Record Keeping and Compliance An often overlooked barrier to entry and successful business operations is the cost of compliance and record keeping. While most business owners are aware of the nature and number of directs costs associated with regulatory compliance (things like licensing costs, inspection costs, training and continuing education costs, equipment costs, changes to physical space), many indirect costs can be easily overlooked—especially those associated with reporting to regulators, paying taxes, and maintaining the records needed for both. All of these are real costs of the business owner’s (or employee’s) time which in many cases are not built in to the prices charged to clients. As part of the entry decision, and part of the determination of prices to be charged, the potential child care provider should look carefully at both direct and indirect compliance expenses to the degree these can be estimated. Child care organizations, local social and human services organizations, and other incumbent child care providers may be able to assist: the former with “standardized” costs for child care of a particular size and type, and the latter with actual numbers and the assumptions and circumstances from which they are derived. In addition, the Internal Revenue Service has, as part of its filing and reporting forms, an estimate of the time involved in completion. The potential provider can then make an estimate of costs of meeting compliance requirements that looks like this: Direct Compliance Costs: Licensing fees $__________ Training costs $__________ Required equipment $__________ Physical space rehab $__________
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