A parent enrolled two children into a Minnesota family child care provider's program and paid a two-week deposit for each child.
A week before the children were to start care, the parent called and said she was staying at her current daycare and wanted her deposit back.
The provider said that her deposit was to be used towards the children’s last two weeks in care and her contract required the parent to give her a two-week notice when the last two weeks would start. The parent is being persistent about wanting her money back.
Should the provider give the deposit back to the parent?
Unfortunately, the provider’s contract did not address what would happen in this situation when the parent never brought the child to care. This makes it difficult to determine whether the provider is entitled to keep the money.
Clearly the provider intended to keep this money if the parent never showed up, but this may not have been communicated to the parent. My advice to the provider was to keep the money since the provider can argue that this payment was to hold the spot open for the parent and that the parent didn’t give her a two-week notice.
How can this problem be avoided?
The use of the word “deposit” to describe this payment is a mistake because parents will think that they can get a deposit back. Call it a “nonrefundable holding fee.”
If you are going to apply the holding fee to the last two weeks of care, make it clear in your contract that this fee will only be applied to the last two weeks of care if the child is enrolled.
In my opinion, any payment made by a parent before enrolling the child that requires the provider to hold the spot for the parent should be treated as a holding fee and should not be applied to care after care begins.
This fee can be a flat rate ($100) or a percentage of your normal rate (25%, 50%, 100%). If the parent doesn’t want to pay a holding fee, you should not promise to hold open a spot.
If the parent wants to enroll her child on February 1st but says she can't afford to pay the holding fee, here's a suggestion:
Tell the parent you will continue to advertise to fill the space in your program.If you find another parent who wants to enroll their child before February 1st, you will call the first parent and tell her you will hold the spot, but only if you are paid something to do so. If you don't find another parent before February 1st, you haven't lost any money and the parent won't have to pay.
How would you handle this same situation?
Tom Copeland - www.tomcopelandblog.com
Image credit: www.zillow.com
For more information see my book Family Child Care Contracts & Policies.
A new child care center just opened in your neighborhood. It offers care for a hundred children (toddlers through school-age) and has a well-equipped playground, a van to transport children, and sparkling classrooms with bright furniture and plenty of toys.
You start to feel desperate, wondering if you’ll ever be able to fill your two openings. “How can I compete?” you ask yourself.
In some ways child care centers have an advantage over family child care. They are easier to find, they have a full staff, their buildings are easily accessible to the public, and they can spend money on advertising.
Some parents are afraid to use family child care providers because providers are along in their home, and parents worry about what goes on behind closed doors.
For these reasons, providers need to work hard to counteract parents’ fears. Here are some suggestions for how to compete:
Childcareinfo.com is a community for family child care providers and parents that offers a wide variety of resources including recipes, a blog, and a newsletter. It serves as a clearinghouse for many online resources (children's activities, training opportunities, equipment, and more).
Childcareinfo.com was created by Minute Menu to offer free assistance that will help the family child care community grow.
Tom Copeland - www.tomcopelandblog.com
Image credit: berkeley.tlechildcare.com
For more information about promoting your program, see my book Family Child Care Marketing Guide.
This means you will need to take yourself and your work seriously and treat the parents as business clients, even if they are also friends or relatives.
You will be most successful if you are able to distinguish and find a balance between the caring attention required for child care and the focus required for managing your business.
Some child care providers find it very difficult to talk about money, rules, or expectations with their clients.
One factor that can greatly complicate this is growing so close to the children in your care that you leave behind your responsibilities as a business owner.
Do your clients respect your business?
Some providers have complained to me that the parents don't treat them like a business. Usually the reason this happens is because the provider doesn't act as if she is running a business.
You can establish a health business relationship by clearly communicating your rules and expectations. Doing so will help reduce and resolve conflicts and bring you the respect you deserve.
Basic elements of a written contract
The most effective way to establish your business relationship with parents is to use a written contract.
