The Childcare Industry
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Part of the discovery phase of opening a daycare is to learn not only historically what has gone on in the industry, but what does the landscape look like today and what do we anticipate the future to unfold??
So ask yourself, what is significant about the childcare industry, and is this a space I want to be in??
In this lesson you will learn the following:
Historically, child care has been under-appreciated and is often one of the least recognized industries I know; Even the word daycare can be perceived as a business that offers babysitting services, not one that educates or promotes learning.
But I’d like to challenge you… Early education professionals are just that… professionals. Most schools today place a priority on education and learning in addition to safety and caring for the children in their classrooms. Our teachers and educators recognize that they are responsible for shaping the youngest of our generation and preparing them for school readiness and even, and many of us go so far as to say we are responsible for helping with the development of building a strong and respectful character in our students.?These responsibilities alone assume a much more excellent resume than babysitting.?
In terms of our workforce, historically, teachers have been faced with low pay, and poor benefits leading to high turnover rates in schools.?
Finally, looking back on the financial success of running a school, daycares in the past and today have often operated on razor-thin margins. This is why it is of great significance that you know your numbers, how you should be performing in various financial categories and how to be innovative in order to maximize revenue opportunities.
Yet don’t be discouraged or feel down about the childcare space! This is one of the most rewarding and most needed careers you can imagine.?
Child Care is a major element of the infrastructure within our communities. Without daycares, families would be unable to work. Communities would be restrained by a lack of childcare.?
What does today’s landscape look like and if I'm considering starting a childcare center??
Battle with the supernatural: Every region has its own specific circumstances they have to face whether it’s hurricanes, tornadoes, floods, or earthquakes.?
These types of supernatural obstacles are things we can't prevent but definitely things we can be prepared for. Just like the pandemic. We would characterize this as a supernatural event and it's one that our schools have continued to overcome.?
Our industry is beyond resilient and that is another reason many entrepreneurs see starting a daycare as a great investment.
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Workforce Crisis: For the programs that avoided permanent closure during the pandemic, one of the biggest challenges has been recruiting and retaining enough staff to stay open and return to full enrollment. This was already a stress before Covid and has become much worse since.?
A number of proposed policies and legislative efforts aim to bring new respect, consistency, and an infusion of funding to the early childhood sector. Our country overall is facing a workforce crisis.?
There are 9.2 million unfilled jobs, and as a result, too many businesses can’t grow, compete, and thrive. A critical barrier standing in the way of Americans getting back to work is child care.?
We have to continue to fight and be vocal as in industry to ensure our legislatures and leaders have a clear understanding of what we need in order to remain an effective piece of infrastructure for our communities.
Turnover:?Staff turnover is an ongoing battle. Many schools face problems with turnover, however, I always like to challenge this because a healthy culture, hiring the right fit, and leaders that are not only prepared and coached on how to be good leaders, but also come to work daily energized, can retain staff.?
Constant Change: Our industry seems to be constantly changing. Schools have had to learn to pivot and innovate due to the effects of the pandemic.?
Overall our industry is constantly evolving but that isn't necessarily an obstacle - I see that as an opportunity. Many of our schools have become way more successful because of how agile and creative they had to be during the pandemic. I don't believe this innovation and creativity will stop.?
Financial: Margins are smaller. Unfortunately, we have new financial benchmarks now due to the increased staffing costs, increased cleaning and supply costs, reduced classroom capacities, and so much more.
Don't be discouraged, however,?you can make 15-30% profit off your gross revenue by managing your milk and cookies, knowing your numbers, and pricing yourself correctly in the marketplace.?
Alternatively, there are many opportunities in today’s landscape.
Grant Opportunities: Most states of major revitalization programs provide influxes of cash for schools to use to not only incentivize their staff, and pay more, but also to improve their programs and schools. We don’t anticipate these funds drying up anytime soon.?
Revenue Opportunities: When we are able to hire in our schools, all rooms have waiting lists of families needing care. There is a definite nationwide shortage of childcare centers to meet the demand.??
Innovation: Overall, the early education space is in a time right now where we are becoming more creative, we are incorporating cool technology and techniques in our classrooms. Teachers are able to impact children in many different?
Yes, it’s where you want to be!?Overall this is still a very viable, and very solid industry to invest in.?
Interest in entering and growing in the industry has never been stronger. With the 10 largest companies reporting more than 8 percent growth since 2020, and a reported intention to continue this growth into 2023 - there is a strong indication that stakeholder expansion will continue.?
The pandemic revealed the importance of childcare in supporting our nation's economy and made it clear to business leaders and policymakers that investment in this essential infrastructure is crucial.?
Our children and families need quality, creative, and innovative new schools. Is that you?