There are a few things you need to be doing in order to have good business practices for home daycare that will save you so much headache in the future.

Business Practices for Home Daycare

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There are a few things you need to be doing in order to have good business practices for home daycare that will save you so many headaches in the future. Running a family childcare home IS running a business.

clock and a computer in a home daycare

Every move you make in your child care business sets a precedent for how your future business will be handled. What do you want to become? Think about it and use good business practices for home daycare in everything you do. 

Click here for tips for daycare providers

YOU NEED A CONTRACT! Many providers think they don’t need a contract because they are just babysitting. No so! This is a business that involves money transactions and if you don’t have a contract in place, you have no protection for yourself. Get a contract made. You can click here to see what Tom Copeland recommends about contracts or get his book “Family Childcare Contracts and Policies”

It’s best for your contract to be only one page. Figure out what the 10 most important things are to you and make those your legal and binding contract. Do you want to get paid? On time? Have parents pick up on time? Charge late fees? What do you want parents to be responsible for? These all need to be addressed in the contract, especially if they involve money or time.

Successful childcare business

You should have a separate policy and procedure packet that outlines your expectations for the families you serve and what you plan to offer to them. This should be as short as possible as well, no more than two pages. The shorter your paperwork is the more likely parents will be to read it. Remember that less is more.

Do you need a license? In Oklahoma, you must be licensed to care for even one child. Click here to see what the requirements are to get a license. Whatever state you live in, you should check to see what the law is You don’t want to be breaking the law and not know it.

organizing daycare paperwork, bulletin board and paperwork notebook full of daycare paperwork

How should you set your rates? You should set your rates at a competitive rate for your area. Each area has different price ranges. One way you could determine what to charge is see what DHS subsidy rates are and decide if you could work for that amount. Decide what you want to offer and whether that should be more or equal to the current rates offered by DHS or other subsidy agencies. It is not lawful to discuss rates with competitors.

daycare business practices

How can you raise your rates? If you are currently a provider you may be wondering how you could raise your rates to become more appropriately funded, or be able to keep up with the cost of living or increase what you are able to offer. In that case, you should give your parents as much notice as possible so they can plan for their budgeting or look for alternative care. I would never give parents less than one-month notice. You need to be fair to them and consider they are trying to make a living as well.

Good business practices

My contract states that I raise my rates every year on September 1. If I need to raise them, I do it then, if not, then I look generous for not doing it. I typically raise them every other year.

There have been times I raised them two years in a row and there have been times I’ve gone more than two years. I just do whatever I need to in order to provide for my family. I find that if you are fair with your parents and open, it does not cause problems to raise rates. You need to do your best every day to provide excellent care so people don’t mind when you need to charge more.

How can you get parents to pay on time? This is a problem many providers have. People forget you are working for a living and need to pay your bills with the money they pay you. One way to keep from having people rack up a huge bill and then quit, owing you money, is to have them prepay. This eliminates a lot of problems for everyone. You don’t want to have to take someone to court to get past due fees, so make sure parents pay tuition BEFORE services are rendered for that time frame. Many providers have a no pay, no stay policy. That’s the best way to protect yourself against lack of payment.

What should you do in the event a parent writes you a bad check? This has happened so many times over my 21 years of service. Everyone can make a mistake and bounce a check, but there are people who are chronic offenders and continually write hot checks.

My policy is, if you bounce me a check, it’s understandable. You pay in cash to cover the check and any fees I incur. If you bounce me a check twice, you reimburse me in cash and I no longer accept anything from you but cash.

How can you get parents to pick up on time? We have all been there. We have plans to be somewhere after work and parents don’t pick up on time. If you hate late pickups, you need to have late fees in your contract.

Many providers charge a dollar per minute, some charge 5 dollars per minute. What you need to do is make the fees fit your tolerance level. To me, a few minutes once in a while is no big deal, but it is a big deal if someone comes late all the time. They are saying, my time is more valuable than yours and that’s not okay.

You need to either be happy with how your parents treat you or change something to make it work. If you have late fees in your contract, you NEED to enforce them. There is no point in having the contract if you don’t stick to it.

It’s typical for providers to be very compassionate. By nature, caregivers must have squishy hearts. You also need to have a business mind. Don’t allow parents to take advantage of you because of your giving heart. You should not allow people to break your rules. They will not respect them if you don’t. You have to also be a professional business person.

What is your sick policy? You need to decide how sick is too sick to be in your care. You need to express this to the parents BEFORE you start providing care so if a child is sick, you already have a policy in place that parents understand. This will avoid a lot of frustration for you and them as you navigate providing care for them.

Do you want to set a maximum temperature that you won’t keep? Do you want kids to be fever, diarrhea, and vomit free for 24 hours before they return? Are you going to make no-nit policy for lice? You need to discuss these procedures before there is a situation. These are some of the most important business practices for home daycare.

What is your policy about kids being absent? You should be able to have a steady income in your business. My absentee policy is if children are absent, or if it’s a holiday, parents pay. I do not, however, charge for my vacation days. I plan them in January for the entire year, so I can budget ahead for not getting paid. Many providers charge for their vacations, and that’s fine. There’s nothing wrong with that. I don’t because my parents may have to pay someone else to care for their kids.

daycare business practices for success, rate increase and vacation days list

Daycare business

I do take paid holidays and I do require payments when families are on vacation or kids are sick. To me, that’s a great compromise. You need to do what you feel is fair and what works for you. One thing I would NOT do is give them unlimited unpaid sick days.

People tend to take advantage of you if you give too much. Make sure people know ahead of time they pay whether their kids come or not. It’s not fun to plan to pay a bill and have someone call in sick and not pay you for those days. It’s much easier to budget when you know ahead of time so consider that when making your policies.

How do you advertise? There are many great ways to advertise your business. Newspaper, online groups, craigslist, flyers put up at pediatrician’s offices, parks, grocery stores, or other places families attend. Church is a great networking place to spread by word of mouth you have openings. Resource and referral agencies are great too.

You could make business cards and staple them to candy and give them at trick or treat. You could do all kinds of clever things to advertise. The number one best way to stay full you’re your childcare business is to be awesome and let that spread by word of mouth.

I have always seen providers who struggle to stay full and the reason is no one is recommending them to their friends. Think about that when you make every decision you make throughout the day when dealing with parents. They can make or break your business.

How do you attract clients? Parent involvement is super important to keep your childcare full. When they are emotionally invested in what you’re doing because you involve them, they will be more likely to recommend you to other parents. Good business practices for home daycare always brings future business.

Make sure you are meeting their needs as well. That’s part of your job. If you have a super nervous mom who is scared to death to use childcare, it’s up to you to comfort her and show her her baby is okay. Send pics during the day, text her it’s going great, or whatever you need to do to help her feel better. She will reward you with business for years to come. Each family is an investment in your future.

Every step you take towards becoming a more professional provider will be another step towards making your business a smashing success. You will love doing business in a way you can be super proud of and that starts with being the best you you can be.

Believe in yourself. You have something unique and amazing to offer the world and they won’t know it unless you let it shine for them to see. Toot your horn, share your accomplishments on Facebook, talk about your day with people, tell your friends and family how important your job is.

We can change how people see what we do and show them it’s not just babysitting, it’s using professional business practices for home daycare and we have a special gift to offer the world.

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  1. So many great ideas here! I also highly recommend Dr. Bailey’s books on concious discipline. Thanks Christina Kamp!