How to Open & Operate a Financially Successful Child Care Service

How to Open & Operate a Financially Successful Child Care Service

By Tina Musial

How to Open & Operate a Financially Successful Child Care Service

Copyright © 2007 by Atlantic Publishing Group, Inc.

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ISBN-13: 978-1-60138-115-6

ISBN-10: 1-60138-115-8

Library of Congress Cataloging-in-Publication Data

Musial, Tina, 1973-

How to open & operate a financially successful child care service, with companion CD-Rom / by Tina Musial.

p. cm.

Includes bibliographical references and index.

ISBN-13: 978-1-60138-115-6 (alk. paper)

ISBN-10: 1-60138-115-8 (alk. paper)

1. Child care services--United States--Handbooks, manuals, etc. 2. Day care centers--United States--Handbooks, manuals, etc. 3. New business enterprises--United States--Handbooks, manuals, etc. I. Title. II. Title: How to open and operate a financially successful child care service.

HQ778.63.M87 2007

362.71’2068--dc22

2007025038

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If professional assistance is required, the services of a competent professional should be sought. Neither the publisher nor the author shall be liable for damages arising herefrom. The fact that an organization or Web site is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or Web site may provide or recommendations it may make. Further, readers should be aware that Internet Web sites listed in this work may have changed or disappeared between when this work was written and when it is read.

Table of Contents

Foreword

Introduction

Part 1: I Want to Open a Child Care Center, but Where Do I Start?

Chapter 1: Types of Child Care Centers

Chapter 2: Requirements

Part 2: Getting Started

Chapter 3: Start Up Expenses & Funding

Chapter 4: The Basics

Chapter 5: Federal & State Requirements

Chapter 6: Business Needs

Chapter 7: Promoting Your Business

Chapter 8: Goals & Objectives

Part 3: Open For Business

Chapter 9: Business Policies

Chapter 10: Business Practices

Chapter 11: Accreditation & Education

Chapter 12: Children’s Policies

Chapter 13: Food & Beverage Management

Chapter 14: Emergency Policies

Chapter 15: Going Forward

Conclusion

Appendix A

Appendix B

Glossary

Bibliography

Author Biography

Author Dedication

To Mom and Dad for all of the nurturing, and to Mitchell and Sean for allowing me to pass it on…

Table of Contents

Foreword

By Kathy Feigly

Tina Musial, in How to Open & Operate a Financially Successful Child Care Service, provides an introductory perspective for the budding entrepreneur in the business of child care. The text flows smoothly from one topic to the next as she poses reflective comments on the pros and cons of each dimension of getting started. During the conceptual phase Tina analyzes the different types of programs, locations, and facilities. As the dream of ownership becomes a reality, she guides you toward developing your business plan and meeting your financial goals. In the final stage, she reviews important policies, procedures, and reporting requirements.

Marketing opportunities, administrative considerations, and record keeping overviews are all presented. She elaborates on forming the team necessary to steer a new business down the road to success. Samples of forms and policies are provided to give professionals a jump start, complete with resource lists, contacts, and curriculum suggestions.

In child care you are dealing with a parent’s most valuable possession and, therefore, you must be very thorough in covering all the regulatory aspects and issues surrounding conducting a safe, successful, and developmentally appropriate environment for children to grow.

How to Open & Operate a Successful Child Care Service touches on many of these aspects, as Tina leads you on a journey from conceptualization to realization of a dream and becoming an entrepreneur in the world of child care.

As the founder of Kangaroo Kids Child Care & Learning Center and an experienced child care provider, I found the information contained in this book extremely helpful. For those who want to start a child care business, this book will teach you everything you need to know. Even practiced providers, such as myself, stand to glean some information from this well-written, informative book. Tina has done an excellent job writing a guide for anyone interested in child care services.

Kathy Feigley is the founder of Kangaroo Kids Child Care and Learning Center, which is one of only 7 percent of schools nationwide to earn accreditation by the National Association for the Education of Young Children. She is currently the host of the cable television show, Today’s Child, reaching over 300,000 families. Her past experiences include appearing as a guest on the Regis Philbin cable show and Channel 5 news.

