Profit is not a profanity in child care; at least, we shouldn’t treat it like one.
A recent report from IBISWorld shows that over the past five years, revenue in the daycare industry has risen at an annualized rate of 4.0% to $57.0 billion, including growth of 2.9% in 2019 alone. Demand for child care services doesn’t appear to be taking a dip anytime soon, and it’s expected to continue growing as a result.
Breaking into this industry isn’t an easy task. Costs can pile up while you establish yourself and get your footing. Once you move past the early stages, it’s time to focus on making your daycare a profit center on top of becoming a place for children to develop, learn, and socialize.
What Does Your Child Care Business Need to Be Profitable?
Below, we explore how you can drive profitability at your daycare and tap into its true potential.
A Well Trained Staff
Your staff is your team, and they are required to fulfill specific trainings and certifications. Each member should share your desire to deliver top-of-the-line care for each child at your daycare. However, it is up to you as the daycare owner to maximize their effectiveness and cut down on inefficiencies.
It’s important to consider your staff as an investment on their own. If you aren’t working to improve their role as professional child care providers, the quality of care will be limited, and you might find yourself dealing with high staff turnover rates, which can put profits on pause.
A well-trained staff will deliver the best possible experiences for parents and children at your daycare, but most importantly, it will ease the burden on your shoulders. That comes down to trust, something you need to build if your goal is to maximize profits.
Established Expectations for All Involved
Beyond having a well-trained staff, you need to establish expectations amongst not just your fellow providers, but amongst parents as well.
Holding yourself accountable for things like filing payroll, developing a curriculum, and keeping up with your facility are just as important as holding parents responsible for being on time with pick-ups, drop-offs, and paying tuition.
Dependability and consistency are the foundational pieces of your journey towards profitability. Once expectations are established, everybody can focus on improving and working towards the next goal.
Whether you need to leverage software for parent engagement to keep them involved, or you need assistance with your daycare accounting, there are ways to simplify challenging processes so that you can focus on taking steps forward, rather than going the other way.
A Balance Between Business and Customer Needs
There is no path to profitability that doesn’t include parents buying into your daycare center’s mission. What we mean is you need to understand your needs, and those needs need to be balanced with what the families of your daycare are seeking.
How parents interact with your business has changed, but their basic expectations for child care haven’t. They are still looking for providers that offer quality care in a safe environment, but interactions have changed.
Consider the push towards mobile payments, and how that has led to a rise in offerings like digital payment processing. These types of offerings play on how young parents rely on mobile devices and their expectation for 24/7 accessibility to payment services.
Creating an atmosphere for children that promotes learning, socializing, and fun is easier said than done, we understand that. However, such an atmosphere is what will lead to happy families.
If your daycare is a long-term business endeavor, happy families are your most valuable resource because they represent revenue-generating opportunities. In the best-case scenario, it will lead to glowing reviews and repeat customers.
Parents of the children at your daycare can be instrumental for bringing new families into the fold through word-of-mouth, which leads to more revenue without relying on marketing efforts that can be costly.
Striving for Profitability
Whether you are just getting started in the industry, or you have been up and running for years, there is no better time to work towards maximizing your profitability than right now. Reviewing your strengths and weaknesses is a good place to start.
Organizational tasks like tuition collection have a huge impact on your daycare's cash flow, and you might find that the process can be simplified or expedited by making the right changes. It could be how you budget your time and money, or it could be how you are managing essential family data. Regardless of what is holding you back, striving for profitability is a must.
The financials that come with operating a child care center can be stressful without having the necessary resources at your disposal. Profits aren’t the sole determining factor of child care success, but it will enable you to improve the quality of your care, staff, and facilities while providing value to parents who are trusting you with the development of their child.
Learn more about Tuition Express, and how it’s the most efficient and safest way to collect daycare payments and improve cash fl