Family childcare gets romanticized. The cozy living room, the warm meals, the steady children. All of that can be true. But underneath it is a small business with real numbers, and most family childcare owners are running those numbers in their head while loading a dishwasher.
Let’s pull it out of the dishwasher and put it on the table.
Income, on paper, looks predictable. Most California family childcare homes are licensed as either Small (up to 8 children) or Large (up to 14, with an assistant). Multiply your slots by your weekly rate, add subsidy reimbursement where applicable, and you have a ‘gross’ number. That’s the easy part — and it’s also the misleading part.
The real picture starts when you net it out.
Direct costs come first. Food: even with CACFP reimbursement, you’re spending real money on groceries every week, especially if you offer breakfast, lunch, and two snacks. Supplies: diapers, wipes, art materials, sanitizer, paper goods. Curriculum and books. Outdoor equipment. A nap-time blanket budget you didn’t expect.
Then your assistant, if you have one. Even part-time, an assistant who is paid fairly, on-the-books, with the right taxes and workers’ comp factored in, is a meaningful line item. If you’re a Large home, this is non-negotiable — both legally and humanly.
Then your facility costs. If you own your home, mortgage and utilities. If you rent, you’re carrying that cost too. A reasonable percentage of your home is being used for the business. Mileage, if you take field trips or pick up groceries for snack programs. Insurance.
Then the slow leaks: business licenses, fingerprinting renewals, CPR/First Aid courses, ECE units, conferences, the licensing fees, professional dues. None of them are huge on their own. Together, they matter.
And then the costs that don’t show up on a P&L but absolutely show up in your life: the unpaid hour you spend Sunday night planning the week. The Wednesday morning when a child arrives with a fever and a parent who can’t pick up until 3. The Saturday spent reorganizing the playroom. The Friday night spent on subsidy paperwork.
When providers run the actual numbers — after food, supplies, assistant, facility, fees, and the unpaid hours — many discover their effective hourly rate is well below what they would earn working at a center. Sometimes well below what they would earn doing almost any other job they’re qualified for.
That doesn’t mean family childcare doesn’t work. It means it has to be priced and structured intentionally.
A few honest principles:
Price for the real cost, not the easy cost. Build your weekly rate from your true expenses plus a target wage for yourself. If the resulting number feels uncomfortably high, that’s information, not failure. The discomfort is the gap between what families can pay privately and what care actually costs — which is the conversation the whole state is having.
Use subsidy as part of a mixed portfolio, not your whole business. Subsidy income is essential for many providers, but its timing is unpredictable. A healthy mix of subsidy and private-pay families builds resilience.
Track time, not just dollars. Once a quarter, run a week-long log of every hour you spend on the business, including evenings and weekends. Divide your weekly take-home pay by that real hour count. That’s your true hourly rate. Look at it. Decide what you want to do with it.
Invest in two systems early: a clean attendance/billing system, and an accountant who knows family childcare. Both pay for themselves quickly.
Build in time off. Not ‘maybe in the summer.’ On the calendar. Pre-announced to families. Funded by your rates. Your business is not sustainable if it depends on you never being tired.
Family childcare can be a real, dignified, profitable small business — but only when the math is honest. The good news is, once you see your real numbers, you can build the business around them. Most providers we know who run their finances clearly end up calmer, not more stressed.
The math is not your enemy. The fog around the math is.