Information for Child Care Providers

Operating a Child Care Center
Running a child care center is first and foremost running a very busy small business. But it's much more than that -- it's making a commitment to be a vital part of the holistic development of other families' children. The successful child care manager wears many hats: early childhood educator, business manager, fiscal administrator, safety and health officer, and building architect, among others. We understand that you'll have your hands full with each of these big jobs.

Operating a Family Child Care
Being a family child care provider can be a satisfying career. You can make a concrete difference in the lives of the children and parents you serve. It is also a chance to own and run your own business. Many family child care providers start their business while they still have young children of their own, and continue providing family child care long after their own children are grown.

• Certification in CPR and FIRST AID
• 6 hours of training in Getting Started Class
• Water test if you are not on public water
• References from three persons (not relatives)
• Provide signed release forms permitting the Maine Department of Human Services to obtain a background check on the provider and anyone in the household 18 years and older.
  

Business Issues
You will need to set up an efficient system to manage the many aspects of running a small business. Keep organized records of all your expenses and income. Maintain a separate checking account for business expenses. Save receipts, and spend time each day or week recording information. A good record-keeping system will provide the information you need for tax purposes, and will allow you to gauge your income and expenses on a regular basis.

• Your own salary and benefits
• Educational supplies and equipment
• Food and kitchen supplies
• Cleaning and diapering supplies
• Your own professional training and development
• Advertising costs
• Insurance
• Repairs and maintenance for the space you use for children
• Other: legal fees, transportation, office supplies, etc.

Taxes
Like any small business, you will have tax responsibilities. Keep good records to use at tax time. Be sure to keep all receipts, and to track all income and expenses. When in doubt, check with your tax consultant or the Internal Revenue Service for current tax regulations.
Deductions include food served to children in your program; diapers; toys and equipment for children; liability and accident insurance; supplies (art, cleaning, office, etc.); field trip expenses; memberships and subscriptions to child care organizations; and professional development and training.
Partial deductions include use of your home for business, and depreciation of equipment used in the child care business (cribs, swing sets, high chairs, etc.)
Your child care income (less allowable expenses) will give you your net profit or loss. You must report all income, whether paid in cash, check, or other means; whether it comes from an individual or the state (if you accept vouchers, for example); and whether or not you make a profit in any given year (within certain IRS guidelines). Contact the IRS or a tax accountant to find the proper forms for filing federal, state, and social security taxes, and for the types of exemptions for which you may be eligible.
As a self-employed small business owner, you will be responsible for filing quarterly federal self-employment taxes. These are usually filed as estimated tax. Failure to file and make payments on time can subject you to interest and penalties. For more information call 768-3045, and you may want to contact the IRS, or a tax consultant.

Insurance
Liability Insurance: Most homeowners have insurance, but there are special issues related to operating a child care business in the home. Talk to an agent with child care experience. Your liability insurance should include coverage for accidents, property damage, and legal fees related to any claims. You will need liability insurance if you rent your child care space, and the policy may need to indemnify the landlord as well as yourself.
Automobile Insurance: If you use your car to transport children, you will need to obtain additional insurance.

Contracts and Policies
Set clear expectations about payments in the parent-provider agreement, which will make it easier to talk about fee issues later. Once the interviews and visits are completed, formally enroll the child into your program, and discuss any topics you may not have covered in earlier conversations. Give parents a copy of a signed contract. Some providers print a brief handbook with information about policies and program philosophy.
Prior to enrollment, parents should complete and sign release forms for situations requiring emergency medical treatment or dispensing medication, and for authorization of individuals to pick up the child from your program. Many states require annual health checkups for children in child care, with up-to-date immunization records. Health forms should be signed by the child's pediatrician. Keep all forms on file.
For more help with contracts and policies, visit the Redleaf Institute's website: www.redleafinstitute.org. Their resources can help answer any questions you have about business issues in your family child care.

• Place an ad in local newspapers; make sure your ad stands out, and give concise, specific information about your program.
• Print flyers or brochures to post on bulletin boards in places where parents are likely to go: grocery stores, children's bookstores, Laundromats, libraries, workplaces, hospitals, and colleges.
• Word-of-mouth referrals -- Encourage parents to spread the word. Stay in touch with families that have used you as a provider in the past, as they may have friends or family in need of care.
• Online marketing -- Spread the word about your family child care home to the wider community in your area with a website and by joining child care LISTSERVs.

The appearance of your home is a very important part of marketing your services. The inside of your home should feel inviting and comfortable. Is the area you use for child care well-organized? Does it welcome children? Bulletin boards and displays of children's artwork can give a good impression.

• Total number of centers in the community, and ages of children being offered care
• Hours offered by other centers, whether early morning or evening care is offered, and availability of part-time or flexible care
• Whether centers have waiting lists or a lot of vacancies
• Location of available centers

Community Demographics
You can get a good overview of your community from talking with us, by looking at recent census data, and/or by surveying local parents. Demographic information can help you estimate the number of working families with young children in the community, where they live, and their likely income and child care tuition payments.
Options in a Competitive Environment
If you discover that other centers have many vacancies -- or, conversely, are experiencing difficulty in hiring qualified staff -- you may then revise your business plan to address the competitive environment.
Some options to differentiate your program include:

• Providing care in a different community with higher demand and lower supply (where centers have a low vacancy rate)
• Providing non-traditional hours of care not offered by other centers (e.g., evening/weekend care, or overnight care)
• Providing higher quality care and paying higher wages than other centers (e.g., hiring well-educated, experienced staff)
• Offering a type of program or service not previously offered in the community (e.g., a Montessori or school-age care program, or mildly-ill child care)