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Daycare Center and Family Home Forum>Given Our Financial Situation, Would it be Wise for Us to Start a Daycare Business?
Speciallistblend85 01:45 PM 10-09-2020
I already posted this on two other forums on reddit, which i got no response so im hoping someone here could give some insight into this.

My wife and I are in NYC and we're looking into starting a daycare business. I've been the only one working since February (hiring around here "picked up" only around June due to covid), I only make $50,680/year, she's been juggling looking for a job while at the same time being a (temporary) stay-at-home mom AND an unpaid teacher/teacher assistant (thank you, remote learning and COVID) for our 6 yr old daughter.

Her resume and interview skills are not the issue, rather, competition from other candidates and employer response/consideration is the issue. The jobs she's applying to are simple non complicated jobs but there's a lot of competition for what she's seeking (medical receptionist, which she is experienced in, and basic customer service jobs).

I myself am trying to improve our situation by applying to nursing school, im waiting until december to hear whether i am accepted or not. But even if im accepted, it takes two years to graduate so i need to make those 2 years work in the meantime.

We have an emergency fund with $13,000 in it. I also have an additional savings of $3000 which was originally going to be for down payment on a home but being that saving $400 a month towards a $30,000-$40,000 down payment is agonizing and like watching paint dry, i honestly don't know what to call this fund right now.

And our monthly expenses are about $2162.

However, onto to the point. My coworker runs a successful (licensed) daycare business outside of her home. Meaning she rents out an apartment, separate from her own home, specifically for the daycare business. I asked her about the steps and process of starting one because my wife is considering it.

I'm well aware of the procedural hoops you have to jump through to get licensed here in NY, but my main concern is finding/renting the place. We can't use our own home because 1) it's an apartment WITHIN a private house and 2) definitely not enough indoor space.

So say we rent a one bedroom apartment for the daycare at about $1300-1400/month (the going rate for 1 bedrooms in our part of NYC), and say it takes us a while to find parents to sign up, that means we will be stuck with paying for the apartment in the meantime, however long that will be.

My coworker said we would have to put our flyers but IF the local agency has any kids to send then they could send them to us (as well as give them a voucher to help pay) and also my coworker will send any kids that she rejects (due to maximum capacity) to us as well. But nevertheless, im still a little concerned about this possible "risk" of being stuck in a one year lease that may or may not pay for itself right away.

Should we just hold off on this for now, given our financial situation?

The only other option in terms of a home business is ebay dropshipping, which is low cost and low risk, however, it's a pain in the neck to find products that will sell. I have experience doing this last year and made like $300 in two months, but as i said, going thru the products is exhausting. There are virtual assistants who i can hire that specialize in doing this but it will cost like $50/week.
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Snowmom 02:49 PM 10-09-2020
Running your own business is a risk no matter what product or service you offer.
Daycare in itself is not a huge money maker. So, being that you would be paying rent on an apartment you don't live in, I personally don't see it being very profitable. If you were in an area where rent was very low, it might make my answer different. But then again, lower income areas generally don't bring in the more quality/higher paying clients either.

If your situation were slightly different... say if you were LIVING in the home you do business, then my answer would be go for it!

Can I ask- why not look into buying right now? There are little/low down payment loans right now with incredibly low interest rates. It wouldn't cost you more than a credit check to see what you qualify for right now. Owning a home will give you a better financial portfolio (even a small home that might not be your overall goal). Plus, doing business AND living out of that home will give you incredible tax benefits.
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Speciallistblend85 03:36 PM 10-09-2020
Originally Posted by Snowmom:
Running your own business is a risk no matter what product or service you offer.
Daycare in itself is not a huge money maker. So, being that you would be paying rent on an apartment you don't live in, I personally don't see it being very profitable. If you were in an area where rent was very low, it might make my answer different. But then again, lower income areas generally don't bring in the more quality/higher paying clients either.

If your situation were slightly different... say if you were LIVING in the home you do business, then my answer would be go for it!

