It is always a pleasure to share these pages with like-minded people. Usually, that is with my fellow providers and readers of this blog. But today it is my pleasure to introduce a contributing writer to Thrivingchildcare.com. Open a Successful Child Care Business
Denetra Scott is a respected friend, fellow childcare business owner, and coach. When she accepted my invitation to share her wisdom with my readers I was thrilled. I know you will be too.
For many providers starting their childcare in their home is just that, a start. I know many providers have a desire to move their business from their home into an outside setting. In this post, you will learn as Denetra gives a step-by-step process for taking your home-based business and transitioning to a brick and mortar childcare business.
So if you have been considering or even wondering what are the steps to move your childcare outside your home, this is the post you’ve been waiting for.
How to Open a Successful Child Care Business
Having a family daycare is a rewarding business. But let’s face it, the long hours, parents taking advantage, the daycare taking over your home, not being able to tend to your personal needs, being chained to your home 10-12+ hours a day is enough to make you wish you had another way to make money while having the flexibility you thought having a family daycare would bring. Maybe you have wondered if you should think about sheading the home digs and how to open a successful child care business.
You want to continue providing the best for children, so naturally, you may desire to open a childcare center. If you are considering transitioning to a childcare center, this post will give you some valuable information on how to get started. Here is a 5-step process for how to open a successful child care business
Step One: Ask yourself a few questions
- Why do you want to open a childcare center (for your family, for your business)?
- Are you willing to lead and discipline grown people?
- Are you in good health?
- Will your family be supportive?
- Do you struggle to pay your bills? Are you able to save at least 4 months living expense?
- Are you willing to deal with conflict and confrontations?
- What are your weakness and strengths?
These question will help you get clear on what needs to be done to reach your business objectives.
Just because you build it doesn’t mean they will come.
Step Two: Do your research. Open a Successful Child Care Business
This is an area many people skip, then they pay the price (literally) once they open their doors. Just because you build it doesn’t mean they will come. To start a successful child care business, you need to know the temperature of the market in your area. Open a Successful Child Care Business
- Are parents happy with the current supply?
- How many childcare centers exist?
- Do they have a waitlist or are they struggling to get children enrolled?
- What are the trends, opportunities, and threats happening in your area?
- Do most parents pay out of pocket for childcare or do they receive childcare assistance?
- What makes your competitors special?
- What are they lacking?
- How will you be different?
Your research should also include being aware of the barriers of entry. Child-care licensing, city/county building and planning departments, health department, fire department…these are the agencies or organizations that can stop you in your tracks! And you can’t pass go until they say so, lol!
Know what they want from you before you spend any time or money getting started. More and more cities are creating documents to help guide you along the process of opening a childcare center. Open a Successful Child Care Business
A word of caution: Do not count on licensing to tell you everything you need to know about opening a childcare center or creating a successful one. That’s not their job. Their only purpose is to ensure the health and wellbeing of the children you will serve.
Here is a link to find your local child care licensing agency. https://www.childcareeta.aef.hhs.gov/licensing
Step Three: Facility Search
Decide on the type of facility you want. Do you plan on building from the ground up, buying an existing center, or leasing a building and doing renovations to meet licensing and city standards?
When starting out, I always suggest leasing. Try to find a building that was formerly a childcare center. Taking this route will require less money upfront, and it will give you the opportunity to establish yourself while growing through the stages of childcare business ownership. In other words, it allows you to get your feet wet without risking enormous amounts of money.
I am often asked if a childcare center can run out of a house, even if you do not live there. The answer is usually NO. Cities have rules about keeping the integrity of residential neighborhoods residential.
Family daycare is an exception and a few other home-based businesses are an exception. You may be able to find a childcare center nestled in a neighborhood, but chances are that they were grandfathered in.
Step Four: Funding your Business
Let me say this now, grants are hard to acquire for start-up service businesses. To qualify for a grant, in most cases you will need to be nonprofit and have matching funds.
Most people fund their venture with personal savings and/or with the help from family and friends. Bank loans will require that all owners have excellent credit, low income/debt ratio, collateral, and 20% loan value.
Whether you decide to apply for a loan or self-fund, doing a 12-month cash-flow projection (including start-up cost) is strongly suggested. This will tell you how much money you will need to get started. Be conservative on your revenue for the first year and liberal on your expenses, especially when it comes to staff.
Word of caution: projections are a funny thing…you can make numbers do whatever it needs to do to make your plan work on paper. Always get feedback on your projections from an accountant or experienced business owner. They will be able to spot the holes in your projections and let you know if your numbers are realistic.
Optimism is necessary but when it comes to numbers, being conservative and realistic will increase your chances of success.
Step Five: Hiring your Team
Choose carefully. Never be in a hurry to hire someone. Staff can make or break your business.
Before hiring anyone, you must be clear about core values and mission. Be able to clearly articulate your vision and mission in writing and verbally.
Having a childcare business can be very rewarding.
Only hire those that share your core values and the vision of your business. It’s important to have someone that you can trust that can oversee things when you are out of the center.
I just listed the basic steps in opening a childcare center. These steps have other steps, but I’m not able to get into everything here.
Having a childcare business can be very rewarding.
My best tips to Open a Successful Child Care Business:
- Do your research… it’s a continuous process
- Pay off your debt and have a savings of at least 4 months living expenses
- Know licensing regs in and out…don’t be afraid to call them and ask questions
- Get to know your competitors and what parents want
- Start lean and grow as your skill and knowledge grows.
- Have a plan even if you aren’t applying for a loan
- Find your right-hand-man(woman)…you will need someone you can count on.
For providers who are considering transitioning from home to facility, I hope this helps. Can’t wait to read your comments and answer any questions you may have.