes they are totally different.
Here's their main link to the whole provider area.
http://dcf.wi.gov/childcare/licensed/
Some of the things that you can do when you have a child care business is take off a percent of your phone bill, utilities, wear and tear on your home, food bill, etc...there are so many more things that only a CPA can help you with the first couple of years you file taxes.
ALWAYS ALWAYS use a separate checking account for your business. Have it named 2009Mommy DBA (Doing Business As) Mommy's Child Care Business. It makes it really hard when you go to file taxes and you hand the person your personal check book to show them what you spent on the child care business.
Even if you go to Walmart and but a gallon of milk for the kiddos and just don't want to take time to write 2 checks do it anyway. That purchase will count on your taxes if you make it on the correct account. It makes it so much easier.
Also, you might want to consider having a separate land line for your business instead of using your own land line. You'll have to have a land line either way. If you take kids that receive assistance from the state they have to swipe their card on the machine each and every time they come. You have to have a land line for that machine. Period. It also needs to be open all the time for phone calls about openings. It needs to be in the phone book too. And list it under child care in the yellow pages.
Make it a corded phone so that if there is a storm that takes out the electricity you'll still have a working phone. This is sooooo important. A cordless phone doesn't work without the base getting electricity.
Getting your background checks in for every person in the household may take some time if you've ever lived in any other state so make sure you start those soon.
I hope it goes well for you. Please be aware that kids misbehave and you can't just drop them one day because they acted out. You have to be a professional and teach kids how to act. In a good way....you'll be required to take classes for your business. In Oklahoma a new employee has to take a 20 hour beginning child care class. They go several evenings per week and get their hours in. These are free in Oklahoma. I have heard some places charge for it.
There are many national organizations that will help you get more education and help you reach higher levels so you can earn more money. Take advantage of those classes that are free.
Your kids will count in your head count so if you get licensed for 4 kids you will only be able to take 1 child. If your older child is home along with the 2 year old and the baby you will only be able to take one child. But that will bring in some money, not a lot, but it will be a start.
Having an infant in the home really makes it hard. If you wait until she's older to do child care you might be able to take more kids but again, when school is out you will be over your limit/licensed number.
With an infant in the home you might be able to get licensed for 4. A mixed group including an infant with all younger kids is likely going to stay at 4 or less. So when you have all your own kids home that extra slot will not be much income.
Once your oldest goes to school full time you can add a child but they'll have to be gone once your oldest comes home from school.
So it will be a balancing act. Worth it? Maybe, it takes a lot of kids coming every day to make you a living. It takes one to spoil the day though. I worry about that happening with your kiddo's. They'll want a lot of attention.
I still suggest you get on the phone tomorrow and get the final answer from a child care licensing worker. You can call your local state offices where people go fill out paperwork for food stamps, TANF, and child care assistance. They can give you the right number if that office is not in that building.