Thanks everyone, I've got my letter drafted up and will be telling families at the end of the month to give them the Easter break to digest the news. Seemed like a good time to me, instead of causing panic over the too short weekend or during a work week. Here is what I have written, would love feedback!

"After much consideration, I have made the decision to reduce my dayhome business, effective August 31, 2013. I have enjoyed being a part of the lives of your families, and am honored that you chose me to care for your children. However, I am at a transition point with my own family, where Eli will soon be in school full time and I will be returning to full time work outside the home. In light of this impending change, I will be reducing the number of children in my care so that I am able to take on more volunteer activities with Eli at school, and so that I can start taking on more contracts with my Adoption Assessment field of Social Work. As such, I have decided to continue providing care for only my two original children in order to provide the flexibility I am looking for at this time. I hope that this notice is able to provide everyone with plenty of time and opportunity to find alternate care. If you are find suitable replacement care earlier than the end of June and wish to start transitioning your child to that care center, that is completely understandable. I wish for this change in your family’s life to be as smooth and comfortable for everyone as possible.
I have sincerely loved caring for your children, and working with you all as parents. I wish you all the best in the future; Eli and I will surely miss you all!"