B.R.
I would highly suggest being liscenced regardless of how many kids you plan to have. I'm going to do it myself (I haven't started the process yet, so I don't know how long it takes). From what I can tell, it's not too hard. You don't have to have any background or ECE credits like you would to work in a center. You contact the liscencing agency, they come and inspect your house just to make sure it's safe, they do a background check on you and any other adults who live in your house to make sure none of you are pedifiles or murderers, and you pay just a little for the liscensing fee (I think it's like $65, maybe less). The only other expense is that you should have liability insurance in case a child gets hurt at your house- this is the main reason I would say you get liscenced, anyway, because if a parent wants to accuse you of something (like say your house is unsafe or something) but you've been inspected and approved and you have insurance, it will help cover your butt. I priced insurance, depending on the coverage you want it's well under $50 a month.
Other reasons to be liscensed- it's the law, and if you get caught you can get fined without a liscense. You can get some financial assistance from the government if you participate in their food program (food is your #1 expense when watching kids, and they make sure you're feeding kids enough of the right stuff in exchange for some money to help defray the costs). Also, if you're liscenced you get to register on Kids N Care (I'm not sure if it costs, but if it does it isn't much) which is a database that helps parents find child care to fit their needs- from talking to others with family child cares this is the best (and often only) form of advertising they used.
I'll attach some links to the end of this message to help you out, but here are some things to know. You don't need a liscence if you are taking care of kids from one family in addition to your own kids (so like if you are watching your friend's three kids and that's it). You do have to have 15 hours of training in first aid, CPR, etc. The max children you could have would be 8 including your own, with only 2 of them under the age of 2 (so you could have 1 under 2 plus your youngest). Your older two are school age (over 6) and because they are that old you could care for five other children in addition to your own (but as I said, four of those five would have to be over 2).
Daycare Insurance Services (DCI) (800)624-0912, http://childcareinsuranceservices.com/index.php
California Dept of Social Services (responsible for monitoring and licensing Family child care homes)http://www.cdss.ca.gov/cdssweb/Default.htm
Go to Care Providers, Get a License, Child Care, then Family Child Care Home Licensing Information- it will tell you basically anything you need to know.
Family Child Care Home Licensing Manual http://www.dss.cahwnet.gov/getinfo/pdf/fcc.PDF
Kids N Care (referal network for the IE- you may have a different one if you live elsewhere) http://cds.kidsncare.com/Main/MainHomePage.aspx
Child Care Food Program (I'm not sure if this is the only or best one, but it is what I have found so far. Someone at licensing might be able to help you with this) http://www.cnpsc.com/how.htm
Sorry this is so long, but I had a lot of info to share! Plus, I feel really strongly about improving all forms of child care, including the family child care home, so I would not only highly recommend that you get licensed, but that once you have started and have made a little money you find your closest community college and take a class or two at night. Community college in CA is ridiculously cheap, only $21 a credit, so that's $63 for an entire class (plus books, but there's a program at many colleges that helps you get your books for free). Taking care of kids is so much more than just meeting their basic needs. Anyway, feel free to contact me if you need any more information on this. I would love to help!