Can I ask- why not look into buying right now? There are little/low down payment loans right now with incredibly low interest rates. It wouldn't cost you more than a credit check to see what you qualify for right now. Owning a home will give you a better financial portfolio (even a small home that might not be your overall goal). Plus, doing business AND living out of that home will give you incredible tax benefits.
Hi Snowmom,

Thanks for your reply

Your post is making me reconsider using my own apartment instead. I think... Maybe it COULD work(?) If i get rid of one furniture in the living room. Our living room and kitchen aren't really separated by anything except for a column. I would have to get some kind of safety lock to place over the stove handles, a lock on the fridge, and what not. Other than that, we have access to a backyard too.

I'd probably have to ask my landlord's permission too? Being that we live in an apartment within a private house (we dont have the whole house).

I agree with you about home ownership. I would probably need less than a year to put aside 3% down but I've heard that if you put down less than 20%, you have to pay PMI on top of your mortgage, utilities, etc. Right now i only have $13k for emergency and $3000 additional for whatever.
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Blackcat31 06:35 PM 10-09-2020
I agree with Snowmom..

Could your own apartment work with a small number of kids?

I don’t know about your state but in mine, specialized care for infants (>12 months) and toddlers (12-24 months) brings in big dollars since regular providers are limited to only 1-3 infant/toddlers leaving parents with kids in that age group struggling to find available care.

Plus that age group doesn’t require as much physical space
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Unregistered 07:19 PM 10-09-2020
Originally Posted by Blackcat31:
I agree with Snowmom..

Could your own apartment work with a small number of kids?

I donít know about your state but in mine, specialized care for infants (>12 months) and toddlers (12-24 months) brings in big dollars since regular providers are limited to only 1-3 infant/toddlers leaving parents with kids in that age group struggling to find available care.

Plus that age group doesnít require as much physical space
Right yes. As i was mentioned in my response to snowmom, i think our place could probably work with a small number. I just have to rearrange some things. Our living room and kitchen aren't really separated by anything except for a column. I would have to get some kind of safety lock to place over the stove handles, a lock on the fridge, and what not. Other than that, we have access to a backyard too. Hopefully my landlord will have no issue, we've been with him for 13 years now.
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Blackcat31 07:28 PM 10-09-2020
Originally Posted by Speciallistblend85:
I'd probably have to ask my landlord's permission too? Being that we live in an apartment within a private house (we dont have the whole house).
These links discuss landlord/tenant rights for operating a family child care in an apartment:

https://www.wonderschool.com/p/child...sforlandlords/

https://www.dos.ny.gov/cnsl/lu16.htm
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Josiegirl 02:44 AM 10-11-2020
How long would your wife's licensing take to go into affect? How many hours of courses and orientation would she need? The process can be long and costly, in the beginning. Every state is different and having been in the education field already, maybe the process wouldn't be as long as starting from a different profession.

If I were in your situation, I'd definitely consider doing it on a small scale in your apartment first, kind of to test the waters. If it's something she really likes and could see herself doing in the long-term then make the investment of a separate place of buying a home.

Good luck!!
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rosieteddy 07:27 AM 10-13-2020
Another option would be a nanny position .Often nannies are allowed to bring their own child. Especially due to the Pandemic. Or maybe just one or two infants in your home. I would definitely not rent a separate apartment. Family childcare typically is just that. Caring for children in your home. Locking refrigerator not necessary. Children could do table activities at the family table. I would spend the least amount of money to start. Your wife may end up not liking the long hours ect. Good luck.
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Morah_96 08:15 AM 10-18-2020
Hi, I have a daycare in nyc. Imo its not worth renting another apartment as the rent + utilities for each ends up costing too much.

I moved from renting an apartment to renting a house for this purpose. My 1 bedroom apartment was 1500 and I'm now paying 2400 for 2 floors of a 3 bdrm house with a yard.

Is that an option for you?

Also I don't know what the going rates are in your part of nyc but don't be scared to make your prices on the higher end.
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