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Building a business


Social media: What’s your ethics policy?
Social media such as Facebook and Twitter have become important ways for businesses to communicate with their customers and the public. Child care providers, like other businesses, need to use care and diligence in posting information and responding to comments. Make sure you conduct yourself online as you would in any other public setting.

Consider adding a social media ethics section to your employee handbook. Some guidelines:

Remember there’s no privacy on the Web. The Web is a public forum, and anyone with access to it can potentially read what we write. Because online activity, even on sites unrelated to child care and education, can be picked up and spread, encourage employees to use the highest level of privacy tools to control access to their activity online. Most important, remind them to represent themselves in a way that will not jeopardize your facility’s reputation.

Beware of impulsive posting. Posting to the Web is immediate, and emotions can get out of hand. If you get a negative post, either on your facility website or on a social media site, wait for a period (maybe 24 hours) before responding. If a parent or competitor criticizes your facility, for example, follow up offline. Take time to investigate the circumstances, and then write a thoughtful, reasoned response.

Don’t engage with trolls. A troll in Internet parlance is anyone who posts comments just to make people angry or upset, either intentionally or accidentally. A troll may enter a discussion on a controversial topic to further inflame it or steer the discussion to an entirely different topic. The best way to stop trolling is by not responding.

Avoid friending a client. Friendliness and affection are integral to healthy child development in the home and classroom. But the relationships between caregiver/child and teacher/parent are first of all professional. They require respect, trust, and confidentiality, similar to that between doctor and patient. Decline offers to friend or like a parent or child online.

Don’t allow anonymous posts. You have the right to control posts to your website or Facebook page. People who post a comment without a name often demonstrate a lack of courage and responsibility. Delete anonymous posts. Strive for honesty and transparency.

Tell the truth. Not all the information on the Web is accurate, and rumors are commonplace. Before passing on information, verify it from a credible source or at least name the source where you found it. Abide by the terms of service of the social media site. Don’t copy text and claim it as your own (that’s plagiarism), and don’t fake client satisfaction or praise.

Avoid humor and teasing. What seems funny or witty when spoken in personal conversation can be interpreted the wrong way online. Even when tempered with LOL or an emoticon— :) for smile, :o for shock, for example—the comment can appear offensive or just plain weird.

Be scrupulous with photos. Get parents’ written permission to post photos of children. Consider the effect of photos on someone unfamiliar with your facility: Do you really want to post photos of teachers on Pajama Day? If you copy photos found on the Internet, be sure they are copyright-free or get permission to use them. Ask employees to closely monitor photos of themselves posted by friends and family.

Err on the side of caution. Trust your instincts. If it feels uncomfortable, it’s probably not appropriate.


Balancing the budget: A lesson


I’m trying to understand why this program is losing money, while our other one is not,” says Clare, the newly hired accountant of the Crestenfield Community Agency.

“Here are our books from September through August,” says Marianne, the program director. “In each month, you can see that the money we take in doesn’t quite cover expenses.”

“Who makes up the difference?” asks Clare.

“Well, we ask the agency to pay some of our bills, and we have fundraisers all year,” Marianne says.

“Let’s look at your fees and enrollment,” says Clare.

Marianne explains the number of slots for infants, toddlers, preschoolers, and after-school students in the program and the different fees for each group.

Clare puts pencil to paper, figuring the expected income for each group. Then she points to the figure for the first group: “If there are this many infants, then there should be this much income.”

“Yes, but we don’t charge parents for the days they don’t bring their babies…or the other children,” says Marianne.

“Ohhhh,” says Clare. She sits silently for a moment, then asks, “Do your expenses go down when a child is absent?”

“No,” says Marianne. “But if they don’t use our service that day, how can we charge them?”

“Let’s look at what it takes for you to have that service available,” says Clare. “You pay staff to care for children, you use lights and AC, and you buy food for meals and snacks. Think of it this way: When parents enroll their children, they are buying child care for a given period whether they bring their children or not.”

“Yes, that’s true,” says Marianne. “So what can we do?”

Clare asks more questions: How are parents informed about fees and services? What is the payment schedule? Do you charge according to a sliding fee scale? Do you have scholarships or subsidies? How do you handle late payments? Do you expect any increases in expenses? Are the current fees, if fully paid, enough to cover projected expenses?

