Contract Information For Daycare Providers

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Oct 10, 2001

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 biggest factor in a daycare business that will lead to trouble revolves around the infamous "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, the other party 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.

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