You are responsible for setting your own rules. Some states require providers to include certain terms in their contracts. Other than these requirements, you are free to put whatever you want in your contract and to create as many policies as you wish.
At the very least, your contract should contain these four basic elements:
Names of the parties: your name, the parents' names, the names of the children
Terms of the contract: There are two terms in a contract that are enforceable in court -
Time - The hours and days you are open
Money - How much parents owe your for your services: when payment is due, late fees, registration fees, field trip fees, etc.
Termination procedure: How will the contract end
Signatures: Both parents (if around) and yours
If you need help with writing a contract, there are a variety of sample contracts available to choose from.
First Children's Finance has posted a number of tools and resources about contracts on their website. They include a sample contract template, a contract termination form, parent interview form, parent evaluation form, and a number of articles on writing and enforcing your contract.
My book Family Child Care Contracts & Policies has a simple one-page contract as well as a CD with many different contract and policy examples you can cut an paste in a Word document to create your own.
Redleaf Press publishes a two-page contract template with carbon copies.
The contract is your primary tool to set your hours and rates and spell out how it will end. Review it once a year to make sure it meets your needs.
Tom Copeland - www.tomcopelandblog.com
Image credit: nakaliconsulting.com
For more information, see my book Family Child Care Contracts & Policies.
This is a simple goal that I think all family child care providers, parents, and organizations in the child care field should support.
State laws vary greatly, so the definition of illegal care will vary from state to state. We may never achieve consensus among the states about the specifics of child care regulations, but I hope we can agree that a child care program that operates in violation of their state law should be shut down.
My definition of illegal child care does not include child care that is exempt from state laws, that is, care that is not required to be regulated by the state (kith and kin, relative care, care for one family in some states, and so on).
When I speak about illegal care I am also not including state regulated child care providers who are in violation of a particular state rule (for example: over enrollment on one day).
Throughout the country, illegal child care is widespread. I could open up an illegal family child care home in any part of the country, and practically nothing would be done to stop me from operating.
Illegal child care is unfair competition to those program who do follow the rules. It undermines the reputation and quality of care for the entire child care field.
Unfortunately, the child care field is reluctant to address this issue. Parents are not going to lobby to drive out illegal child care. Politicians won’t act unless pressured by the public.
Since I believe that everyone in the child care field agrees that children should not be cared for in an illegal setting, it is up to us to take action for the sake of these children.
Our goal should be to end the practice of illegal child care. Persons who are currently operating illegally should either become regulated under state law or should be shut down by local authorities.
I propose a two-step plan for addressing this problem.
Step One: Education
Since some parents and illegal child care providers do not understand what is and is not legal, I recommend that these organizations initiate a community education campaign.
This campaign should educate parents and child care providers about the benefits of regulated child care. It should also define the differences between illegal, exempt, and regulated care in the local area.
One example of a local activity might be to insist that all classified ads in local newspapers and online referral services such as Craigslist post a definition of what is legal child care and forbid illegal caregivers from advertising.
This education effort should also include a plan for how the public can report illegal child care providers and what local regulatory agencies will do in response.
Ideally, local authorities should inform illegal child care providers that they must become regulated or shut down their operation. If a child care provider refuses to shut down, local authorities should take legal action to enforce the law.
Family child care providers should work through their local associations to establish a cooperative partnership with their local Child Care Resource and Referral agency and their local child care regulatory agency to pursue this public education campaign. State and national associations such as the National Association for Family Child Care should also assist local campaign efforts.
Step Two: Enforcement
What should happen if child care associations do not receive cooperation from local regulatory agencies? Regulatory agencies may not be willing to take actions that leads to the shutting down of illegal child care programs because of budgetary or other reasons.
If this is the case, child care associations should discuss what further actions can be taken with their local police department. Turn over the names of illegal programs to them and ask that they be investigated and fined. After all, it's against the law!
