Contracts - The Providers' Insurance Policy

A question was asked in the comment section of yesterday's blog. The reader wanted to know how often a contract should be amended and distributed to parents. I would like to address this question in today's article.

First, in my humble opinion, if you are operating without a contract then you are like a nesting duck who will soon become dinner for the fox. Now I understand someone will come along and leave a long comment regarding the fact that they do not have a contract and have managed to stay in business for years. Well, great. I'm glad you have either found the largest group of golden parents on the planet or really don't mind being taken advantage. Or, perhaps you do not regard your daycare commitments as a business. Either way, like I have always said, if it works for you then great. If you're happy, I'm happy.

Most providers I know have not had the luxury to meet and retain a home daycare full of golden parents. Apparently, in nearly every part of Canada and the United States, golden parents are a rare commodity. There are few parents, without the parameters of a contract, who are willing to sign over to you a cheque for weekly fees when they are off jet setting with their family during one of their fourteen weeks of vacation this year. Nope, it just doesn't happen. So, to ensure that we can still afford to buy our family hot dogs while the jet setters are enjoying steak dinners we have a contract. It's our protection - our insurance policy.

If you have read all the post in this blog you will undoubtedly already know what specifics should be included in the contract. But, when do these contract go out? How often do we renew contracts? Do we renew them at all? Do we negotiate renewal? These are all questions I hear time and time again.

It is my opinion that when a family signs onto care they also agree to and sign a contract. This contract should have an expiry date of no longer than one year. In my care, if a family signs on to care in October the expiry date of that contract will be December 31st of the same year. I use the last day of the calendar year as an expiry date of any of the contracts I hold with a daycare family. I like to renew the contracts of the entire group every January 1st. For me, this date is just one measure to ensure that all families are operating under the same fees, rules and polices at the same time. Amending and renewing contracts throughout the year is far too much administration and confusion for me. The only time I would amend a contract throughout the year is if a parent's care arrangement changed. And, at that time the old contract is null and void and you are given the opportunity then to add or delete policies, and change fees at that time too.

Every December 1st my daycare families can expect to be handed to them the contract for the new year. I increase my rates every year by one dollar. The new fee is always included in the contract. However, over the years I have amended everything from my illness policy to the parents paying for their vacation time. Basically, I amend anything that has caused me issue over the previous year along with anything I deem to no longer be working to my advantage.

When I hand out the new contracts I also include a cover later thanking my families for their continued trust in caring for their children. I point out that a few changes are included in the contract and might even give some details and reasons for those changes. But, the most important aspect of the cover letter is the following line:

"Please sign and return your 2010 contract by December 15th, 2009. Should I not receive your signed contract by the aforementioned date I will assume the terms of the contract are not agreeable to you and I will take it upon myself to requisition your child's spot to a family from my waiting list".

This is an important sentence. It's jam-packed with innuendo. First, it states that there is a deadline. But, second, and most importantly, it clearly states to the parents that the contract is not negotiable and that failure to agree means they no longer have a space in your daycare. Is this pushy? Undeniably! But, business is business. Why do you think the most successful companies on the planet have contracts? Because contracts work! Contracts protect the interests of the company. Protect your interest too.

Around September of every year I start to think more and more about my upcoming contract amendments. I start to make small amendments to specific sections. I start to think about the future. I forecast who might be leaving for school the next year, who might go on maternity leave and who might jump ship with news of the new contract. You have to plan. You have to forecast in your head the possibilities of what the new year might bring to your daycare. But one thing you should not do is negotiate your contract. There is no room for compromise.

Amend your contracts annually. Start thinking about them early and change things that no longer work to your advantage. Give your contract ample thought and consideration. After all, just like the parents who will agree to it, you too will be living by that contract for the next year.



For concerns, advice or suggestions I welcome your email at judytrickett@yahoo.ca