Avoiding the Biggest Mistakes in the Daycare Business

by admin on January 18, 2009

Everyone who starts a home-based daycare business is always full of hopes that the endeavor will take off and be successful. Knowing that one has a deep passion for caring of children, has a huge reservoir of patience, and has the ability to multi-task will be a sure-fire formula for success only to discover later that something is wrong because the business does not proceed as expected.

Many things can go wrong in the daycare business as they had gone wrong in any other type of business. If an MBA holder can commit mistakes in running a business, the same could happen too to a plain housewife who is out to eke out an extra income for the family by going into the daycare business. But costly mistakes can be avoided with the necessary study and preparation before one plunges into the daycare business.

The following are the costly mistakes in the daycare business and how they can be avoided:

Mistake 1: Failure to do the necessary research on the child care market.
Having a home-based daycare business is no excuse for not doing a market research in the area where you intend to operate. It is not enough to put up your business, obtain the necessary supplies and expect everything to turn out right. A clear understanding of the needs of the market is needed for you to come up with a business plan that will take advantage of such needs.

Simple questions asked over the phone to the area’s child care businesses or personal visits will give you an idea of how they operate and what kind of special services they provide. By asking neighbors and friends, you will also discover the needs of the parents in the area such as daycare for their children between school and the arrival of the parents at home. If you discover that other daycare centers do not provide such kind of service or hour of operation, you could adjust your daycare hours to fill such void.

If you plan to operate your daycare center from 6:00 a.m. to 3:00 p.m. and you learned through your market research that almost all daycare centers in the area operate during those hours, it will be a costly mistake on your part to schedule your operations on the same time slot.

Mistake 2: Inadequate liability protection for your business
You are operating your daycare center out of your home and you have only homeowner’s insurance policy, it will be a costly mistake to assume that you are properly covered. Your homeowner’s insurance will not cover any accidental injury sustained by a child under your care nor will it protect your business in case a power outage prevents you from doing business for a day or so.

You need to inquire on what kind of insurance coverage you will need to protect you and your daycare business. A business liability insurance for a daycare business is not very expensive but it will give you the peace of mind knowing that you are covered in case of any eventuality in your business operations.

Mistake 3: Not charging the correct fees
Charging the lowest fee you can think of in order to attract clients is a recipe for business disaster – you are headed to failure. If your fees will not be able to sustain your business operations, what is the point of going into business? Charging exorbitant fees on the other hand will make clients shy away from you. So what is the middle ground? You will arrive at the answer only after conducting a market research in the area. You have to find out how much other daycare centers are charging and set your charges somewhere in the average rate. You may offer a little less rate to attract new clients but you cannot make it too low to make your quality of service suspect.

Mistake 4:
Absence of policy handbook and contract
You do not make a verbal contract with your clients; everything must be in writing. This is the only way to protect you and your business from clients who will claim later that you agreed to provide a particular service for that particular amount of money. A policy handbook will make it clear to parents the extent of your responsibility and liability towards their children. This will save you the headaches of litigation that may arise later.

Mistake 5: Not marketing your business properly
Clients will not come knocking at your door; you have to search for them. There are many ways of finding clients for your home-based daycare business and these are not complicated processes that will require savvy marketing efforts. They are simple marketing techniques that start-up daycare center owners can use.

You must register with the Child Care Resource and Referral Office in your locality by going to www.childcareaware.org which will give you the organization’s local office in your area. The second option is by requesting local schools to include your business in the list of Childcare Providers that they maintain. Also, you can let everybody you know about your business and you may also place an ad in community newsletters and local papers.

Mistake 6: Failure to utilize free resources in your community
State , county, or city governments usually have offices that are in charge of daycare center operations. They also have programs that aim to help or support start up daycare centers through grant money or any other form of assistance. By simply checking online, a start up daycare business owner can find all opportunities to get such grant or assistance provided by these government units or even some private organizations.

Mistake 7:
No license or certification from the state
Licensing or certification by the state is very important for it will show that you are really capable of running a daycare business. You will discover in the course of your operations that prospective clients will be asking you for your license or certification. Such license will give parents the peace of mind and the confidence of entrusting their children to the care of your center.

Starting a home-based daycare center is not easy so do not complicate it further by committing the mistakes above-mentioned.

See: How to start a daycare business

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Tom Shieh has written 323 post in this blog.

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