Worried About Getting into the DC Business

[Unregistered]

I'm thinking about opening up my own in home daycare. I don't watch any kids regularly now, though I do baby sit my neighbors four girls quite a bit (their ages are from 18 months to 9 years). I've been reading other posts for a couple of days and noticed that alot of people decided to get into this because they wanted to stay home with their own children and that their also married or living with someone else who has an income. I'm 19, no children, and live with my parents who are unemployed, now I'm not getting into this for the money but I would like to make a living doing this and only this. Is this realistic? Has anyone else been in a similar situation?

I've read all the things I need to do to get licensed, and before I make a huge commitment to this (like moving to a bigger home, or spending money to get started), I would like to have some comfort in the fact that I will/can make a living. I know nothing is guaranteed. This is something I really want to do, I just need some reassurance (I guess? ), that it is possible. Believe me, I'm not wanting to start this for the money or else I wouldn't be so worried! .

Anyways, any and all help and/or advice would be greatly appreciated!
Thanks!

[Unregistered]

In my own experience, I wouldn't be able to get by on just my daycare income. Granted, I have 3 kids which is an expense that you do not have. I also live in California where rents are pretty high. I probably could make ends meet if I were 19 with no dependents.

The reason I decided to do home daycare was because I need to have 4 years of experience in a licensed facility (can include home daycare) before I can open up a center. Teacher/child ratios are higher in centers and therefore I am hoping the income will be worth it.

[originalkat]

I have worked in Childcare for a long time

I am 30 and have been doing home daycare for several years now. I started off working in centers as an assistant teacher when I was 16. I then took some early childhood classes and became a lead teacher (when we were living in San Diego). When I was about 20 I decided I really wanted to open a home daycare. I was married, but we did not have any kids. However, we did not have our own home yet and it just was not the right time to make it all happen. If you want to offer a quality program, it takes experience--dealing with parents, finances, business practices such as contracts and policies etc... You of course can learn as you go along, but being in the childcare field for awhile really helps. Besides the licensing issues, there will be some start-up costs for toys/equipment etc... Plus, it takes some time to get enrollments in your program. Not having another income would make that difficult in my opinion. But I am sure it could be done if you had some money in savings to help bridge the gap. We live on my husbands income and bought our home/cars etc according to his income alone. My income from childcare (right now about $1400 (3 paying kids) per month with the potential of about $3000 if I took in more kids) is extra. So if I lose kids we dont have to worry about paying the bills. However, if I did not have any kids we would beon a VERY tight budget.

My point is, I think you have a good dream/goal to work toward. It may work now depending on your financial situation, but more likely it will be a goal for the future. From the time I thought about starting my home daycare to the time I actually started was about 7 years. Now it probably wont take you that long. But be sure you are in the right place in your life to start your own business as a home chaldcare provider. Good Luck!

[gbcc]

I am a single mom of a 7 year old and I am also raising my niece. I have been doing childcare for 4 years now very sucessfully. I have actually done so well I have expanded my registration for more children and hired an assistant. I had a really good job at the county but put in my 2 week notice and went on a whim to start chidcare. It took about 3 weeks to get my first child. After the first one it is much easier. Parents don't want their children being the only ones in care.

There are always ups and downs. You have to make sure to have yourself a nest egg because you don't have that spouse to depend on. If things get tough you may have to consider opening your home on evenings and wkends as well. Being single with no children may not be difficult for you.

I would also look into how many providers are in your area. When I first started, there were not that many registered providers so there was a high demand and I was able to take right off. Now in my area, there are at least 20 providers so I would not recommend starting out. I am ok now because I have connections through school and parent referrals so I am always comfortable.

Would your parents home be big enough and would they let you use their home to start off with? That would allow you to save up so you could get your own home and have some savings for if things did not take off very fast. I was renting when I started and come time to buy a home and move my families were fine with it. They were very supportive.

[jen]

I started doing daycare so that I could be there for my children when I was getting divorced. Daycare was my sole source of income--in addition to child support--for a few years until I remarried. I kept my house, paid my bills, and still had a some left over...

It can be done!

[AmandasFCC]

Yup, my daycare is the primary source of income in my household as well. My hubby lost his job last year and instead of going on EI, he picked up a job at McDonalds so that we could at least have some benefits. For the most part, his paycheck pays for the medical insurance and a bit of the mortgage.

A very good friend of mine's mother was a single mother who ran a daycare, also the sole provider for the family, and she did very well for herself.

[seashell]

I am a single mom of 2 and the daycare is my only income. I have found that I am making more money than I would if I worked out of the house. I am pleased with my income. However, I know that it could change in an instant, so I put away as much as I can, even if it's just a few dollars. My advise is to make sure your parents are perfectly happy, keep advertising even if your full (if word spreads that you're always full, when you do have an opening, people will jump on it!!) and save what you can. Eventually, it's going to rain.

Good luck!

[Unregistered]

Taxes

Is the frustration with taxes worth it though? I don't know enough about taxes and how much to know to save come tax season!

[Mister Sir Husband]

Is the frustration with taxes worth it though? I don't know enough about taxes and how much to know to save come tax season!

I am planning on opening my home daycare near the end of August.. I also don't know in my opinion enough about the taxes to catch everything possible that will work in my favor, but that's what H&R Block is for The few bucks they will charge me the first year or two until I am comfy doing taxes myself will be well worth it.

