Need to terminate childcare b/c of fees... any suggestions?

I just started my home childcare business last fall and signed up with a Home childcare agency to get set up since i have no formal training for childcare (ECE). All they do is set up the parent, take the money and send me a cheque every month.

I currently have a 22 month old child who has been with me since I started with the agency and she is subsidized care. You don't get much pay being affiliated with an agency and I have noticed that our finances are suffering because of this. I have decided to care for a private child as of May 2nd and need to terminate care for this child through the agency. I will be receiving an additional $10 per day for this private child and eventually I would like to go fully private.

It's unfortunate that i have to let her go, but I have to look out for the needs of my family and the agency's paycheques are just not paying the bills. How do I let the parent's know that I need to cancel care for their child? This child has a few issues with pinching the other children and the mother did kind of abuse the pick-up/drop-off times for quite a few months but that been getting better. I want to leave the care on good terms but now sure how i can.

I also have 2 other children that I care for from the agency and i don't want to jeopardize their care. I have a few issue with this family as well because they are asking that I be "on call" for 2 days a week for evening care, which really cuts into our family time. But I wouldn't be getting the income from their care if I didn't agree to this situation.

PLEASE HELP as I need to give her notice next week.

Thanks,
Sarah

Being honest with the family is best. Tell them you need to take a child that is not with the agency because the pay is higher which will allow you to meet your family financial obligations but because of the age of the new child it would be in violation of the age restrictions. You are sorry but you have notified the agency about the situation but wanted to speak with the family personally so that they know it is nothing about them. I would keep all complaints to yourself and let them leave on positive terms. Tell the family in the morning at drop off and then call the agency right after to tell them the effective date. Do not be surprised if they pull the rest of the agency children too and give them to other caregivers in the agency so be prepared for that.

Thanks for your reply.

I have since let go of this child and notified the parents when they dropped her off and gave her two weeks notice. I also notified the agency but told them that I had this child confirmed for quite a while (which is kinda the case...long story) so they understood and I am on good terms with the agency but not the parents. I didn't see the mother dropping off her daughter for the last two weeks (she was upset that i had cancelled her care). But she found another daycare home in my area through the agency.
I really didn't want to end her care on bad terms but my family comes first and we have benefited from the extra income that this switch has created and I have been able to afford to buy more things for the kids.