Start A Daycare Business - 3 Mistakes To Avoid
When starting a day care business pay attention to the challenges that others have faced
. Not paying enough attention to legal or insurance issues can be disastrous mistakes. Failing to review your pricing when you are not attracting enough children can lead to losses over time as well.Working in an Illegal Space
Look carefully at your local regulations to determine if you can operate your business in your intended location. Running a day care center out of your home might be illegal in your locality. Consult with an attorney on these questions. If you run your business out of an illegal space, you will constantly be in danger of being shut down by the authorities and investors will hold you responsible if they were unaware that the space was illegal and especially if they were told that it was. The money you save through taking a shortcuts around legal issues will never be worth the uncertainty they will create about the future of your business.
Not Having the Right Insurance
Only when you are operating in a legal space can you obtain the proper insurance for your business. Even if you manage to get insurance, the insurance company may fail to cover you if it is found you were breaking the law. For a day care business, insurance is especially important because of the high involvement you have with your clients; children. If children become hurt or sick while at your day care center, expect that lawsuits may follow. Insurance can protect you from losses that could cripple your business in these cases. Work with an insurance company with experience insuring similar businesses and make sure you insure the children, employees, physical assets of the company, and even yourself if you will be a key employee.
Running At Low Utilization
Once up and running, it will be difficult to always keep your center 100% full with children. However, if you choose to run at low levels of attendance rather than dropping your prices, you may be throwing away revenue. Make sure you have a sense of what prices would expand the number of parents who would use your day care. Weigh the revenue you may loose from lower prices against the revenue you are loosing by not running the center at capacity.
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