If none of this effort leads to effective action against illegal child care, I recommend that child care associations report these illegal caregivers to the Internal Revenue Service.
It is quite probable that illegal child care providers are not reporting all their income to the IRS. I have spoken with IRS officials about this issue and they have indicated that they do want to hear about illegal child care providers so they can recover unpaid taxes.
You may call the IRS criminal investigation informant hotline (800-829-0433) or you may write to the IRS to report an illegal caregiver. No matter which method you choose, your name will be held in confidence by the IRS. If you wish, you do not have to identify yourself when turning in an illegal caregiver.
If you write to the IRS, you can use IRS Form 3949-A Information Referral that asks you to answer a few simple questions about the illegal child care provider. You do not need to know the illegal child care provider's Social Security number or have proof that the person is not reporting all their income.
You may also simply write a letter to the IRS instead of filling out this form. Send your correspondence to Internal Revenue Service, Fresno, CA 93888. Again, you do not have to identify yourself in your letter.
An IRS official has informed me that they are more likely to investigate if they hear from more than one person. Therefore, I suggest the child care associations have several different members of their organization fill out Form 3949-A.
If the IRS investigates and determines that the illegal child care provider did not report all her income, they will take action to collect this unreported income. This will put pressure on the provider to become regulated or to shut down.
Are there illegal child care providers in your community? What are you doing about it?
For more, see "How to Report Suspected Fraud Activity?"
Tom Copeland - www.tomcopelandblog.com
Image credit: digoutreach.blogspot.com
You've tried a variety of things to fill these openings, but without success.
You conclude that perhaps the reason you aren't having success is because your rates are too high, and so you are considering lowering your rates to attract parents.
Is lowering your rates a good idea?
The short answer: probably not.
Parents looking for child care have a lot of programs to choose from: licensed/regulated family child care, illegal child care, kith and kin, child care centers, Head Start, school age care, etc.
There is an extremely wide range in the cost of care among these programs. This is also true among licensed family child care.
It's a bad idea to compete based on the cost of your care because there is always going to be someone charging less than you. You don't want to promote yourself as "the cheapest care in town."
Compete on Quality, Not Price
Instead of lowering your rates, you might consider offering a short-term discount to attract new families:
"$30 off the first week of care if you enroll by the end of this month."
"No registration fee for new families this month."
"Free night of evening care for a parents' night out for all new enrollees."
In the long run, however, you should be competing based on the quality of care your program offers parents.
Parents will pay more for child care if they can see the quality/value of your services. You need to be communicating the benefits of your program, so parents can see what they are paying for.
In my opinion, the problem with rates in family child care is that too many providers aren't clearly communicating their benefits to parents.
Here are some examples of what to say to parents:
"I am an experienced preschool teacher who offers a child-center curriculum with planned learning activities and weekly themes."
"I offer informal care that allows your child to explore and be creative. My loving approach will help your child learn and be ready for school."
"I provide an enrichment program that will expose your child to other cultures."
In the end, the price of your services should be directly related to the quality of your care. If you offer average quality care, your fee should be an average fee.
But, if you offer high quality care, your rates should reflect this!
Under what circumstances should you even consider lowering your rates?
Maybe if you are cutting your hours. Or maybe if your rates are currently in the top 10% of rates in your area and you have had a number of families turn you down or leave your program because of your rates.
But, I believe your rates are about right if occasionally a parent leaves your program because of your rates.
Note: If your mission is to service low-income families then it is logical to keep your rates low.
I'm hosting a webinr: "Successful Strategies to Market Your Program" this coming Tuesday, November 18th. I will be discussing how to identify the benefits of your program and look at specific ways you can use the Internet in your marketing efforts.
Tom Copeland - www.tomcopelandblog.com
Image credit: bestsalestalent.com
See my book Family Child Care Marketing Guide.
Let's say you were audited and now it's over.
Is there anything more you can do about it?
