Wonder Kids - Child care resources for parents and caregivers

How Much Should I Charge For My Home Daycare Business?

How much you charge for child care depends on several things, like the services you provide, the established “going rate” in your community and the income level of your potential customers. The challenging part is to balance your financial needs with what parents are able to pay.

To determine what your expenses are you will want to consider whether or not you have any other sources of income. You will also want to look at how many people you support, and how many hours a day or days a week you want to operate. Most importantly guarantee yourself a decent living wage. You are providing a valuable, professional service and you have the right to be paid accordingly. You are not just a babysitter.

Make sure your fees cover ongoing expenses. These may include direct child care business expenses, legal and tax fees, groceries, household supplies and other related expenses.

You will have to decide what meals you will provide to the children, the most common meals provided are lunch and two snacks. If you are reimbursed by a food program for these expenses, you may be able to lower your charges to parents, but you may not charge parents extra for food. Use a meal planner to help you plan out your meals and snacks.

Think about start-up costs for cribs, wheeled toys, small games, books, toys, car seats and outdoor play equipment. Budget for repair and replacement of these items and consider if new or used items are a better investment. Always save your receipts. Consider a variety of curriculum supplies such as paper, paint, clay, pencils, pens, sand and art. Household and medical supplies such as fire extinguishers, toilet paper, laundry soap, first aid, disinfectant, napkins, paper towels, tissues, liquid hand soap, diapers and wipes. These all need to be included as business expenses.

You may have extra expenses such as: advertising, substitute salaries, education, training, association dues, mileage, insurance, legal and tax fees. Family child care providers licensed for 12 or 14 children need to budget for staff costs, benefits and payroll taxes.

Normal family expenses may increase due to the child care business. These may include maintenance of the home such as painting, landscaping or cleaning services. A portion of the rent, utilities or telephone costs should be figured as a business expense when budgeting.

Should You Charge a Flat or Flexible Rate?

You may charge a flat weekly rate or flexible rate. A flat rate is appropriate for a full-time child. The same rate can be charged whether the child is absent on a particular day or not. For school-age children who come only in the afternoons, or for children who come on an irregular basis, an hourly rate may be preferable. A daily rate could apply to children who come only on certain days, such as Monday, Wednesday and Friday. You may also add extra fees for extra services, such as special foods for a particular child, and a higher “overtime” rate when parents arrive late to pick up their child at the end of the day.

Parents are looking for the best child care. However, “best” has a different meaning to each family. While you need to develop a program that provides a healthy, safe and secure place for children, you should also determine what methods you will use in discipline or toilet training. What curriculum or learning activities will you use? Do you have pets? Do you provide a smoke-free environment? Do you provide transportation? Which meals and/or snacks will be provided? What time do you open for child care services? Will you provide child care hours for families who work or go to school during evenings, weekends or overnight? All these affect whether the parent chooses your service or someone else’s.

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Tags: daycare activities, Daycare Business, daycare rates, starting a home daycare

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