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Contracts for Daycare

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Avoid expensive contract mistakes!

For those considering opening their homes as a daycare or starting a daycare center, another item to create is a plan for "risk management". In other words, how your business is going to be run in order to reduce any financial loss.
If you are completely new to the field, you may find yourself wondering, " In what ways could a daycare possibly lose money? " True, while you are not going to be opening a retail store where there is the threat of, say, shoplifting, you are still taking on a certain level of risk.

The easiest way to avoid problems is to have a well written contract.
Unfortunately, there are still many providers who either don't use a formal, written contract, or who don't have a contract that protects them adequately. As a provider just starting out, you need to remember that your daycare is a business. You wouldn't walk into a business in your city or town and enter into an agreement with them for services without a contract. It would put them at risk! This is the same way you need to treat your new daycare operation, whether it is in your home or downtown in a center for 100 children.
In its simplest form a contract is an agreement between two parties. You agree to do something, and in return, they agree to do something. In the daycare field, the provider agrees to provide care for a child and the parent or guardian agrees to pay for that service.

Simple, right?
Not always! Some things to consider when thinking about your contract include:
You should never rely on a verbal agreement for your daycare.
Verbal contracts are technically legal and binding, but are next to impossible to enforce.
Your contract should be as specific as you can make it!
You will want to include details about your rates, hours, methods of payments you will accept, when payments will be due, what will happen if a parent does not pay according to the contract.
Include information for the parent about fees and other charges.
Consider how you will handle parents who arrive late to pick up their children. Will you charge for checks that do not clear the bank? What about parents who find another care provider and take their children elsewhere. Will you require a notice from the parent?
Always ask for pertinent information about the parent/ guardian.
Have a place for full name, date of birth, address, phone number, employer and employer phone number. If the person is not working, you will want to ask for the name and number of a contact person, who will know how to reach the parent if they do leave your service without paying for care.
Get a signature!
In some instances, parents will call with an emergency. If you choose to provide care in emergencies, you need to remind yourself to treat them the same. Get everything signed that will protect you and your income. Treat friends and family with the same professional approach as everyone else. It is unfortunate, but sometimes people we know are the first to take advantage of a situation!

Remember that your contract is the single best way to protect yourself!
It is the beginning point of your risk management. You want the parent to know exactly what to expect from you and exactly what you expect from them. The contract lets the parent know what will happen if the terms outlined are not met.
If someone leaves who still owes money for childcare, be firm. Regardless of the amount due, your business is your lively hood and you deserve to be paid! Sometimes a simple, straightforward phone call is all it takes to collect. If you are persistent, you are more likely to get results.

Don't get discouraged by having a parent or two who don't pay willingly for childcare.

If you prepare yourself in advance for that possibility and build your business practices around reducing your risk, you will do better than most providers. The more professionally you present yourself, the less likely parents will be to take advantage. They will see that you have "done your homework" and know that you have solid business practices.

Most of all, have fun! No matter what happens, you will ultimately grow and learn from every situation. The best part is, you will be enriching the lives of children while you are stretching your own horizons!

To learn more about how to protect your daycare income, click here!

© 2000-2021 Cindy Jones

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