Kathy earned her degree from College of New Jersey, is Vice President of the Early Childhood Directors Association, serves on the advisory board for Raritan Valley Community College, and is Public Relations Chairman for the Branchburg Rotary. For over 30 years she has successfully trained and mentored teachers, coaches, and children in various educational programs.

As publicity chairman for the Branchburg Rotary she has earned Public Relations Awards; her press releases have appeared in Courier News, Branchburg News, and the Somerset Reporter. She is also a contributing author to Physical Education and Sport for the Secondary School Student.

Kathy was named Outstanding Business Person of the Year for Somerset County, has been the recipient of the Somerset County Economic Vitality Award, and the recipient of Governor Whitman’s Bright Beginnings Grant. She has received a Certificate of Special Congressional Recognition.

Kathleen Feigley

Kangaroo Kids Child Care and Learning Center

1047 Route 28

Branchburg, NJ 08876

Phone: 908-231-7800

Fax: 908-231-9847

E-mail: kangarookidsabc@aol.com

Web site: http://kangarookidschildcare.com

Host of Today’s Child

Table of Contents

Introduction

You are looking for a way to earn some money. You may have young children at home, but you do not relish the idea of taking them to child care every day while you work. In addition, with the expense of child care for two, three, or more children, you may owe more in one day than what you even make. On the other hand, you may like children and want to be with children, but do not have a teaching certificate or the time to get one. There is a simple and rewarding way you can be with children and earn a fabulous income: open your own child care center.

A child care center can be a rewarding experience mentally and financially. A small, home center can keep you home with your children, but still earn money in the process. Buying an established child care center will take a lot of capital, but you will also see profits more quickly. Opening a new center with more children can earn you more money since it has new features, new equipment, and young families, but it will also have a bigger price tag and more start up responsibilities.

No matter which type of center you want, or believe is best for you and your situation, this book is intended to give you a complete understanding of the policies and practices you will need to implement to start and run your own child care center. There are resources for specific state information, forms to use, and tips on policy making. The only thing left to do is figure out what type of child care center will work best for you. So let us get started. Get out your pencil, make some notes, and have fun reading about how you can open and operate your very own successful child care center.

You can learn many things from children. How much patience you have, for instance.

~ Franklin P. Jones

Table of Contents

Part 1

I Want to Open a Child Care Center, but Where Do I Start?

Before you can open a business, you need to decide what kind of business you want to run. When caring for children there are several ways to go about doing business. There are different levels of child care centers you can successfully open and operate: You can purchase an existing center, start a completely new center, or operate out of your home.

Each child care center operation has unique features that might work for your financial abilities, family needs, and economical situation. Conversely, each type has features that definitely might not work for your personality or financial situation. You will need to consider all of the pros and cons to each type of child care operation before making any decision or spending any money up front.

Table of Contents

Chapter 1

Types of Child Care Centers

There are different ways to go about running a child care center. First, you can open a home child care where you are licensed to care for a specific number of children in your home. Second, you can purchase an existing child care and restructure it to fit your needs — change services offered, hours, families served, etc. Last, you can open and operate a brand new child care center, with or without a franchise. All three are viable options.

There are also certain things to consider when deciding on which type of business fits your needs the best. Depending on how much capital you have to work with is the biggest determinate of which route you take. However, there are many other variables to consider, too. If you do not have money to invest in building a facility or purchasing an existing one, home child care may be the safest route to go. Start up costs are minimal, especially if you already have children who have toys and supplies for other children to use. If you do not have the start up money, but do not want to stay in your home either, you can find financial backing in the form of an investor or through business loans.

Before deciding on your business style, take into consideration your personality type. Are you comfortable managing and speaking to several people at one time? Can you handle the responsibility of scheduling and training staff members? Do you make a budget and stick to it easily? If you do not mind being the front person for PR, advertising, and leading a business, then a large center could work for you. If you are shy and do not like to manage others, a smaller center or home child care is probably a better choice.

There are many other small details to consider before opening a business: Is there a need for a large child care center in your town? The next town? What size childcare facility can your town support? Who is your competition? Do you have any competition?

