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How to set up a family daycare center in your home

  • A survey by Care.com recently found that more than a third of respondents who use daycare are considering in-home childcare options.
  • Starting a family daycare center in your house requires getting licensed and having a safe, spacious, and stimulating home environment.
  • You should be able to charge several hundred dollars a week per kid, depending on your location, and receive deductions on anything related to your business.
  • There are several federal programs that provide vouchers and reimbursements for in-home daycare facilities, as well as over 400 childcare agencies across the US that provide training and assistance to caregivers.
  • Visit Business Insider’s homepage for more stories.

The United States has never had a robust national childcare system, and the COVID-19 pandemic has put even greater strain on already struggling care providers. In many states, daycares were forced to close during lockdown orders, and even as businesses open up again parents across the country are worried about their kids’ safety in large groups.

In a recent survey conducted by Care.com, more than a third of respondents who use daycare said they’re now considering in-home daycare because of concerns over coronavirus. Also known as family childcare, in-home daycare takes place in a provider’s home. It’s usually less expensive for parents than nannies or traditional daycare, and the groups of children are much smaller.

Jessica Sager, cofounder and CEO of All Our Kin, a Connecticut-based nonprofit that trains and supports family childcare providers, said that she’s never seen greater demand for in-home daycare. NeighborSchools, a Boston-based tech startup that helps in-home daycares manage their licensing, marketing, and operations, has also received a “higher than average” amount of interest from childcare providers looking to open up a new in-home daycare this year, according to CEO and cofounder Brian Swartz.

“If you’ve got one kid home with you and you’ve got some background or interest in child development, you can bring a few more kids into your home and make ends meet,” Swartz said. “You can make a modest living doing this.”

So what exactly does it take to set up an in-home childcare program? Above all, it requires a deep love for and commitment to taking care of children. “You have to understand that you’ll be with kids all day,” Sager said. “You have to be patient and flexible and excited to watch children learn.”

“That being said, you don’t have to have it all when you start,” Sager added. For childcare providers interested in starting an in-home program, Business Insider tracked down the basics of where to begin.

Licensing details

Family childcare programs are run out of private homes, but they’re still licensed just like center-based daycares are. Licenses are given out by states and municipalities, and they vary widely across the country. There’s typically a small application fee and time cost of any required training. You can find a database of state licensing regulations here.

Generally speaking, licensing requirements cover basic health and safety issues like background checks for providers, adequate safe sleeping space for children, and equipment like fire extinguishers and outlet covers. 

A safe and stimulating home space

Beyond that, providers will need a home space that also meets the needs of multiple children. 

“You want a space that has books in it, manipulative learning tools, an option to go outside,” Sager said. This may be much easier to accomplish in a house than in a small city apartment.

It’s also important to check all zoning laws, homeowner association rules, and lease agreements before starting in-home childcare to make sure you’re allowed to run the business out of your home.  

Costs and pricing

Organizations like All Our Kin and NeighborSchools can help providers with the nitty gritty of pricing, marketing, hiring staff, collecting fees, and other business concerns. There’s no general rule for how much to charge, since pricing is highly dependent on location, but parents often pay a few hundred dollars per week.

However, Sager pointed out some additional costs that new providers shouldn’t forget to factor in. “In the current moment with COVID-19, it’s very important that family childcare educators are protected against any sort of liability,” she said, stressing the importance of liability insurance. “They are really on the front line.” And as long as the pandemic continues, providers should also budget for additional safety equipment like cleaning supplies and PPE.

Self-employment benefits

Since most in-home daycare providers work by themselves, it’s usually best to operate as self-employed, according to Tom Copeland, an expert on the business of family childcare who has written more than a dozen books on the topic.

But unlike other business owners who work from home, family daycare providers can claim any part of the home that’s used for the daycare program as a business expense. That can include the living room for playtime, kitchen for snacks, and bedrooms for naps.

“Most providers are able to count 30 to 40% business use of their home,” Copeland said. “These are expenses they had anyway and now they are turning them into business deductions, which is a significant financial benefit to doing childcare in your home,” he added.

Federal assistance

There are two significant federal programs that can help family childcare providers make ends meet: the Child Care and Development Block Grant and the Child and Adult Care Food Program.

The block grant provides vouchers to low-income families to help pay for childcare. Providers need to meet certain federal requirements in order to accept these vouchers, but they’re fairly minimal, Copeland said.

The food program provides reimbursement to daycare providers for providing nutritious meals to kids in their care. The benefit amount varies depending on whether providers live in a low-income area or serve children from low-income families. But in any case, “everybody is always financially better off by being on the food program,” Copeland said.

Where to find help and community 

Running an in-home daycare can be a lonely job. In most cases, providers work by themselves and are the only adult in the room for most of the week. But there are many places to find support and community.

There are over 400 Child Care Resource and Referral agencies across the country that provide training and technical assistance to caregivers. These agencies work with a national umbrella group called Child Care Aware of America, which also advocates for better childcare policies on behalf of families and providers.

A few states, including California, New York, and Oregon, also have childcare unions that offer support services and organize campaigns for things like higher subsidy reimbursement rates.

Providers should also consider joining the National Association of Family Child Care, the professional association for in-home daycare providers, or one of its state and local affiliates. The NAFCC has a wide array of resources, like guides to developing a business plan.

The association has seen a spike in interest in family childcare since the pandemic began, according to executive director Lanette Dumas. Membership ranges from $45 to $189 per year, but the organization will soon be launching a lower-priced membership tier of just $25 per year for newcomers, she said.

“Especially in the coronavirus crisis, the professionals that are offering these services are really isolated,” Dumas said. “We want to create connections.”

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