Entrepreneurship and Education & Workforce Development and Small Business

Home entrepreneurs test child-care waters

September 24, 2007

When Stephanie Tudor found out she was going to have a second child, she wanted to leave her job as a geriatric nurse to stay home with her baby. But her family needed her income, so she came up with a compromise: She would nurture her child and others--for a fee.

Motherhood is a common path to the home-based child care business, but more childless women looking for self-employment options also are getting into the field.

"There has been some shift in that," said Marsha Hearn-Lindsey, director of programs for locally based Child Care Answers, which provides free technical training to Indiana care givers.

Nearly 3,000 Indiana child-care providers are licensed to provide services in their homes--including 469 in Marion County. Other home-based centers are small enough that they don't require state approval.

However difficult they are to quantify, home child-care centers are a popular enough enterprise that an Indianapolis not-for-profit is launching an intensive training program to equip operators with necessary business skills.

In fact, home-based child care is the most common idea clients bring to the Central Indiana Women's Business Center, said Director Sharon O'Donoghue. And it's a good fit for many of them thanks to low startup costs and a steady supply of potential customers.

"It's a great field if you have a passion for children," said Quensetta Adams, who oversees the child-care training program for Neighborhood Self-Employment Initiative. NSI and its Women's Business Center affiliate are teaming up to offer the new three-month training program for child- and elder-care providers.

There's often more to running these micro-businesses than it might appear at first blush. And for many owners, the business know-how doesn't come as naturally as the child-care skills.

When Tudor started her business in 2001, for example, she kept receipts and records in a shoebox. After all, she thought she would be doing it only until her daughter was in kindergarten.

"I started with teaching the children of friends from church and enjoyed it," she said. Before long, she was hooked. "It's my new passion. It's a business, but it's also a ministry."

She signed up for business classes through the NSI and moved record keeping to the computer and grew the business.

Now she runs Rays of Sunshine Licensed Childcare, two licensed child-care homes in the Garfield Park neighborhood near Raymond and Shelby streets. There, she and two part-time and two full-time employees care for 30 children. She also is planning to open a licensed center nearby.

Start small

Tudor's experience is a textbook example of why Adams recommends that home providers start small. Once a child-care center looks after more than five children, it must be licensed by the state.

It's better to work out the kinks before that happens. In the training program, Adams walks many of the women through the basics of developing a business plan, forecasting revenue, managing cash flow and marketing.

Marketing can be one of the biggest stumbling points. Adams said she has to push clients to come up with a unique selling point for their services.

"Not everybody wants to drop a child off just because you do baby-sitting," she said.

O'Donoghue agreed, saying the emphasis has really shifted to focusing on the child's development.

"Today's child-care environment is a cross between parenting other people's kids and home schooling--getting children kindergarten-ready," she said.

Providers can specialize by offering Spanish instruction or dance classes, for example. They also should develop a curriculum--whether it's one that focuses on teaching skills or more fun, creative activities.

The more distinctive, the better, Adams said. For example, one client went into the business with her mother and played up the grandmother figure, calling her home "The Nanny's that's like Granny's."

Once a provider figures out the business's niche, Adams recommends in-person meetings with potential clients rather than mass marketing.

"We don't promote that owners put fliers on windshields at Kroger," she said. Instead, they should contact businesses and churches in their area to tell them about the new child-care option nearby.

Challenges

Eventually, successful providers may grow their businesses to the point where they need state licensing--and the challenges that come with that.

Tudor said when she started, it was easier to pack the kids up to run a quick errand or take a trip to the park. Now, she has to deal with parental consent forms and liability insurance.

"It can be confining," she said.

It also can mean few days off.

Debbie Belles started her home-based center in Irvington 13 years ago when she wanted to stay home with her daughters. With a background in early education and experience working in schools and larger centers, Belles started with a few clients through her church. She's now licensed to watch 10 children.

Belles said she's only closed her home child-care center four times in all those years--twice because she was sick and twice for deaths in the family.

"I have some times when I just want a day off, but I have parents depending on me," she said. "Think about how much time you want to put into it. It's a real big commitment."

Belles, whose husband also is self-employed, struggles to find affordable health insurance. And she's glad to have her family's support living amid a collection of bouncy seats and children's toys.

"Make sure your family is behind you, because it does take over your house," she said.

Neither child-care provider would share financial details, but home-based care in central Indiana generally costs $100 to $200 a week for each child. Tudor said she makes less now than she did as a nurse, but she loves watching the children develop and grow.

"Children are beautiful creatures," she said. "Sometimes your compensation isn't all in money."

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