Together Clare and Marianne compose a letter to parents explaining a new policy on fees. Fees will remain the same, but payment must be made in advance and no credit will be given for days children are absent. The letter will be dated Dec. 1, and the new policy will go into effect Jan. 1. If parents intend to withdraw their children, they must give two weeks’ notice.

Marianne adds the letter to the parent handbook and explains the change at the staff meeting the next day to ensure that everyone is informed.

Over the next few weeks, Clare gives words of encouragement to Marianne as the policy is implemented.

The next summer, Clare calls Marianne to ask how things are going.

“Fine,” Marianne says. “We had the usual turnover in enrollment at the end of the year. Our parents have accepted the policy, and most are paying on time. And best of all, we haven’t had to beg for more money.”


Tips for leasing space


Bill and Betty have decided to expand their child care program. They operate in an area where young families are moving in and all preschools, like theirs, have long waiting lists. They have selected a building with space they would like to lease.

A lease is a contract that spells out the terms under which you (as the renter) will use the property and pay a specified sum for a given period. It states the amount of rent, when it’s due, what happens if you don’t pay it, and other details. You negotiate the lease terms with either the property owner or the owner’s real estate broker. Many property owners hire brokers and pay them a commission on the total lease value.

What are some things Bill and Betty need to think about before signing a lease?

Get advice from a trusted source. Before contacting the owner or broker, talk with another real estate agent or business person in the area who knows the local market and trends. In addition, have your attorney review the lease and help you negotiate the terms.

Find out about any restrictions. Will the landlord allow the indoor and outdoor space to be used for child care? Will you have the exclusive right to operate a preschool in the location? (You probably don’t want a competing program to operate two doors down.) Are there any limits on signage or noise, for example?

Clarify who is responsible for the build-out. Because most commercial space is generic, your space will likely need renovation, or build-out, to meet your needs. The landlord may agree to add or move walls, install carpeting, and repaint the interior. You may be responsible for installing child-size toilets, a sink in the infant room, and kitchen appliances, for example. If so, find out whether you will be allowed to take these items to another location should you stop renting the space.

Review the lease price and duration. The U.S. Small Business Administration recommends that small businesses take a short-term lease, say one or two years, with the option to renew as needed. Be aware, however, that the landlord may want to lock you in for a longer term and may offer incentives such as a month’s free rent, to seal the deal.

The rent will be quoted in a price per square foot, say, $1.25, a month. If you need 800 square feet, for example, the monthly rent would be $1,000. In a growth area, cost of space will likely increase over time. Even in a slow-growth area, the price may go up a set percentage after a year. Take note of the timing and amount of the increase and adjust your budget planning accordingly.

Pay close attention to expiration and notice. The point of the lease is to secure the space for your business. You don’t want the lease to expire and get a surprise notice to move out because the landlord has found another tenant ready to move in. Will the landlord give notice and, if so, when and how?

Negotiate the security deposit. As with residential leases, the landlord will ask for a security deposit to cover the cost of repairing any damage after you leave, or cover rent payments if you default. If you are a desirable tenant with sound financial history, you may be able to negotiate a favorable amount and terms.

In particular, find out what happens if you miss a payment. Will the landlord use the security deposit and allow you to replenish it? Or does the landlord have the right to terminate the lease?

Nail down responsibility for expenses. You will usually pay your own utilities as well as some share of maintenance. Find out whether each tenant has individual meters or whether utilities are apportioned according to square footage.

Who is responsible for air conditioning, plumbing, and electrical repairs? If you are responsible, ask for documentation on when the systems were installed and how often repairs have been made in the past. You will also need to establish your own maintenance plan for such things as replacing AC filters.

You may also be expected to pay a share of common area maintenance (CAM) for things that all tenants in the building share. These may include security, rodent control, repaving the parking pavement, roof repair, and removal of fallen trees after a storm.
Property insurance and taxes are typically figured as part of the rent. Find out for sure.

Ask about subleasing. If your business is slow in taking off or doesn’t pan out as you expect, you may want the flexibility to lease the space to a third party.


The information above is provided for information only. Seek legal counsel before signing any property lease.