by Meredith Davises

Created on: August 13, 2009   Last Updated: August 15, 2009

A babysitting business can be very profitable and rewarding for an individual who likes providing child care services.

Before starting any business, you must decide how much income you need and if the business will provide that much. Use the minimum state wage in your state and multiple it by 40 hours. After subtracting babysitting business expenses, this is the least amount of money that you can earn.

If you want to pay yourself ten dollars an hour, you have to charge the parent more to pay for the supplies and insurance that you need to run your business.

You need to set guidelines for expenses. The guidelines will be what you buy and what you allow your client to provide. The client should only provide dry goods meaning diapers, wipes, and tissue type products. The client can only provide food items like baby formula and it has to be used by the label recommended use by date.

You do not charge less if a client is providing diapers, formula, etc. because you do not provide these items. You are charging the client for your services not products.

Make menus for the meals and snacks that you will provide. Your food budget will also need to provide for waste. If you have apple juice leftover on Friday, it cannot be used for Monday. Add ten percent to your food budget to cover the waste.

You need to keep your personal expenses separate from your business. Receipts are very important and you need receipts that document your business expenses.

Liability business insurance is necessary. You cannot wait until some thing happens to decide how important it is.

The department of child care services will allow you to take care of four children depending on their guidelines from state to state. That does not include your children.

How much will you need to charge your clients for babysitting? This is an example so it may vary as these are estimates. Your salary is 400, your food budget is 200, and your insurance is 50. That is a total of 650. You are babysitting 4 children. You need to collect 162.50 to meet cost for each child that you are babysitting but there is another expense that you need to add.

To stay in business and cover loss when a client stops using your babysitting service, you need to add 40 dollars to your babysitting fee. Instead of charging the client 162.50 per child, you need to charge 200 per week. 202.50 is the actual amount but you can round it off.

A separate banking account for your business is necessary to stay in business also. You will pay yourself (400), pay for your expenses (200), and insurance (50). The extra money in the bank will stay there unless you use it to cover not having 4 children.

You should open your bank account with 800 dollars. You will have 200 left over in the bank. Each week that you have 4 children, you will have an additional 200 in the bank. This money belongs to your business.

This is money that you can use to expand your business. After a year, you may decide to hire an employee and extend your babysitting services to 4 more children. The money in the bank is not for field trips, but it may be needed to replace or buy equipment for your babysitting business, like a crib or refrigerator.

Should you want a loan to expand your business, you will need to provide your state tax Id for your business and money in the bank to pay your expenses.

This is the financial side of your business. If you are considering a business as a babysitter, you probably have some ideas of what you want, and don't need a creative hand with that at this time.

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