There was a closet in the space I converted to my day care room. I took the door off, painted the walls a dark, soothing gray, stenciled pretty but subtle sunbursts onto the walls, put a thick textured bath mat on top of the carpet, added a toy shelf with a sensory bin and touchy-feely books, and put in a couple of outdoor chair cushions tied together to form a padded seat with a back.
Originally, I also had a curtain for privacy and a touchlight, but the kids immediately burned out the light and kept pulling the curtain down, so that's all gone.
