Does This Make Sense Financially?

[Unregistered]

Hi! I have a lot of years of experience working with children including a short stint as a director (before I had my son & left). I have lots of ECE- nearly an AA. The thing is, I would like to do a family childcare (even nearly got licensed once but chickened out), but we don't own our home and rent here is high.

So, if I rent a big enough place to do family childcare home, it will be like $3300-4000/month for the smallest cheapest I can make it work in. That would be a 2/2 or 3/2 house- if I'm lucky. Where we are now, we pay 1700, but there is no yard and simply not enough space indoors. Standard rates are around $700-1000 for 5 days full time. So??? Idk if it makes sense financially. I guess I don't really know what monthly expenses other than rent I will run into so I'm worried. Like, how much on food, cleaning supplies, taxes, paper products, etc... Any tips on figuring this out? I thought if I got 6 kids at say $600, that's 3600. I can contribute half the rent, then have some for left for daycare expenses and to put some in the bank... Or will it all go towards expenses?

[Starburst]

There is no 100% straight up answer because every state's regs/ tax laws are different and childcare is a really unique home business in terms of taxes. Not to mention we don't know what's best for your family, only you know that.

I have had experience working in a home daycare and haven't yet opened my own but I do know there are tax deductions on time/space in your home as well as food program to reimburse feeding the children. I suggest using Tom Copeland's child care business books (Redleafpress.com; he also commemts on the taxes section of the forum occasionally). He has several books that discuss the business/money end of childcare (those were my text books for a FCC business class) and are relatively inexpensive.

Also, if you do pursue this and need an accountant make sure they know family child care tax laws because it's very different from other home based businesses.

[LysesKids]

Also take into account that you will not always have all your spaces filled so you have to plan on bringing in less some months, don't forget the extra insurance many states require... is your landlord even on board with allowing it? In some states they don't have to allow you to work childcare in a rental, others have no problem. Also keep in mind unexpected closures for weather... this past week killed me because I had to close 4 out of 5 days due to no power after an ice storm.

I guarantee your food & cleaning bills will be much higher . Even if you are on the food program, they pay after the fact, then theres sanitizing everything, steam cleaning rugs at least once a month, is your furniture scotch guarded? Just a few things that you will pay for upfront.

[butterfly]

I don't think I could pull the trigger on that deal. This business is too unpredictable. I wouldn't count on always having your spots full. Even my most reliable clients have left me due to a job relocation, etc.

I think I'd start with just a couple kids in my own home to begin. This will allow you to get started on word of mouth advertising, etc and build up a client base before putting so much money into another building and everything that goes along with it.

[Starburst]

I don't think I could pull the trigger on that deal. This business is too unpredictable. I wouldn't count on always having your spots full. Even my most reliable clients have left me due to a job relocation, etc.

I think I'd start with just a couple kids in my own home to begin. This will allow you to get started on word of mouth advertising, etc and build up a client base before putting so much money into another building and everything that goes along with it.

If you cinsider taking a few and doing unlicensed for a while, just make sure you look into your state's law about unlicensed care (some you can only watch children from one family some up to 4 or 5 children from different families). Also look into how much square footage in the home or outside per child licensing requires (I think the average is 35 sqf inside and 75 sqf out side

[Unregistered]

Thinking about the input thanks! Our laws in CA are that landlords don't have a say- we just are required to inform them (they can raise the deposit though). And we can have parents sign waivers for insurance, but I would pay for it. And we can't have legally unlicenced here. So. It comes down to what would be the monthly expenses and as mentioned- what about lean enrollment...! So hard to say with these rent prices so high. Our rent will be increasing by a lot soon anyway because we HAVE to get out of this tiny place. So, I guess I figured I'd just go for an even bigger place than we really needed for our family and open up for extra income. The other thing is, I can have a job teaching where I am now (I'm very part time) and get free enrollment for my child, BUT I just don't love the program. I am far enough along that I want to do things my way. I don't know if doing things my way is worth the lower income and financial risk... What to do... what to do...!

[Unregistered]

Oh and we will definitely never have closures due to weather! I won't brag but the ts pretty much sunny and 70 every day. In fact one of my main problems with my place now is no yard. We pretty much have to have outdoor classroom year round to be relevant.