[Starburst]

I have learned as far as taxes go (depending on your state and how much you make) a rule of thumb is to expect at least between 15-25% of your earned wages to be taken out (my experience from when I worked). At first try to plan saving that percentage of money from what you earned and put it to the side for taxes, in some cases that may be too much so after taxes are done a few times you can see a pattern and will learn what percentage you should put away for taxes. I heard you can do taxes quarterly (every for months) or yearly.

You should look into how many daycares (home and center) in your area, the population, and see if there is a major or even a slight need for child care. In my current town there are ALOT of home daycares and daycare centers, as well as a low population (under 36,000) so I plan on moving before I start my business (currently in school full time).

Some other tips:
*RECORD EVERYTHING! Keep the receipts of everything you buy that is related to your daycare including materials, home repairs, food, toys, furniture, etc.

*Tom Copeland has a lot of great books about child care including taxes and record keeping (and what is considered tax deductible).

http://www.tomcopelandblog.com

*You can also try to go into food program, they will reimburse you for feeding children.

*Consider taking some classes in business and child care (CD/ECE). Some colleges have classes specifically for family child care providers and business administration. If you go to school full time may be able to qualify for financial aid. Also if your on the younger side, a degree can make you look more professional and serious about your business.

If you do decide to open a daycare, consider becoming a member of the board and joining the Providers In Training group.

[Starburst]

For information on child care and taxes go to http://www.tomcopelandblog.com/. He has lots of books for family child care providers and helping money related issues.

To look at the books he has go to http://www.redleafpress.org/, they are reasonably priced (about $20) and have lots of advice about how to save money and what can be tax deductible.

[Blackcat31]

I have learned as far as taxes go (depending on your state and how much you make) a rule of thumb is to expect at least between 15-25% of your earned wages to be taken out (my experience from when I worked). At first try to plan saving that percentage of money from what you earned and put it to the side for taxes, in some cases that may be too much so after taxes are done a few times you can see a pattern and will learn what percentage you should put away for taxes. I heard you can do taxes quarterly (every for months) or yearly.

Taxes as an employee differ from paying taxes as a self employed business owner.

Anyone self employed should do their homework about paying taxes as well as find a tax consultant and/or preparer that specializes in child care taxes.

*Consider taking some classes in business and child care (CD/ECE). Some colleges have classes specifically for family child care providers and business administration. If you go to school full time may be able to qualify for financial aid. Also if your on the younger side, a degree can make you look more professional and serious about your business.

Kind of confused by this statement. :confused:

If you are younger?? What age is too old to go to school in your opinion?

Professionalism has NOTHING to do with having a degree.

[MyAngels]

Kind of confused by this statement. :confused:

If you are younger?? What age is too old to go to school in your opinion?

Professionalism has NOTHING to do with having a degree.

I'm thinking she meant that if you are a younger person in this field parents may not take you seriously as far as being committed to a long-term career in the field, and a degree may help mitigate that somewhat. At least that's how I read it .

[MyAngels]

I am planning on opening my home daycare near the end of August.. I also don't know in my opinion enough about the taxes to catch everything possible that will work in my favor, but that's what H&R Block is for The few bucks they will charge me the first year or two until I am comfy doing taxes myself will be well worth it.

You'd do better to find a tax preparer who has specific knowledge about the child care field. I'd stay away (far away, actually) from H&R Block. Just my opinion.

[Starburst]

Taxes as an employee differ from paying taxes as a self employed business owner.

Anyone self employed should do their homework about paying taxes as well as find a tax consultant and/or preparer that specializes in child care taxes.

This is an exert straight from Tom Copeland's FCC Record Keeping Guide (page 165- Paying Estimated Taxes):

"Your tax rate will either be 10%, 15%, or 25%, plus 15.3% in Social Security" (ok so I forgot to include SS)

On the bottom of the page How Much Should You Withhold:
"A rough rule of thumb is that federal income and Social Security taxes will amount to about 20% of your gross income (your gross income includes all fees you receive for child care and reimbursement from the Food Program)"

Of course she would have to pay more taxes if she has an employee but chances are she wont need an employee starting out and that her mom could help her if she does.

And yes, I for one am terrible at math and have said that I would need a finance/tax expert.

Kind of confused by this statement. :confused:

If you are younger?? What age is too old to go to school in your opinion?

Professionalism has NOTHING to do with having a degree.

Like a PP said, It was meant as some people don't take younger providers as seriously as business owners (as someone stated their concerns in a thread about it a few weeks ago). And Honestly BC, I DO think have a education does add a bit more of professionalism than none at all. If you don't believe me watch Tabitha Takes Over, there are lots of people who say "I don't need more education, I got the certificate and I been doing this for {10, 20, 30, 40} years" but they are usually the ones who are slipping in skills and act the least professional. At the very least it shows initiative that you take what you do seriously (IMHO).

After all, would you want a doctor who didn't go to med school to preform surgery on you? Or would you want to pay a beautician top dollar if they didn't have any education/certificates in styling hair, or doing nails and skin? I was in cosmetology and trust me, there are ALOT of illnesses you can get if a nail artist or esthetician is not educated in sanitizing and proper application/storage of material. Also how are child care experts supposed to break out of the "glorified babysitter" label if they don't hold themselves to a higher standard than bare minimum? Yes there are some things you cannot learn from a class or a book and having a degree doesn't "magically" make you know everything or make you professional; but its always good to keep up to date on the latest break-threw on ECE techniques and information.

Sometimes it seems to me that you don't really value education of child care professionals because you are always talking about how standards are getting higher and "Family child care will never be the same again". But for things to get better they have to grow, and growth sometimes means change. And not all change is bad.