The answer is Yes in two situations:
Amend Your Return
If you were audited for 2013, 2012, or 2011, you can still amend your tax return and fight again! It seems too good to be true, but it's not.
I've spoken with many family child care providers who were audited, but were not satisfied with the result.
* They believed their tax preparer didn't offer them much assistance,
* They didn't realize until later that the auditor was wrong about certain issues, or
* They didn't claim all their deductions because they didn't know they could deduct them or how to present the best evidence for their deductions.
You can amend your tax return back three years from the date you filed your tax return, even if you were audited for one or more of those years.
To amend your return, file IRS Form 1040X Amended US Individual Tax Return. If you have the adequate records to claim deductions you missed, don't hesitate to amend. I also have a chapter in my 2014 Family Child Care Tax Workbook and Organizer about how to file IRS Form 1040X.
The second situation where you can challenge your audited tax return is to file for Audit Reconsideration, if you are not satisfied with the results of your audit.
The two situations where you can use this process is when you have not paid in full what you owe the IRS, or if you have information about your return that you did not previously submit to the IRS.
In my experience, providers often do not submit all the evidence they have to claim all of their business deductions. This could include deductions that were never originally claimed (because they didn't know they could) or deductions that were denied, but the provider had other evidence she didn't submit.
The IRS flyer "The Audit Consideration Process" describes the details in how to file for audit consideration.
If you are currently making payments under an installment plan with the IRS, continue to make your payments during the audit reconsideration process. If you are having trouble making your payments, contact the IRS Taxpayer Advocate Service.
I Can Help
I can provide help if you are audited by the IRS, or if you are considering using either of the above two options after your audit was completed.
If you are a member of the National Association for Family Child Care, I offer free IRS audit help as a member benefit. See here for more details.
I can also provide assistance if you are a member of The Child Care Business Partnership. This Partnership is for providers who have the Minute Menu Kids Pro software. You can get a free 30 day trial of the software. Members receive one-on-one technical assistance and instructional videos from me on how to more effectively utilize this software to save you time and money on your taxes.
If you join or renew your membership in The Child Care Business Partnership before December 31, 2014, you will be eligible for a drawing for a copy of either my 2014 Family Child Care Tax Workbook and Organizer (for those who do their own taxes), or my 2014 Family Child Care Tax Companion (for those who use tax professionals).
In either situation, I can advise you whether it makes sense to either amend your tax return or file for Audit Reconsideration. I can also explain how to organize your records to make the best possible case to the IRS.
So, the message is: There is life after an IRS audit.
Tom Copeland - www.tomcopelandblog.com
Image credit: busysuperva.com
You are competing against other family child care providers, child care centers, school-age programs, Head Start, and unregulated caregivers.
When competing against unregulated caregivers, you have some special challenges.
I am defining unregulated caregivers (also called exempt care, kith and kin, relative care or informal providers) as those who are not in violation of state child care licensing rules. They don't have to follow all of the regulations that a licensed family child care provider must follow.
I'm not talking about child care programs that operate illegally, in violation of licensing rules. I believe illegal providers should be convinced to become regulated or they should be forced to shut down. See my article, "A Plan to Eliminate Illegal Child Care."
Parents use unregulated caregivers for many reasons: it's usually cheaper, it may be provided by a relative, or they may know the caregiver from their community. Some parents don't know the difference between regulated and unregulated care.
You should assume that when a parent looking for child care contacts you, she is also considering using an unregulated caregiver.
Here are some suggestions for how to compete against unregulated caregivers:
Safety - Parents' number one concern about child care is safety. Therefore, when talking to prospective parents you should emphasize that being regulated means you and your home have passed a series of safety tests, including criminal background checks, first aid and CPR training, fire department inspections of your home, and adherence to safety standards, such as the proper storage of hazardous materials in your home.
