I Visited Some Daycare and Noticed...

[thatdivalady]

Do you spend that deposit or keep it for the end of care 2 week written notice?

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I keep it in the bank to be held until those last weeks covered by the deposit. It minimizes the financial loss when they leave your care.

[Willow]

I was told at a Child Care Orientation class that we (as new providers) should require a two-week deposit for the last two weeks of care so when they give their termination notice they don't have to pay for those last two weeks OR if they just take off, then we are covered for two more weeks. I just think that asking for two weeks of tuition for a deposit and then they pay another week's tuition on day one that it is VERY expensive. If my rate for a family of one child was $125, that would mean $250 deposit to go towards the last two weeks of care and then another $125 when they start to be paid in advance weekly. If they enrolled and started right away, that would be $375. WOW

I do want to have a deposit, but should I stick to just ONE WEEK's pay to be used at time of termination or just apply it towards the first weeks care? HMM, I just don't want to deal with parents who don't pay.

I'm pretty shocked they'd recommend new providers ask so much of start up families.

As a parent I'd question myself contracting with a provider just starting up enough as it is, much less one that wanted to get in my pocketbook like that right off the bat without proving they were even capable of handling the job first.



I don't say that to offend you, that's just how I'd see it as a parent on the outside looking in.


When I first started up I required nothing of my families and in fact offered them discounts in exchange for their vote of confidence the first few months I got going. Then asked them for references for new incoming families if they'd be willing to provide them.


Would be one thing if a provider were up and running 10 or 20+ years and had a wonderful reputation established within their community. Only then would I consider forking over that kind of money for one's services before they were even provided.

I do think you'll struggle building a client base if you are new and no one else in your area seems to be requiring such a thing of their families.

[Blackcat31]

I'm pretty shocked they'd recommend new providers ask so much of start up families.

As a parent I'd question myself contracting with a provider just starting up enough as it is, much less one that wanted to get in my pocketbook like that right off the bat without proving they were even capable of handling the job first.



I don't say that to offend you, that's just how I'd see it as a parent on the outside looking in.


When I first started up I offered nothing of my families and in fact offered them discounts in exchange for their vote of confidence the first few months I got going. Then asked them for references for new incoming families if they'd be willing to provide them.


Would be one thing if a provider were up and running 10 or 20+ years and had a wonderful reputation established within their community. Only then would I consider forking over that kind of money for one's services before they were even provided.

I do think you'll struggle building a client base if you are new and no one else in your area seems to be requiring such a thing of their families.

I find this to be pretty true as well. I know when I first opened, I didn't charge for sick days, gave sibling discounts, didn't charge (let alone take) vacations, put up with lots of payment issues and all sorts of chaos until I felt I had earned my right to bill for these things and set policies that I was firm in.

I am NOT saying everyone who is just starting out needs to be a pushover, but in reality parents really need to know you CAN do this job before they are willing to pay out money for services not even provided yet.

[Happy Hearts]

I charge a last week deposit, one week of care and a $50 registration fee. I give families the option to flex the last week deposit over 4-6 weeks depending on their situation. All tuition payments are due the Friday before care and no child is seen until that is paid.

Same here!

[thatdivalady]

I'm pretty shocked they'd recommend new providers ask so much of start up families.

As a parent I'd question myself contracting with a provider just starting up enough as it is, much less one that wanted to get in my pocketbook like that right off the bat without proving they were even capable of handling the job first.



I don't say that to offend you, that's just how I'd see it as a parent on the outside looking in.


When I first started up I required nothing of my families and in fact offered them discounts in exchange for their vote of confidence the first few months I got going. Then asked them for references for new incoming families if they'd be willing to provide them.


Would be one thing if a provider were up and running 10 or 20+ years and had a wonderful reputation established within their community. Only then would I consider forking over that kind of money for one's services before they were even provided.

I do think you'll struggle building a client base if you are new and no one else in your area seems to be requiring such a thing of their families.

