How to Help Your Teen Legally and Financially Prepare for a Safe Babysitting Business

When you were a teenager, starting a babysitting business meant posting flyers with your name and home telephone number around your neighborhood and waiting with fingers crossed for one or two parents to give you a call. Today, however, teens have the opportunity to start legitimate, lucrative businesses through child care because most homes have both parents in the full time workforce. However, with this opportunity comes greater responsibility. The consequences of a poorly organized child care business, no matter how old the entrepreneur running it may be, can be disastrous. Help your teen legally and financially prepare for a safe babysitting business with the following tips before opening up your home to others.

Tip #1: Create monthly scheduled openings for all parents. While it is rare, some parents have been known to create quite a problem for teens promising babysitting services and later cancelling. As such, protect your teen and his/her business by creating pre-selected work slots. While a teenager's schedule will fluctuate, it would be wise to create schedules at least one month in advance with openings listed for parents to sign up for. Encourage your child to adhere closely to that offered schedule, and to plan it carefully.

Tip #2: Make sure that your contact information, not your teen's, is on the babysitting flyer. From cell phones to email to social networking sites, there is no shortage of methods for predators to contact vulnerable teens peddling their services. Make sure that your contact name and information is listed below your child's name, and make your relationship to your child known (for example, list your teen's name and then add something akin to "please contact my mother at this number for more information" on the next line).

Tip #3: Interview all potential clients for your child. This measure is not only to help protect your teen. This is also to give you a chance to cover any child care issues that may need to be addressed with each particular set of parents. Make notes and do not agree to allow your child to instantly offer his/her services upon meeting any parents. If you decide that, after the first meeting, the relationship would not be a strain on your child, move on to the next step.

Tip #4: Create contracts for all parents. This is an extremely important step toward legally preparing your child for a babysitting business. All contracts should have cancellation policies, payment requirements, possible circumstances for wage increases, higher payment requirements for emergencies and unscheduled sessions, emergency numbers, do-not-contact days and hours, allergy information for each child, medical releases, and liability information. Because your teen may be more susceptible to lawsuits than teens were two decades ago, creating a contract and having it notarized is a necessity before beginning a babysitting business. Also be sure to add any special information that may need to be tailored to each specific couple and their children.

Tip #5: Create an organized financial information and tax preparation system. Babysitting today doesn't always mean making a little extra pocket change. Creating a business out of childcare may mean a real income for your child. As such, depending on how much he/she earns, that may mean reporting that income and filing a tax return. Save all receipts related to expenses and record every dollar earned. An excellent and inexpensive way to help your teen do so is to purchase an invoice book, a ledger, and a few filing folders. Each babysitting session is to be considered a transaction between the business and the customer, with a listing of hours served and appropriate charges. Parents can be asked to sign each invoice and should be given a copy to keep, verifying that they agree to the charges. At the end of each week, all receipts and invoices should be recorded on a ledger and stored in their appropriate files. Be sure to have separate columns for each monthly ledger sheet to record that month's specific earnings as well as the earnings carried over from the previous month. Come tax time, a simple review for verification will be all that is necessary for reporting your teen's earnings for the year.

Tip #6: Be sure that your child meets all state requirements for caring for children in his/her home. Again, you might have been allowed to care for more children than you could count when you were a teen, but today laws are in place to prevent such practices. Many states limit teens (and adults alike) to caring for up to two or three children that are unrelated to them at one time (rules for children within the family may be different). Also, there are laws in place regulating how many hours and days a week a person may offer child care services without a license. In other words, it is highly unlikely that your teen will be allowed to care for unrelated children every day of the week (though one would hope that wasn't the goal to begin with). Check your state and city laws for more specific information on unlicensed in-home child care.

Tip #7: Check your city and state requirements for in-home child care regulations on medical services. From giving a child Tylenol to attempting to perform CPR without certification, you and your teen could be at tremendous risk if even what seems to be necessary and emergency medical treatment are offered without the proper licensing. While you may have a parent's permission to administer First Aid and to take the child to the proper medical facilities should an emergency arise, your teen will generally not be eligible to offer over-the-counter medication for mild health concerns. On that note, he/she will also be facing potential lawsuits and business/reputation damage if CPR or other emergency maneuvers are attempted without certification (injuries can result with or without certification, but being properly trained may protect your teen from accusations of incompetence). Check your local laws ahead of time.

Tip #8: Help your teen create a safe babysitting business with written marketing and financial plans. Creating a plan for growth as well as a plan for maintaining that growth will help your teen make the most of his/her earnings from his/her babysitting business. Creating a long term goal and learning how to achieve it step-by-step will also give your teen a chance to see what running a business in the real world is truly about.

Remember, running a babysitting business today means not only investing back into clients' children regularly through training and tools, but also strictly adhering to state and local child care regulations. A little planning ahead of time will put your teen's babysitting business in the financial and legal safety zone for good.