Setting Rates and Tracking Expenses as a Care Provider
How adult and senior caregivers can set competitive rates, whether they work as individuals or run a business.
Whether you're just starting out, working part-time or launching your own full-time senior and disabled care business, these smart tips and tricks for accounting should help you keep your books balanced -- and your sanity intact.
While rates will vary based on location, intensity, and the duration of a particular senior care job, a senior care provider or caregiver can generally charge from $12 to $100 an hour. Providers who offer included services like shopping, house cleaning, bathing, administering medicine, etc., can charge more -- or can offer a la carte services on top of their base rate. Research the market for senior care in your area by looking through listings on Craig's List, SuperPages, Yelp, CitySearch or contact your local hospital. Base your rates on those charged by other senior or elder care providers with comparable skills.
Register as a "Sole Proprietor"
Regardless of how much you think you'll make, first you need to register as a "sole proprietor." To do so, visit the state department of taxation or business and your town or city hall. Once you complete the registration process, you'll be assigned federal and state employer and tax ID numbers. If your business grows to the point that you're making more than $5,000 a year, you will need to update your business status to an LLC (limited liability corporation) or other corporate entity.
Keep Accurate Records
Keep your records safe, and always keep a history dating back at least three years. Store backup computer files at least once a month. Don't let a computer crash ruin your business -- the IRS reserves the right to audit you at any time.
Invest in Finance-organizing Software
Look for programs that cater to small-business owners. These packages provide business forms and templates, and plenty of information to get you up and running. Begin by creating business ledgers, which should include cash-flow worksheets to track your spending, fixed and variable expenses, income and other financial records. Quicken, QuickBooks, Microsoft Money and PeachTree are some popular options.
Hold on to Receipts
Cell phones, computers, equipment, and office space are only a few of the items that can be deducted come tax time. You can deduct groceries, medical supplies, cleaning products and more, so keep a record of all of your expenses.
Use Local Resources to Promote Your Business
Speak with someone at your local chamber of commerce -- which has resources to help you set up, run, and finance your elder care business. The chamber of commerce can help you promote your business, and might even lead you to potential clients. Another great source is your local hospital, assisted living facility, nursing home or Council on Aging.
The nuances of small-business tax law are best left to an accountant. What you can do is keep accurate records of all the money you spend and earn. You have to be pretty numbers-savvy to avoid getting tangled in the financial web that's spun when you're running a small senior, disabled persons or elder care business, but with these tips you'll be on the right track!
Tiffany Smith is the senior associate editor here at Care.com. She has written for All You, Time for Kids and the Boston Globe. And as a former babysitter, she knows a lot about fun games to play with kids. Getting them to eat their veggies -- that’s a different story! Follow her on Twitter at @tiffanyiswrite.