Go to town hall and purchase a copy of your local zoning ordinance. They're available to the public, usually at a minimal cost - or just call your zoning officer and ask.
If you're in a residential area, I doubt you'd be able to run one out of your home (noise restrictions, fence height restrictions, maximum number of dogs, parking issues, etc.). My guess is you'd need to find space in a commercially zoned area. Of course, it all depends on what your town will allow. The zoning ordinance will have all the necessary information as to exactly what is allowed where.
If you can, you should talk to the woman that had opened one (if she's still around). She would probably be a fountain of wisdom having been there, done that.
You'd definitely need insurance, access to emergency medical care (perhaps an agreement with a local vet), the proper climate controlled facilities, indoor and outdoor play areas, separate play areas for small/large dogs, sanitation control (will your local garbage men take all those bags of poo?), and I'm sure a gazillion other things.
Not trying to dissuade you - you've just got lots of research to do. Fortunately, research usually doesn't cost anything but time!
In addition to the specifics for a doggie daycare, you can get excellent general business advice from either your local SBA (Small Business Administration office) or from...I can't remember the name, but retired business executives are available for free/low-cost business consultations - the SBA office would know.