Say to the parent, "If you are considering enrolling your child in another home, ask if that caregiver is licensed. If not, ask if they are trained in CPR and first aid? Do they have any history of criminal activity or sexual abuse? Do they have an emergency evacuation plan?"
Fees - Informal caregivers probably charge less, perhaps significantly less, than you. Do not try to compete on the basis of price. There will always be providers with lower rates than yours, and you can be successful even while charging higher rates.
Say to the parent, "If you are looking for the cheapest care in town, that's not me. My rates are based on the quality of care I offer and the safe and healthy environment I provide for your child."
Value - Stress the value of your services by promoting the benefits of your program. Tell the parent what advantages you offer to children that unregulated programs don't offer.
Say to the parent:
"I offer a variety of planned learning and play activities that will help you child be ready to succeed in school."
"I have specialized training in child development so I can respond quickly to meet your child's needs."
"I offer special services (piano lessons, second-language exposure, numerous field trips, computers, etc) that will enrich your child's education."
Parents who can see that you offer high-quality child care will pay for it. It's your job to show them. See my podcast, "How to Identify the Benefits of Your Program."
You can't appeal to every parent. Some will always pick the cheapest care. Let those parents go. People usually get what they pay for. Parents who pay bargain-basement rates will get bargain-basement care.
What ideas have you used to compete against unregulated caregivers?
Tom Copeland - www.tomcopelandblog.com
Image credit: medimoon.com
For more marketing ideas, see my book Family Child Care Marketing Guide.
Your newsletter can contain lots of different kinds of information: weekly menus, children’s art work, learning activities, parenting tips, new policies, introduction of new children and farewells to those moving on, upcoming birthdays and anniversaries, payment reminders, upcoming activities and special events, etc.
You can produce your newsletter on a computer using a variety of typestyles and scanned-in photos. You can find free newsletter templates and helpful links at http://www.freenewsletter-templates.com/.
Don’t worry about trying to produce a fancy newsletter. The most important thing is for your newsletter to look clean and interesting and be readable.
Many providers produce their newsletter once a month, but you can decide whether you want to send one out more or less often. Pick a schedule that is comfortable for you.
It might be a good idea to send your newsletter quarterly at first and then switch to monthly as you can, rather than starting with an ambitious schedule and failing to meet your own deadlines.
Send your newsletter to all current and past clients, parents who called or visited your program but did not enroll their child, any parents on your waiting list, and your friends. Everyone who receives your newsletter can help you promote your business through good word of mouth.
To save money and use less paper, you can distribute your newsletter through e-mail as a PDF document. You can find simple instructions on how to create a PDF file at: http://tinyurl.com/npasfg.
Several commercial parent newsletters are available for providers. They include a variety of activities parents can do with their children. You can pass on copies of these monthly newsletters to your clients or use some of the articles in your own newsletter.
Here are some links to a variety of family child care newsletters:
How do you use parent newsletters?
Tom Copeland - www.tomcopelandblog.com
Image credit: www.daycarema.com
This article was taken from my book Family Child Care Marketing Guide.
"What does your program offer that others don't?"
These are the two key questions parents think about in their search for a child care provider. Your ability to answer these questions will have a lot to do with whether your program will be successful in the future.
To learn more about how to promote your program, listen to my November 18th webinar presentation on "Successful Strategies to Market Your Business." Register here.
The webinar is sponsored by the National Association for Family Child Care.
I will cover:
* Using the Internet: Facebook, Craigslist, child care forums, free online classified ads
* How to identify the benefits of your program and promote them to parents
* Successful marketing strategies with prospective parents, current parents, and past parents
The webinar starts at 8:30 pm Eastern time. During the 1 1/2 hour webinar participants will watch a power point on their computer and listen to me explain how to successfuly promote your business. You'll have the opportunity to ask me questions live and you will receive a copy of the power point, plus handouts.
If you've never attended a webinar from your home you've missed out on a fun learning opportunity!
