What steps do I need to take to convert home into a daycare.

If you are going to be licensed/registered they come and inspect your home.
One daycare lady I knew said they had to have a metal front door and back door.
Then they told her she had to change the little wading pool water every hour.
It depends on your state laws.

Some rules are set regardless like so many care providers per child
Like you may only be allowed 5 to 10 kids and have to hire somebody to help if you go over the limit.

Here is a link that should be helpful
National Resource Center for Health and Safety in Child Care and Early Education (http://nrc.uchsc.edu/)

Where are you going to be operating this business. It would be helpful to know that. The laws will vary depending on where you are located.

Thanks!