Why Working With a Solo Business Can be Just As, or More, Beneficial Than An Agency

This post, and Part 1, On Working as an Independent Contractor and Where Your Money Goes, are based on my own business practices, which have been evolving over the last 14+ years of providing in-home child care and family support. Each solo business, provider, and agency have their own business practices and financial priorities and what’s said here may not be all-inclusive of all businesses. I’d recommend asking more details of the specific agency or solo business you’re interested in working with to learn about their practices.

What are the similarities and differences between an agency and my business? The agency you’re planning to work with might take a cut of what you pay, so how much is going to the postpartum provider who is working in your home? How can you start to find a postpartum provider on your own?

In Part 1, I provided a breakdown of how I funnel business income into 5 areas: Owner’s Compensation, Taxes, OPEX (Operating Expenses), Profit, and Overnight Fund. I also highlighted some examples on what those cover: health insurance comes from Owner’s Compensation; Medicare, Social Security, and income taxes come from Taxes; website fees come from OPEX; some sick and paid leave come from Profit; and funds for families in need of overnight postpartum support comes from Overnight Fund. Of course, when hiring any postpartum provider, you’re aware of how you’re paying for the care, support, and past experiences and education, but there’s more that goes into the behind-the-scenes of who you hire and how we run our businesses. Not everyone will be open to discussing business practices and financial priorities, but learning more about what to look out for can be helpful when you’re prioritizing your postpartum support needs and wants and a provider’s well-being.

I have worked in in-home private childcare both with agencies and independently, as an independent contractor (IC) and household employee, and as a postpartum doula (PPD), newborn care specialist (NCS), nanny, au pair, and babysitter. I’ve had a range of experiences with all of these- good and bad! And for various reasons, too.

This blog post is an introduction to some of the similarities and differences between my solo business and agencies to get you started on finding the best fit for your family. Hopefully this saves a little bit of time when searching for a postpartum provider!

My business

Through my business:

I provide transparency and a contract that is directly between your family and I, so all parties know what each other is signing and what’s expected.

• For instance, in a contract, do both parties know what to do when a client’s household family member is sick, whether that’s the baby, sibling, or parent? Who do the parents inform, if at all, when working with an agency? What happens if the family doesn’t inform of symptoms beforehand? How will the parties resolve or attend to that? It’s best to have matters like these outlined with providers, families, and agencies before they happen!
• I also often request a deposit or retainer for clients paying out-of-pocket (which is also what some other providers do) for contracts longer than a couple of days in order to book off time. Information on that, along with other aspects (e.g., obligations from both parties), are detailed in the contract.
• Tip: I’d recommend always have a contract between the provider and family – it is much more straightforward in expectations and respect for the people who will be interacting the most.
  • Tip #2: Continue the contract for any additional childcare with the provider, if something such as babysitting is in the cards, so you all know you’re still on the same page about things and have an agreement you can refer back to.

Families and I benefit from direct communication without a third party involved.

• There are times where, as a provider, I have felt that having an agency’s involvement has and hasn’t been helpful. When unhelpful, this is mainly due to blurring lines of communication and obligations with the agency and provider, which negatively affects my ability to work in a way that best supports the family and myself. Therefore, I think it’s highly beneficial to prioritize the most open, trusted communication with the person who will be in your home with you and your family. When both parties take initiative to develop the best employer/employee, or client/IC, working relationship possible (with or without an agency), this makes the continued relationship much easier, to where you can hopefully discuss and resolve any concerns more straightforwardly.

I have agency-required experience, knowledge, reliability, and professionalism even though I am not working with any agencies.

• If providers need to have the required agency standards (for some nanny agencies, this might look like a couple years of professional nanny/private childcare experience), and they’ve applied or are in the process of applying to an agency- they most likely already have the newborn and/or postpartum doula training, references, liability insurance, CPR/First Aid training and other qualifications! There are also other postpartum providers that don’t, or choose not to, work with agencies that have the required standards.

I have recent education on general child development research and knowledge.

