If it feels like the childcare landscape is changing right before your eyes, you’re definitely paying attention. The conversation around Universal Preschool and childcare providers is becoming increasingly important as more providers notice changes in enrollment—especially among preschool-age children who may be leaving programs earlier than they once did. But before you panic, lower your rates, or assume there’s nothing you can do, it’s worth taking a closer look at what these changes actually mean for YOUR childcare business. In this post, we’re talking about enrollment, income, knowing your numbers, and how you can start making smart business decisions based on facts instead of fear.
Has Universal Preschool Changed Your Childcare Business?
A while back, I was talking with other childcare providers about some of the biggest challenges they’re dealing with right now.
We talked about parents not following policies.
We talked about tuition.
We talked about enrollment.
And one issue kept coming up:
Universal Preschool.
Providers were seeing children leave their programs earlier than they used to. Some were having a harder time filling preschool-age openings. Others were simply worried about what was coming next. And as I listened, I completely understood the concern.
When you’ve been running a childcare business for years, you get used to certain patterns. A toddler enrolls. They stay through the preschool years. Maybe they leave when it’s time for kindergarten. You have a pretty good idea of how long a family might remain in your program, and you build your enrollment—and your income—around those patterns.
Then something changes.
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Suddenly, that four-year-old you expected to have for another year leaves for a public preschool program. And that empty space isn’t filling quite as quickly as it once did. That’s not just an enrollment issue.
That’s a BUSINESS issue.
And I think we need to talk about it.
First: Don’t Panic
When something big changes in our industry, it’s really easy to go straight to the worst-case scenario.
“Nobody is going to need family childcare anymore!”
“I can’t compete with free preschool!”
“I’m going to have to lower my rates!”
Hold on.
Before you start slashing prices, changing your entire program, or throwing your hands up and deciding it’s all over, let’s look at what’s actually happening in your business.
Universal Preschool may be changing the childcare landscape.
But that doesn’t automatically mean every childcare provider is being affected in exactly the same way.
Your enrollment may be changing.
The ages you’re serving may be changing.
How long children stay in your program may be changing.
The needs of the families looking for care may be changing.
That’s important information.
And instead of ignoring it—or panicking about it—we need to use it.
Your Old Enrollment Patterns May Not Be Your New Enrollment Patterns
Let’s say you used to enroll a two-year-old and reasonably expect that child to stay until kindergarten.
That might have meant three years of relatively predictable tuition from one enrollment.
But what happens if more families begin transitioning their children into public preschool at age four?
That enrollment may now last two years instead of three.
That’s a very different business model.
You may need to fill openings more frequently.
You may find yourself serving more infants and toddlers.
You might have to rethink how you market your program.
You may even need to look at whether your current tuition structure still makes sense.
And THAT’S why I don’t want providers looking at Universal Preschool as simply:
“I’m losing kids.”
I want you to ask:
“How is this changing my business model?”
That’s a much more powerful question.
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Please Don’t Automatically Lower Your Rates
This is one of my biggest concerns.
When enrollment gets slower, the natural reaction can be:
“Maybe I’m charging too much.”
Maybe.
But maybe not.
If a family is choosing a publicly funded preschool option, dropping your tuition by $25 or $50 a week probably isn’t going to change that decision.
Meanwhile, YOU still have:
Groceries.
Utilities.
Insurance.
Supplies.
Licensing expenses.
Training.
Maintenance.
Taxes.
And about 97 other things childcare providers somehow manage to pay for. 😩
Lowering your rates without understanding your numbers can actually make an enrollment problem worse. Now you’ve got fewer children and less revenue per child.
That’s not the kind of math we want.
This Is Where Knowing Your Numbers Becomes REALLY Important
I’ve talked before about how, for years, I floated along in my own business without really knowing my numbers.
Money came in.
Bills got paid.
I kept working.
And I assumed that meant everything was okay.
But there’s a big difference between having money coming into your business and actually understanding what’s happening financially.
Especially when the industry around you is changing.
You need to know things like:
How much revenue does each enrollment generate?
What’s the minimum enrollment you need to cover your monthly expenses?
What happens financially if you lose one preschool-age child?
How long can an opening sit vacant before it becomes a serious problem?
Are your current tuition rates actually supporting the cost of operating your program?
Those answers help you make decisions based on facts instead of fear.
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Let’s Look at a Simple Example
Suppose your childcare business brings in $6,500 during a typical month.
Your business expenses total $5,900.
That means your actual profit is:
$600.
Now imagine one child leaves for Universal Preschool and that enrollment represented $1,000 in monthly tuition.
Suddenly, you’re bringing in $5,500.
But your expenses don’t magically drop by $1,000.
Your mortgage or rent is still due.
Your insurance doesn’t care that Susie’s mom enrolled her in preschool. 😂
Your utilities still need to be paid.
Now that $600 profit may have disappeared completely.
That’s why saying:
“I’ll just wait and see what happens…”
isn’t much of a business strategy.
You need to understand what that empty spot actually means financially.
Then You Can Start Making Strategic Decisions
Once you know your numbers, the conversation changes.
Instead of:
“I’m scared Universal Preschool is going to hurt my business.”
you can start asking:
Should I market more heavily to families with infants and toddlers?
Should I offer something public preschool doesn’t provide?
Do working families in my area need extended hours or wraparound care?
Do my tuition rates need to be reviewed?
Should I change how I’m marketing my program?
How many enrollments do I actually need to reach my income goal?
Now we’re not panicking.
We’re planning.
And there is a BIG difference between the two.
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What Makes YOUR Childcare Program Different?
This is another conversation I think providers need to have with themselves. You don’t necessarily need to compete with Universal Preschool by trying to BE Universal Preschool. What does your program offer that families value?
Maybe it’s:
- A smaller group environment.
- Mixed-age care that allows siblings to stay together.
- A home-like atmosphere.
- More individualized attention.
- Longer operating hours.
- Meals.
- Flexibility.
- A strong relationship with one consistent caregiver.
- Convenient care for younger siblings.
- A specific curriculum or philosophy.
- Your years of experience.
- Your community.
Your program has value. The goal isn’t to convince every family that public preschool is wrong for them. It’s to clearly communicate why your program is right for the families you’re best equipped to serve.
But You Can’t Make Good Decisions Without Good Information
This is where I want you to start.
Before you change your rates…
Before you completely overhaul your program…
Before you spend money on advertising…
Before you decide Universal Preschool has ruined everything…
Look at your numbers.
What is actually happening?
Not what you THINK is happening.
Not what another provider said is happening.
Not what you’re afraid might happen six months from now.
What’s happening inside YOUR childcare business?
That’s exactly why I created the Daycare Money Manager.
It’s a simple system designed specifically for childcare providers who want a clearer picture of what’s happening with their business finances.
It helps you look at your income, expenses, profit, progress, and financial goals so you can stop guessing and start making more intentional decisions.
Because knowing your numbers gives you options.
Universal Preschool May Change Your Business—But That Doesn’t Mean It’s the End of Your Business
The childcare industry has changed before. It will change again.
Families change. Technology changes. Regulations change.Costs change. Enrollment patterns change. And successful business owners learn how to pay attention, adjust, and keep moving.
So if Universal Preschool has affected your enrollment, don’t ignore it. But don’t panic either. Get curious.
Look at your enrollment patterns.
Look at your expenses.
Look at your income.
Look at the ages of the children you’re serving.
Look at what families in your community need NOW.
And then make decisions based on what the numbers are actually telling you. Because you can’t always control what’s happening around your childcare business.
But you CAN get much better at understanding what’s happening inside it.
And that’s a very powerful place to start.
