While I think smoking is disgusting and unattractive, I do believe that if one chooses to pollute their lungs and end their life early, this is their personal decision. If she is not smoking around the children ie: in the house with the children, or directly beside the children, I really don't see why this is an issues - let alone report her. Should you really report her, risk her losing her business, over a cigarette? I don't think it's worth it. And I really don't think it's a big deal. Don't get me wrong, I hate smoking, if one of my parent smokes, they aren't allowed on my property with a cigarette, whether or not we're outside. But seeing as how this is the first time you've seen her smoking, maybe she was taking a stress releif while her husband took care of the kids. I highly doubt it's an issue.