• I can help guide and walk with you through the “click-bait” and information world we live in! Child development science has come a long way and there’s still a long way to go, which means we’re doing the best we can with what information we have. Parents can come to me with information they’ve read or heard, and we are able to discuss more details and potential concerns or questions. I provide more context to see the bigger picture which can involve looking for reputable resources to bring back to parents. I’m upfront about topics I don’t have knowledge or experience in and can refer you to someone else who knows more- especially if it warrants further discussion with a medical professional.

I can outsource to additional postpartum providers if needed in case of emergencies, but also cannot guarantee back-up coverage- similar to agencies.

• I don’t have a designated back-up, but there are a lot of local postpartum providers I know who could also support you!

I adhere to AAP standards, like Safe Sleep practices, when on my shifts and I also provide parents with information on other sleeping arrangements to reduce harm and risk.

• This includes information on co-sleeping and bed-sharing, even if parents never intend, or intended, to sleep that way.

I also have testimonials on my site (and Google Business reviews) from families I have worked with, and have families that can serve as references so you can talk more with them about my services.

Agencies

Agencies match families and providers, and can also recruit providers. People working with or for the agency might be ICs, employees, or the agency might have a mix of the two. Having employees could mean there is additional overhead costs regarding administration and salaries, in addition to other possible business expenses such as advertising and insurance. Having ICs mean that individual providers do not receive employee benefits and they pay more taxes with the self-employment tax (see Part 1 for brief detail on that).

If you’re interested in the required, general provider qualifications for that agency, you can usually find that information on the portion of the website where providers can reach out to or apply to work with the agency. Additional information specific to individual providers can be found in their bios if available online.

You can also find a little more about agency businesses by searching the internet on agency business plans and agency programs (nanny, newborn care, etc.). They mention profitability and lucrativeness, but may only list an outline of curriculums, however.

What questions to consider when looking for an agency:

How do they find their providers? Have the providers been with the agency for a while? How are the providers’ experiences working with them and do they feel supported, and how might you be able to find more information on this?

How do you pay the provider, and would they be an IC or employee? Do you pay the agency directly? What’s included in the contract(s) and who are the parties involved?

• If the provider is going to be a household employee, are payroll and contract support available for you and the provider?
• Do you pay the agency a finder’s or matching fee, and then pay the provider separately? Or do you pay the agency and then the agency and provider receive cuts of the rate? The agency’s cut might cover the matching portion of the work, among other things. Are there reasons why you might not be allowed to discuss rates with providers?
• Is a deposit or retainer required to book the provider? Will you have a consultation with the provider, and what is the process for when it doesn’t work out in-person?

How communicative is the agency about who they’re giving you and why (for both primary providers and for potential backups)?

So how can you start finding a best-fit postpartum provider on your own?

Word of mouth!

• Ask those you know, neighbors, or others in your town (or state if in Rhode Island since it’s a bit smaller than others!) if they know anyone or have any recommendations- you don’t know if you don’t ask! Local parent groups on social media could be a good start, too.

Get clear on your values and your priorities.

• What are you most looking forward to your provider supporting you with, for you and your baby? Some things might be learned “on the job” for both parties, especially when everyone’s still getting to know each other in the first few days and weeks, which is okay! But it’s best to address issues as quickly as possible, in case they could lead to further issues down the road.

Learn about your potential provider.

• While you don’t have to know every detail about each other (and a lot of the time it’s best not to too because these relationships are still based in professionalism – providers care immensely about your family’s well-being and this is still their work, job, and/or career), it is helpful to know that both parties care about one another’s well-being and interests as it relates to the work and the workplace. You can get to know what they like about childcare (and perhaps aspects they don’t like as much- we all know there are some hard days!) and what their childcare/rearing philosophies might be.

Hopefully the information in this post can get you started on the right path to thinking about finding support, whether you choose to work with a solo business or agency! For parents who have not, or have decided not to work with an agency, how did you find a postpartum provider? What questions did you ask the provider, and yourself, that you found helpful in your search?

Edited 12/15 to add notes on testimonials and references.