I can see the point, I just do things differently I guess. I have 10 years of experience in social work and three degrees, I also put thousands of dollars into all three of my child care locations. We do contracted 24/7 care, video monitoring and it's a family owned business. I operate as an LLC and pay taxes on income. So I definitely ask for what I believe my company deserves. Making around $3.00 per hour per child is not a negotiating fact for me, even though I've only been in business for 6 months. I guess it depends on how comfortable you are. I am comfortable with waiting for the right families to come along who fit with my rules and child care. I think you have to do what is right for you and your business.

Now that being said, I did give a small percentage off for my first few families but I did not bend with my deposit requirements. I also don't ask for a two week deposit plus 1st week of care but that is because I think that huge sum of money is difficult for the families I am trying to target (middle class who cannot afford care but do not qualify for state assistance).

[Willow]

I can see the point, I just do things differently I guess. I have 10 years of experience in social work and three degrees, I also put thousands of dollars into all three of my child care locations. We do contracted 24/7 care, video monitoring and it's a family owned business. I operate as an LLC and pay taxes on income. So I definitely ask for what I believe my company deserves. Making around $3.00 per hour per child is not a negotiating fact for me, even though I've only been in business for 6 months. I guess it depends on how comfortable you are. I am comfortable with waiting for the right families to come along who fit with my rules and child care. I think you have to do what is right for you and your business.

I don't know how any of that applies to anything I wrote to the original poster, or how it relates to the original poster's situation at all?

[MarinaVanessa]

I'm pretty shocked they'd recommend new providers ask so much of start up families.

I'm not shocked at all. When I first started out I was told the same thing as well. I am a member of our local child care assiciation and because of that I work closely with licensing and childcare providers in my area and so I know that they still tell recommend the same things to new providers as do we as a child care association and so does the county's referral program (they hold a training program for child care providers).

The reasoning is that they of all people are aware of all of the risks that new providers face. The provider may be new and unfortunately there are many families (in our county anyway, can't speak for anywhere else) that specifically seek out new providers because they are inexperienced. They come the first week then come payday they "forget" their checkbook at home. They stay another week giving the provider one excuse or another as to why they don't have the payment and before the provider knows it it's been 2 weeks of childcare given and no payment. The provider doesn't make much of a fuss until the 2nd week (sometimes after) because the provider felt that "I was new" and were "giving them the benefit of the doubt" and "I needed the money and didn't want to lose the client" ... you name it, I've heard it. Finally the provider becomes firm about payment and the family promises to bring it only to not return or answer phone calls. Many times the provider has already lined up another new provider and does the same to this provider as well. In most cases the provider doesn't file a small claims thus the parent gets away very nicely with free childcare for quite a long time. We call this daycare hopping.

This is why in my area we all suggest (STRONGLY) that a two week deposit be paid in full AND that fees be paid weekly in advance BEFORE you render services. I know that not all people out there are like this, but it's more common than you'd think unfortunately.

[daycare]

I have always required a 2 week deposit from day 1.

I do not ask for it until they have officially been asked to join my daycare. This normally happens about 30 days after care.

I allow for the parents to either pay it in full or spread it out evenly over 4 weeks to pay if off.

No one has ever questioned my policy.

[MarinaVanessa]

I have always required a 2 week deposit from day 1.

No one has ever questioned my policy.

I've always asked for one also and also allow them to pay it in payments. The only clients that have ever questioned my policy are subsidy clients because I require one of them as well and this is out of pocket, the subsidy program does not cover this (allowable in my area). Once I get the final payment from the subsidy program, I reimburse the family. I make no exceptions for anyone and ultimately I've never had a family not pick me because of the 2 week deposit.

[Willow]

This is why in my area we all suggest (STRONGLY) that a two week deposit be paid in full AND that fees be paid weekly in advance BEFORE you render services. I know that not all people out there are like this, but it's more common than you'd think unfortunately.

But what happens in your area and is subsequently suggested to counter the problem isn't necessarily relevant to another area.


