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sbengtson 12:36 PM 07-12-2017
Hi all! I am in the beginning process of starting In home group care with two of my friends. We are trying to figure out income. How do you pay your assistants? We are all in this together and will all be paid the same. Do you split all of the income? Have a set hourly rate/weekly rate? Do you put money aside for special circumstances? We have pretty much every aspect figured out EXCEPT this

Any feedback is greatly appreciated!
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DaveA 12:55 PM 07-12-2017
I'm not as familiar with group home daycare licenses, but my question is you are starting with 2 friends- are you all a partnership or is one of you going to have the license in your name and the other 2 work as employees?
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hwichlaz 01:22 PM 07-12-2017
And who's home and property will be suffering the wear and tear?
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sbengtson 02:11 PM 07-12-2017
It will be my home. To make it easier I will probably just have it in my name and they will be "employees"
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Leigh 02:55 PM 07-12-2017
Originally Posted by sbengtson:
Hi all! I am in the beginning process of starting In home group care with two of my friends. We are trying to figure out income. How do you pay your assistants? We are all in this together and will all be paid the same. Do you split all of the income? Have a set hourly rate/weekly rate? Do you put money aside for special circumstances? We have pretty much every aspect figured out EXCEPT this

Any feedback is greatly appreciated!
Say you charge $3/hour/child: You each take $1 per hour.

If you can have 12 kids between the 3 of you, you will make just under $25,000/year pre tax. Plan on giving at least 10% of that to Uncle Sam ($2500).

What's your mortgage payment? Say it's $1000. There's another $12,000 gone (I assume that they're not paying part of that).

Now you have just over $10,000 left to pay insurance, pay for the extra utilities for having kids there (the water and electric bills are insane in the summertime for me, and the coldest of winter isn't much better!). So, say conservatively that you pay $300/month for utilities.

There's $3600 gone. Now you have maybe $6860 left over for insurance, wear and tear (and believe me, there IS wear and tear even when the kids don't intentionally cause it.). So, you spend maybe an extra $860 a year on replacing things that are broken or worn out more quickly. Now you have $6000 left.

Going to be using your dishes and silverware for daycare? Plan on half of your silverware ending up in the trash can within the first year ($100 to replace). Dishes? Either use yours (plan on breakage) or buy new ($100). Cleaning supplies? You're going to use plenty. $300. Changes to conform with licensing? $100-infinity. Babyproofing? $200. Extra towels, washcloths (bathroom and kitchen): $50. Extra lawn care (for the damage that kids running on the lawn causes): $500.

Purchased storage for extra food, art supplies, diapers, wipes, creams, coats, shoes, toys, cleaning supplies, a safe for medications, a locked cabinet for your cleaning supplies, extra trash bags for the extra trash generated, extra dishwashing supplies, extra carpet cleaning-mine needs to be done at LEAST once a month, sometimes weekly): $850.

Now you're down to about $3800, and we haven't even discussed the $500 a year that it costs for an accountant to navigate the daycare taxes, so we're at $3300.

This is just what I can think of off the top of my head. Assuming that the 3 of you are at least splitting the costs of food for the kids (I'll assume that you're frugal and good at planning meals, so we'll go low and say that you can feed 12 kids for $750/month), you're looking at $3000 for your share of food for the kids.

Now, you have $300 left to support yourself, pay your car payment, cover any incidentals that I have missed, extra gas for running daycare errands, your medical bills, care of your pets, etc. Oops! Forgot about that daycare insurance. It's $800 a year. Now, you're in the hole for $500.

I can't see how 3 people sharing a daycare income could work. I have a hard enough time making it work for just ME (I am allowed 12 kids). I HIGHLY suggest that you rethink this plan.
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hwichlaz 04:26 PM 07-12-2017
If they are employees you'll need to pay at least min wage, plus payroll taxes and worker's comp.
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hwichlaz 04:28 PM 07-12-2017
If there is any kind of a split, it would need to be a split of profits, not income. So you'd have to take out the month's expenses first...including your time space on your utilities and home owner's insurance and depreciation on your house, supplies, food etc.

Once I do all of that, I make less than minimum wage. I can't imagine anyone wanting to split that three ways.
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LittleScholars 10:13 AM 07-13-2017
You've been given really great advice. Can you look into opening a small center run outside of your home? In that case, I could see a 3-way partnership working.

In my opinion, anything run out of your home will never feel like a partnership to you because of the impact home daycare will have on your life, your space, and your physical property. For example, I just had a bad stomach bug floating around my daycare. I had to spend my weekend bleaching and making sure I was extra, extra cautious with my own family. This is the sort of thing your friends get to leave at the end of their shifts. You can't predict the ways home daycare will impact you specifically. If you can hire them both and make a livable wage, I would highly suggest moving forward and treating them as employees. Pay them a market rate as long as you can still make a significantly larger chunk of money.

For me, worker's comp alone is cost prohibitive. Also, you're ultimately responsible for what happens on your property and, to me, that risk is only worth it if I'm making a sizable income.
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kendallina 12:20 PM 07-13-2017
I definitely agree with the others that you shouldn't all make the same amount if it's in your house. You WILL have the brunt of the workload. Your house, yard, furniture, etc will have wear and tear. I don't necessarily agree with the numbers that previous posters used, as my wear and tear is much less than what she quoted, but it's a consideration nonetheless.

I do not necessarily agree with everyone that it wouldn't be worth it. You need to determine what the going rate is for childcare in your area. You need to determine how much workers comp cost ($125/year in my state for my one employee). How much is insurance in your area? Only you can work these numbers.

There are also a lot of kinks to work out...Have you discussed everyone's schedules? How you will handle if you are short on kids? You won't be able to afford to pay yourself and 2 employees if ratios are such that only 1-2 teachers are needed. Are you the owner? How will you handle if an employee isn't performing to your standards? This is a tough thing with friends. Doable, but you all have to be willing to be professional.

You also should think about whether you'd make more money doing this on your own. Or with just one employee. I had a teacher work with me for two years while I was pregnant/on leave/had an infant and I would have LOVED to have kept her. But, financially it didn't make sense. Even if we could have taken in twice the number of children, I wouldn't make any more money than just me working alone. And it's WAY more work to have an employee.

I'd love to hear back from you, let us know how much you would make per child and we can help you run some numbers.
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Cat Herder 02:13 PM 07-13-2017
Be sure to check out your local CCR&R and licensing division, they can also be helpful in getting up and running.
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Tags:assistant, employee - contract, employee taxes, helpers, insurance premiums, tax categories, taxes, time space percentage, time space percentage - limits
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