A family childcare provider nurtures, educates, and protects, children who are not yet school-aged. A provider is required to undergo and complete high-quality training in order to protect the health and safety and support the growth and development of children under their care.
Although caring for children is a rewarding profession, the demands and responsibilities are high: therefore, before you consider starting a childcare business, make a careful and honest assessment of the work this will involve.
#1 Perform a careful assessment
Before you decide to start a childcare business, make a careful and honest assessment of your strengths and weaknesses as a potential childcare provider and business owner. Ask yourself the following questions:
1.) Do you enjoy working with children? Are you good working with children?
Working with children can be fulfilling and rewarding, but it can also be physically and emotionally demanding. This is why it’s important that you evaluate whether or not this is the right business for you.
2.) Are you a self-starter?
It’s important to show discipline and initiative when starting your own business, as you will be managing yourself as well as any employees you may hire. After all, it will be your responsibility to ensure that the day-to-day work is performed and that the business is responding to the needs of the community it serves.
3.) Do you have the knowledge and experience to run a child care business?
A childcare business is highly regulated, so it’s important that you are familiar with the rules and regulations of childcare, labor law, tax implications of owning a business, record keeping, rules and regulations for meals and food handling, and understand program policies. In addition to setting a daily schedule, you will need to plan activities, structure the space that is utilized, disinfect toys and surfaces, and more. There is also a continuing education requirement for you and any of your employees.
4.) How good are you at making decisions?
Decision-making will be a significant aspect of your work since you will need to decide on a variety of issues. For example, you may need to contemplate whether or not to take on a particular client, or whether to hire an assistant; you may need to turn children away when they are sick; speak with parents about their child’s behavior or development, deal with non-payments, or make the decision to terminate a contract.
5.) How well do you plan and organize?
A provider’s workday is commonly 10-to-12 hours long and weekends are sometimes required, so good planning and organizational skills will help you make the best use of your time and resources. As a provider, your responsibilities may include: supervising, educating and caring for energetic children, planning menus, cooking, cleaning, documenting and completing many other job tasks. You will also need to maintain records for regulatory agencies, as well as for your taxes. And, after hours of operation, you may need to make calls/write e-mails, plan lessons, do record-keeping or other administrative work.
6.) Have you visited other childcare licensed programs in your neighborhood to learn more about this work?
Visiting a local childcare program can provide valuable insight into what you can expect when you start your childcare business. Please note that anti-trust laws prohibit discussion about rates among family childcare providers. You can discuss rates as long as you do not disclose that you are a provider. Read “Can You Talk About Your Rates” for more information.
7.) Do you have the patience to stay focused and motivated?
The business of family childcare is often unpredictable. The licensing and application process may take months, and it usually takes time to build a business to full capacity. There are many reasons for this: the number of children enrolled can significantly change as families move; children age out (either into center-based care or school); and holidays/school vacations take place. Additionally, for providers serving the subsidized market, changes in parents’ eligibility status can result in a reduction in the number of children enrolled.
However, the impact to your business can be minimized if it is managed. You can do this by knowing and understanding your market, implementing safeguards, and doing marketing.
8.) Do you have any money to start your business?
Having necessary funds to start your business is critical to its success. Beyond needing funds to purchase equipment and materials, you will need financial resources to help you manage your program at less than full capacity — the projections for start-up programs are 60% of your licensing in year one, 75% in year two, and 85-90% in year three. To learn more about how to finance your business, click on starting up and financing.
9.) Do you understand how to budget yourself in order to operate a childcare business in your home?
During the start-up phase of your business, there will be several expenses that you’ll need to take into account. Food will be one of the larger expenses; estimate $5 – $6 a day per child (2 meals and a snack). If eligible, you should sign up for the Child and Adult Care Food Program (CACFP).
Since you will perform a greater amount of cooking, cleaning and laundry, your electricity, gas, and water bills will see an increase. It is also highly recommended that you purchase insurance, which can range from approx. $600 – $1,000 per year. This amount varies depending on where you live, the amount and type of coverage, and the number of children you serve.
You will need equipment such as toys, highchairs, swings, cribs/cots, outdoor play equipment, shelves, blankets, etc. And, you’ll need supplies such as art materials, toilet paper, hand soap, laundry detergent, bandages, and more.
Your local childcare resource and referral agency may be able to assist you in obtaining grants for supplies and materials. (In New York City you may contact CHCF.) Miscellaneous expenses may include field trips or special activities, and you will need to do some advertising (i.e. newspaper, online marketing sites, flyers, business cards, signage, and other options). All of your business expenses are tax deductible. If you are located in NYC, you can reach CHCF’s Staff at #212-206-1090.
10.) Are you resourceful and creative?
There are numerous free or low-cost resources available to family childcare providers. There are also small business grant competitions. Finding additional resources for your childcare business is a matter of conducting research, which includes reaching out to your local Child Care Resource and Referral Agency – CHCF is a CCR&R.
11.) Does your family support your decision to start your own business?
The support of your family is important to start your childcare business. This is why it’s vital that you discuss and evaluate with family members all of the changes that will take place as you launch and grow your business. To begin, you and your family will experience a loss of space and privacy: not only will you be sharing your home with the children you care for, but also inspectors from various agencies may make unannounced visits during business hours. You will also need to furnish your home with child-size furniture and other necessities. And, all residents of your home who are 18 years or older will need to undergo fingerprinting and background checks.
In addition, there may be a high demand for very early or late hours, and weekends. Are you and your family willing and able to fill this need? Will you be the sole or primary income earner? Will you be changing careers in order to earn income while caring for children? Is there a supplemental income? These are all important questions to consider.
*Disclaimer: CHCF is a nonprofit, community-based organization, and does not engage in providing legal, accounting or other professional services. The information provided on this website is for educational and informational purposes only, and does not constitute legal advice. If legal advice or other expert assistance is required, the service of an attorney or other competent professional person should be sought. This website includes links to other websites for the convenience of the reader. By providing links to other sites, CHCF does not guarantee, approve, or endorse the information or products available on these sites. While attempt has been made to provide accurate information, CHCF cannot be held accountable for any error or omission.*