Home-based child care offers many positive benefits, including care in small and mixed-age groups, continuity of care as children age, close-knit relationships with the caregiver, and logistical support and flexibility for parents, especially those working nontraditional hours. However, home-based providers face unique challenges that make them very vulnerable to closing, such as 

• Very low wages because of lower subsidy rates than center-based programs, coupled with parents’ abilities to pay higher fees, and limits on the number of children in care 
• Limited ability to withstand late and missed payments
• Isolation can harm their mental health and professional satisfaction
• Limited access to professional development and quality improvement resources

Understanding their unique challenges is the first step to developing policies that are responsive to home-based providers. An examination of several reports on home-based providers reveals that:

•  Many home-based providers have no staff and can experience isolation and loneliness. Additionally, directors of home-based programs must simultaneously manage multiple roles: administrator, teacher, accountant, cook, and more. This can create role strain and require long hours. 

• High operating costs, including utilities, supplies, mortgage, and wages for potential staff, that are not offset by relatively low revenue, resulting in a low annual income. Home-based providers' income challenges are worsened by receiving lower reimbursement rates than center-based providers. Revenue is also often inconsistent because sometimes providers aren’t reimbursed when children miss days of care. The number of children cared for is maxed at 5 in NC, even if additional staff are hired, which limits potential revenue. 

• Home-based providers enter the field because they enjoy working with children and/or need to earn an income while staying at home with their children. However, many lack business training that could aid them in managing the accounting, regulatory, marketing, and administrative tasks. 

• Meeting licensing standards is no easy feat, considering the need for paperwork and documentation to meet QRIS and subsidy system requirements that are often more applicable to center-based care, and mandated training hours, but no time available in the work week to complete training without closing their programs. A lack of alignment in the regulations across state and county systems often compounds licensing challenges. 

Read what home-based providers say about these and many other challenges in Delivering Services to Meet the Needs of Home-Based Child Care Providers.  

Statewide subsidy rate floor: When reimbursement rates are set based on what families in a given county can pay and are then set even lower for home-based providers, it makes it difficult for rural, home-based providers to earn a living wage. A statewide minimum reimbursement rate that is the same for center and home-based providers still enables higher reimbursement rates based on a program’s quality ratings, age of children served, and other differentiating factors. 

Child care and development fund (CCDF) supported start-up and professional development funding: CCDF quality set-aside funds can be used to support potential home-based providers with licensing, professional development, and coaching assistance, start-up and quality improvement grants, and other financial incentives. Business support can also include coordinating shared services programs to enable home-based providers access to economies of scale in purchasing supplies, accounting, and other business management services. 

Provide professional development during regulatory inspections: Home-based child care programs receive one unannounced inspection each year in NC. These visits can be used as quality improvement and training opportunities rather than simply checking for regulatory compliance. 

Staffed home-based child care networks: A particularly promising practice is government-funded child care network coordinators who create and manage networks of home-based providers. Research shows that providers in networks with well-trained coordinators have higher quality ratings. Network coordinators provide small group professional development trainings, business services, visits to individual providers that focus on helping working with children and parents, access to help through phone and online, and facilitate formal opportunities for peer support groups to reduce provider isolation.