The cost is $25 (100% tax deductible!) if you are a member of NAFCC ($60 for nonmembers) Membership in NAFCC is $35 a year. For questions, contact Mandi Hardy at 801-886-2322 (ext. 225); email@example.com. To register.
If you are not a current member and would like to take advantage of the many wonderful benefits that NAFCC has to offer, please visit the website http://www.nafcc.org and click "join now" under the membership tab.
Image credit: www.webprofits.com.au
For more information about marketing, see my book Family Child Care Marketing Guide.
* A licensor walked around the back of a family child care provider's home and saw the provider texting on her phone while children were playing. The provider kept her head down texting for ten minutes before she noticed the licensor watching her.
* A provider posted a series of negative comments about the children in her care to her "friend" on Facebook. The "friend" copied the comments and sent them to her licensor.
* Here are some comments by family child care providers venting on the Daycare.com forum:
"I'm so depressed and overwhelmed right now."
"I'm exhausted this week. I can't seem to sleep much at night."
"I'm going stir-crazy!!!!!"
"I've spent most of the past two weeks on the verge of tears."
There are times when we've all felt these emotions. Talking to our family and friends about our feelings is entirely appropriate.
However, if you write them down and post them on the Internet, even seemingly innocently expressed feelings have the potential to bring you harm.
In an earlier article I shared the advice from a lawyer about being careful about what you post on Facebook, or other social media. Statements such as, "I feel so frustrated today with the children," or "I don't know what I'm going to do about this child" can be viewed by your licensor as a sign that it's not safe for you to be around children.
I've received calls from family child care licensors who are concerned that providers who are posting on Facebook throughout the day are neglecting their children.
I believe it will become increasingly common for licensors to monitor your Facebook usage during business hours. This could lead to negative licensing actions for providers who over use Facebook.
The state of New York recently instituted a new licensing rule to address this situation:
"The use of any type of device for social or entertainment purposes, listening to music on headphones, playing screen games, using the Internet, or making personal calls by caregivers while supervising children is prohibited. Use of any devices for brief and necessary communications or purposes directly related to the child care program such as communication with parents or the Office and its representatives is allowable."
I believe it's likely that in the future we will see similar rules adopted in other states.
You can use social media as a positive tool to promote your program, share ideas with other providers, and learn how to improve the quality of your program.
At the same time, over-use of this technology, or not realizing that the comments you make over the Internet are permanent and can be seen by your licensor, can get you into trouble.
So, be smart about how you use social media.
Tom Copeland - www.tomcopelandblog.com
Image credit: www.business2community.com
Join the hundreds other family child care providers who are reaping the benefits of The Child Care Business Partnership.
December 31, 2014 is the deadline to join or renew your membership in the Partnership and be entered into a drawing to win either book of your choice.
If you are using the software Minute Menu Kids Pro, you can join the Partnership and receive the following benefits from me:
* Technical assistance on how to use the record keeping features of Minute Menu Kids Pro so you can save time and reduce your taxes.
* Regular instructional videos where I give detailed directions on how to use Minute Menu Kids Pro effectively. Here's an example of one of these videos:
Here's another video: End of Year Reports
* Extensive assistance if you are audited by the IRS.
* Answers to all your business questions, and more.
I've provided help to many members of the Partnership this past year that have saved them a lot of money on their taxes - and reduced their time spent record keeping!
Win one of my 2014 tax books!
If you join or renew your membership in The Child Care Business Partnership before the end of December, 2014 you will be entered into a drawing to win a copy of either my 2014 Family Child Care Tax Workbook and Organizer (for those who do their own taxes) or my 2014 Family Child Care Tax Companion (for those who use a tax preparer).
I will pick three lucky winners on January 1, 2015.
The cost to join or renew is $15 a year - 100% tax deductible!
Money back guarantee: If you join or renew your Partnership membership I guarantee you will save the annual fee of $15 on your taxes each year, or your money back!