For space considerations, think about how much floor space one child takes up during free play. (Not just their body, but how much space do they need to spread out their toys and become involved in what they do.) I’ve heard a good number is 35 square feet per child. Personally, I would add a little more to that, then divide by the square footage of your living space, and only watch that many children.

You should definitely check to see if your local government has regulations regarding childcare, and also if there are local resource groups for child care providers. They are usually very helpful in getting started.

Good luck!