Start Up Questions

I am in the planning stages of opening my own home daycare (would like to open the beginning of July) and have a few questions.

First, a bit of background: I am a mother of two (9 and 6) and recently divorced. This will be my main source of income (I do receive some Child support to help out). I know having this as my main source of income will be challenging, but I believe with proper budgeting and planning I can do it. I have always wanted to do this and now I have decided I am going to take the leap and do it. My mother has her own in home daycare (and has since I was a baby), so I grew up in the home daycare environment.

My questions:

- I understand the new ratio rules under Bill 10 (or at least I think I do), but does that include my Foster child(ren)? I am open to receiving 1-2 school age Foster children, so they would be here before and after school. Will that affect my ratios, or will they be included as my own children (and not affect my ratios if over the age of 6?)

- There are a lot of "under the table" babysitters in my area (small town), and I want to stay competitive with them, but offer the added benefits of being a business and issuing tax receipts, proper contracts, etc. I am thinking of charging $2 or $3/day more (they charge $25/day, so I would charge $27 or 28/day) in order to cover the taxes I'll have to pay. Does that seem reasonable? Or will I have issues finding families?

- Do you usually offer family discounts? My mother only charges half price for additional children in the same family, and is just something she has always done, but I think that will be a big hit to my income if I only get families. What do you do? I was thinking of a smaller discount, but not half price. (maybe $5/day off for fulltimers)

- Are there any other benefits to registering as a business rather than just using the BIN instead of SIN on receipts? Or should I start as unregistered and then maybe next year register a business name? I am fine with just running it under my personal name.

- Do you HAVE to have a playroom? We live in a one-floor 3bedroom/2bath ranch-style home and do not have the space for a separate play room. We have always used the living room as our play area (and kept the majority of the toys in bedrooms). One day when I can afford it I would like to finish our basement, but right now it is an unfinished cement cold land down there. Is that okay? (I do have a large fenced in backyard that will be used often).

- Other than Registering a Business name if you choose to, is there anything else to Register for? Or can you just start issuing tax receipts under your own name without registering anything (and just submit this as income on your taxes)?


Thank you!!

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Originally Posted by Grover

- I understand the new ratio rules under Bill 10 (or at least I think I do), but does that include my Foster child(ren)? I am open to receiving 1-2 school age Foster children, so they would be here before and after school. Will that affect my ratios, or will they be included as my own children (and not affect my ratios if over the age of 6?)

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All children in the household count. Foster children effectively are your children until they move on. Here in PEI, our own children count until they are 12 years old even if at school the whole time.

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- There are a lot of "under the table" babysitters in my area (small town), and I want to stay competitive with them, but offer the added benefits of being a business and issuing tax receipts, proper contracts, etc. I am thinking of charging $2 or $3/day more (they charge $25/day, so I would charge $27 or 28/day) in order to cover the taxes I'll have to pay. Does that seem reasonable? Or will I have issues finding families?

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Lot of under table carers everywhere. I don't worry about what they are doing since if they breaking one rule, likely to break others like ratios. Charging just a couple dollar more is more than reasonable. I am about $10 more than cash carers.

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- Do you usually offer family discounts? My mother only charges half price for additional children in the same family, and is just something she has always done, but I think that will be a big hit to my income if I only get families. What do you do? I was thinking of a smaller discount, but not half price. (maybe $5/day off for fulltimers)

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Up to you. I not offer discount. My income isn't great after expenses barely min wage if full. Here it full price for all. If they not want pay full price, they can go someone else.

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- Are there any other benefits to registering as a business rather than just using the BIN instead of SIN on receipts? Or should I start as unregistered and then maybe next year register a business name? I am fine with just running it under my personal name.

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Unregistered day home not same as unregistered business. Dayhome don't need business reg but you right, without business reg number, you will be expected to provide SIN on receipt. Some do register business so not have to give out SIN.

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- Do you HAVE to have a playroom? We live in a one-floor 3bedroom/2bath ranch-style home and do not have the space for a separate play room. We have always used the living room as our play area (and kept the majority of the toys in bedrooms). One day when I can afford it I would like to finish our basement, but right now it is an unfinished cement cold land down there. Is that okay? (I do have a large fenced in backyard that will be used often).

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For unregistered home, not need a separate playroom. For registered, it depend on provinces regs. Here we must have sleeping area separate from activities and under 2's separate from older when napping but if unregistered home, not needed. Fenced in yard is only required if registered too but check regs for your province.

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- Other than Registering a Business name if you choose to, is there anything else to Register for? Or can you just start issuing tax receipts under your own name without registering anything (and just submit this as income on your taxes)?

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Yes - unregistered business day home can just issue receipt under own name and submit as income on taxes but you will be required to give SIN on your receipt.

I am in ontario and not registered as a business nor with an agency. I claim my income every year and have never had to hand out my SIN to my clients.

You don't necessarily need a playroom but I think you do need a play area and have age appropriate toys and equipment etc. that is appealing.