Following are some pros and cons in regard to opening each type of center. Of course, each person will have their own preferences, and the decision is personal.

Existing Child Care Centers

An existing child care center may be large or medium sized. For whatever reason, the current owners are selling it, along with the building and its contents. The business may be independent or a franchise.

The Pros of Purchasing an Existing Child Care Center

Purchasing an existing child care center is a wise option if you have financial backing or investors to help you. An established business will cost a lot of money because you are also purchasing the clientele that accompanies it. Getting the clientele and the publicity started for a new business is hard work and time consuming, so having these things established is helpful.

Families in the area might already know about the center and its policies and practices, either firsthand, by word of mouth, or because they drive by it everyday. Since it has already been in the community, chances are some type of marketing and advertising campaign has already been established, and you will just need to expand on it a little.

The child care center will be stocked with toys, equipment, and food. There will be no need to shop for all of the supplies up front unless certain items need updating. Less shopping means fewer start up costs. The less money you spend on equipment can be more money towards programs or payroll in the future.

Another positive note with an existing center is that it will already have a full staff. The decision will be yours if you keep all of them or not. Look through their records and history to help you decide. If they are missing some training skills, like CPR or first aid, you can offer the classes. If they refuse, they can be terminated.

As with any existing business, the policies are already in place. You may need to revise them to fit your style, but a revision is easier and quicker than starting from scratch and reinventing the wheel.

You may have the benefit of a corporate franchise to back you up. Franchises may have a bigger budget, a system for substitute staff member swapping, and money for going over budget, covering unexpected expenses, and fixing problems that may appear in daily operations.

A franchise will also connect you, as the owner, with other people to whom you can relate. Each owner is in the exact same boat, and you have similar problems, situations, and experiences to share. This group may also offer support and encouragement when you need it most.

The Cons of Purchasing an Existing Child Care Center

Negative publicity. If the owners are selling because they have been forced out due to bad business practices or decisions, you may have some PR work to do. Even with advertising new ownership, you may have some trust issues to overcome. The expense of spinning positive marketing and advertising new ownership may make it just as expensive as if you had started with a brand new center.

Also, you may not like the families that are being served by the child care center. If you have families who are delinquent in payment or do not agree with the new policies you plan to implement, you may have to decide if you will excuse them from your services. It will take a while for turnover to reflect your preferred style of families.

Since both layout and location are set in stone you cannot change either one. The layout or location of your building may not be ideal, but you are stuck – at least for a while.

The layout of your child care center may be a little funky and not great for efficiency, but it is what you have to work with. You could always remodel; however, remodeling will cost money and possible shut down time. Shut down time will also cost you money. If you are going to spend a lot of money to remodel, you might want to think about buying brand new and beginning from scratch for the same or close to the same price.

Home Child Care Centers

A home child care center licenses you to care for up to six children in your house. There is also an option to have a group child care center, in which you are allowed to watch 12 children in your home, but you must hire an assistant.

The Pros of Operating an In Home Child Care Center

You get to work out of your home, using toys and equipment you may already have. It is a win-win situation if you have small children, since you can still earn an income and stay home with your children.

A home child care center takes little capital up front. The only start up expenses will be the licensing fees, office supplies, and food. A home child care center is a smart choice when you have little capital to invest.

A home child care center offers the family only one contact person. There is one consistent provider for the child, so his or her routine and schedule do not change, nor does his or her caregiver. Large centers often run shifts of employees, giving the family several different contact people. This can also make for confusion or inconsistent discipline. The small group setting provides more personalized care and the chance for more in-depth one on one time.

Working out of the home gives you the opportunity to write off home expenses on your income taxes. The depreciation of any household items, the cost of electricity, water, garbage, Internet, cable, and supplies can all be written off at tax time, and might add up more money in your bank account.

The Cons of Operating an In Home Child Care Center

You do get to work at home and be with your children, but you also cannot get away. You will have little chance to get out of the house during the day unless you have a vehicle large enough to safely carry everyone. Because you are taking care of other children, your children may miss extra-curricular activities if you cannot readily transport everyone. And you are not able to leave, even if you have evening plans, if a parent arrives late to pick up