Obviously there can't be much of a problem with daycare jumpers in the OP's area if (all?) other established daycare providers aren't charging a deposit or daycare fees up front, correct?


We're talking about the very basic laws of business here. Supply and demand.....is the OP's service needed? And the basic principles of competition....is what the OP has to offer reasonable in comparison to what else is available in her area.

I'm not at all saying we should all just conform, or telling the OP what she should do in regards to her proposed deposits and upfront fees.....all I'm saying is if there are other established daycares in the area NOT requiring those things odds are she's going to have a very tough time getting anyone to sign up for her program.

It's not about holding out, it's about being competitive in comparison to your current market.


I could "hold out" for someone willing to pay me $10/hour/kid but I may not be in business long.....and in the meantime I may end up attracting clients who are only putting up with my unreasonably high rates compared to other providers because no one else will enroll their child (ie. they've been kicked out of everywhere else).


Having a fat checkbook doesn't guarantee by a long shot that the family is good or will stick.

[momofthree211614]

I only take a deposit if they aren't starting within a week or two. I take a two week non-refundable slot holding fee. But as long as they start within their agreed upon start date, it is used towards their first and last weeks tuition. Otherwise I take their last weeks tuition before starting, then they pay every friday for the week to come.

[Abigail]

LOL, I wrote this thread in 2010 before I opened daycare. So I've been open and running very well since the first week of January 2012. I started out with a two week deposit, but after the first four people I HATED IT. I don't like the idea of having so much money in my account that I have not earned. For example, with the four kids I had I owed over $1,000 just in deposits which meant they just don't pay when they give notice.

For one child the family paid upfront and for the other three children I started with I created a 12 week option where they had to pay at least $X each week, like $25 more a week or so, until it was paid and each week I wrote down how much more was paid and the remaining amount and signed it. Then the last few weeks the parent just paid the final amount.

Well one family changed their contract and went full time so I applied it towards care and made a new contract for new families stating I required a registration fee that was non-refundable and due prior to their first day of care. I LOVE THIS. So one of my original families I let go, the other is still on the old original contract but will be switching to the new contract when their second child (newborn) starts care this year then everyone will be on my new happy contract. For those families who are still here from the start (I lost one because I ended it) they know their was a registration fee but they do not have to pay it because they were grandfathered in. I still love it and enjoy telling families there are no hidden costs just a one-time registration fee due when they turn in the contract.

[providerandmomof4]

I require a $20 dollar deposit for each new child, and is applied to the last week of care, or forfeited if they do not give 2 wks notice (which is always the case) but that's an entirely different thread! This is merely to make sure that they are serious. Somehow it makes me feel better to know that they are willing to put 20$ up to hold a spot, and I have never been asked to hold a spot longer than a week. It sounds kind of silly because it is so little and wouldn't put a dent towards a full week of care. I'm considering making it nonrefundable and stating it is for registration, materials, etc. I just feel like I should be reimbursed somehow for my time and effort of interviewing and printing out and going over a butt load of material.

[rhymia1]

Around here it's not common for daycares to ask for a deposit either but I require one any way and it's not usually a problem. I also ask for payment in advance which is also not heard of here and none of my clients have ever had an issue with this either. I think you should do whatever you feel will work and protect you best.
If a family can't come up with the two week deposit and the first weeks payment all at once I work something out with them like splitting the deposit into payments over a month. I've done this once and it was fine.

This is what I do as well. BUT many people in my area try to secure dc far in advance - most providers here will "retire" at the end of June, and the family usually is looking for September care, so I'm getting interviews in March for September care. That usually works out well for me, because that is probably when my spot is going to be open (losing kids to school). I need to know the family is serious - and that means putting their money where their mouths are
I underlined the sentence - I totally agree. My policies are the way they are because that's the way it works out best for ME. I do not base my policies on what I think other providers are doing (for the most part) or what I think a parent's job situation *might* be. Good Luck with your new business!