Hello there,What are the trade practices in your area? Have you checked to with other licensed day care providers to see what their practice is regarding deposits. If deposits are common place for this type of business in that area, say to minimize losses for failure to pay, then you can safely do so without disturbing your business.I understand your situation, you started this business without adequate start up capital and are will face a cash crunch. That is not necessarily your clients problem. If this is not a common practice in your area, you are sending up a red flag that your business does not have adequate capital to operate. It will make your customers wonder where else you may have to cut corners in order to keep your business going. That may be enough of concern to your clients to lose business.I would do some serious research before I jumped into a conclusion on this matter.Later,
I would charge at least 1 full week as a deposit for every client. My mother s done daycare for the past 26 years, and you d be shocked at the parents who will suddenly stop daycare (despite the required 2 week notice). This way, if they give you a two-weeks notice when they no longer require your services, you can use the deposit as their last week s pay. Plus, if they don t give notice, at least you ll have one week s pay. Another thing that s recommended is having them pay 1 week in advance, again to protect you from not getting paid. This won t work if you charge by the hour, but if you have a flat part-time or full-time fee, this is a great option.
One strategy is to provide a benefit for early payment. So, if you would typically bill on a weekly basis, allowing people to deposit with you an amount that would cover a month s services and giving them a 5% discount for prepayment helps you with cash flow as well as cutting their expenses. You would need to make clear how much of the prepayment would be refundable, and with what notice.