I would never give a sibling discount. It's kinda like showing up at the gas station and asking for 1/2 off your tank of gas because, hey, you own two cars. Ummmmm.....no. It isn't any cheaper to care for a sibling and in fact puts you out not one, but TWO spots at once when they leave do it actually makes them higher risk clients.

Thank you!

Suzie_Homemaker - I am pretty sure in Ontario is different from PEI. Everything I have read says only children under the age of 6 count towards the ratios. Maybe there are others in Ontario who could confirm that for me?

Fun&care - very good points!

I am in Ontario and also a foster parent. Yes foster children COUNT AS DAYCARE CHILDREN not as your children. So your foster care kids count till age 10 now and then when Bill 10 comes in they will count until age 13yrs. I do not offer a family discount. A spot is a spot. U don't have to reg as a business. Just issue receipts every jan or end of yr. I never give out my SIN unless asked. I've only been asked twice so far. No playrm needed. But set up a corner in your living rm with books and age appox toys. Also if the basement is safe, or block off unsafe areas with gates.....on a hot summer day it will be nice and cool to go down there and use ride on toys, just make sure kids wear shoes. That'll b fun when it's raining too and u can't get out. :). Have fun. Feel free to ask any more questions u may have :)

Thank you for clarifying on the Foster children! That will be an impact and I may just have to always have at least one spot free to account for always having at least one foster child. (Have spots for two, but only doing one at a time right now)

We already have a corner of the living room as our reading nook, but since my kids are older now there aren't as many toys. I will work on a set up for the daycare kids of course.

Thanks again, I appreciate the info, advice and suggestions!

Where abouts are you in Ontario? What is the going rate for an actual home daycare (not the under the table sketchy ones you mention at $25 a day). I would just worry that being the sole income for a family of 3 (plus foster kids)...and having to leave at least one daycare space open at all times (for a foster child) leaves you with little to no income at all. You can have 5 kids, minus one for a foster child spot. That leaves 4 potential openings for daycare children. That is 4x27 (what you mention above). That is only $108 a day. Minus taxes and CPP. Minus food and minus any craft supplies, toys, daycare equipment, cleaning supplies, toilet paper, and house expenses.

Can you live on that much money? Where I am you couldn't even pay rent in a tiny, one bedroom apartment with what money you would have left after expenses...let alone food and costs of living and children.

I know there are others on here that do this as the sole income and have children. Maybe it can be done, but if I see a lot of concerns here that would have me very worried about starting out! Not to mention it often can take months to fill your spots when you first open, many months in some areas. Are you situated to have no income come July...and minimal income until the fall if your spaces don't fill up?

Not trying to dissuade you or sound mean here...just trying to ensure you have planned for the worst case scenario before taking this career move!

Lee-Bee.. no worries, thank you for bringing up some important points!

Right now I am looking over the numbers to charge $27/day and have 4 fulltime spots. I also receive child support, CTB and will be getting UCCB again come July to help out with my own children's costs (which will account for an additional $920/month). I also get a small amount for fostering to cover the expenses of the child in my care which helps.

I plan to put a portion of the daycare income away each week to help cover taxes and CPP, so I am debating on whether to charge $28/day to help out a little more (need to ask around more in my community, all the moms I know pay $25 under the table). I am thinking about $50/week should be set aside for taxes and CPP, but I am really not sure if that is enough/too much. I might need to talk to an accountant about that.

My mortgage is pretty good (small town, we have good prices and low property tax), so I am only paying $700/month total for mortgage with property taxes included (3bd, 2bath, 1300sqft brick ranch), then $300 total for my utilities. That leaves the balance for my other expenses and savings.

It is looking doable on paper, I would have to stick to a strict budget, but that has already become a habit since becoming a single mom. It will be tight if I lose a child and don't have a replacement right away, which is where the safety net fund will come in. But, I am also making it clear I need notice so I am hoping that helps find replacements as children leave. My mother never had an issue keeping her spots filled in this area so I am hopeful it is the same for me as long as I get my name out there and network with the other daycares in the area as well. It is a small community, so word gets around pretty quick (about anything).

I am planning to start up in July and currently I work full time at a decent paying job (but oh so boring), so I am going to be purchasing things needed and stocking up on some items while I have my full regular pays right now, then I will have my vacation pay out when I am done here as well to help get me through summer.

I am also planning on posting my openings as soon as I decide on my rates and finalize my paperwork so I can get the word out there right away to get some kids lined up for July. I may have to take more older kids for summer just to fill spots then keep postings up for younger kids for September.

It is going to be a challenge the first little bit, but I am trying to plan out as much as possible financially so I can prepare myself as much as possible.

Was also thinking like lee-bee. 27$/day seems so low for ont. Avg is 35-50$ a day. What city r u in?

I am in a small town about 45 minutes from London. Population 2000 :)
I know three home daycares in my area that all charge $25/day. They are all under the table though.