If I ran a home day care, the dogs would be put away while any kids are here. It's a liability risk and I think it could make many potential parents nervous. It should be treated just as if you had a job outside the home. Dog in the crate while you work. Let out to play/potty while they nap maybe, put back in until everyone is gone. I wouldn't even bother introducing them, except to explain to parents that you have a dog and that although she is friendly, their children will not be interacting with the dog, ever.
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