This post was contributed by Tiffany Darwich, owner and managing director at The Good Life Preschool in Oregon.
If you’re thinking of opening a preschool or childcare center in 2021, most of your friends will tell you that you are absolutely crazy. After all, there’s always a risk with a new venture! Childcare was hard before the pandemic, and it’s even harder now. However, the reward is priceless when your job is to create a community that trusts you to create a safe and loving environment and develop a solid foundation for little minds.
I want to share with you some tips that I wish I would have known—and some that I learned along the way—when I decided to embark down the journey of opening a preschool six years ago. There are some things that went well, some challenges, and, of course, some things no one could have prepared us for.
If you’re thinking about opening a preschool or childcare center, or maybe even recently opened a center, here’s the advice I’d like to share with you from my own experience!
1. Do your research on early education options in your market.
How many early childhood education centers are there in your area? How many families with small children live in your zip code? Are there long waitlists, or are the existing centers struggling to fill enrollment slots?
You don’t have to pay a consultant to analyze the entire market, depending on the size of the center you’re planning on opening. The majority of prospective childcare owners don’t have the extra funds to spend on consulting fees in the beginning. With that being said, if you’re going to do your own research, make sure it’s solid and based on up-to-date information. Do not simply trust your gut to lead the way or move forward with a business plan that’s based on wishful thinking!
2. Focus on a niche or a need in your market.
As you get to know the existing options in your market, you may find gaps that could be the perfect opportunity for your program. What types of childcare programs have waitlists? What programs are missing in the market?
This could be:
- Bilingual programs
- Play-based programs
- Pre-K programs that prepare children for kindergarten
- Programs that focus on social-emotional learning, music, yoga, gymnastics, art, or STEM
- Programs for a narrow age group (infant, toddler, preschool, pre-K, school aged)
- Or anything else that serves a specific need.
Shop the market by calling into other preschools and ask them what they are seeing, if they have a waitlist, and if they would share what their tuition range is. Sometimes the tuition rates, schedules, and ages they serve are available on their website or Facebook pages.
3. Create a unique vision that will set you up for success.
Setting a vision from the beginning will help you shape what makes your program unique. What do you want children and families to get out of your program? What will attract top talent staff to work for you? What ages will you serve? What is the planned layout for your classrooms/buildings?
As you develop these ideas, you can start to get a clearer sense of what you’ll need to build a successful business.
4. Talk with prospective parents early on.
Gather a focus group of parents in your area with small children. Share your vision and ask them questions.
- What are their frustrations in finding quality child care?
- What do they currently pay, if they’re enrolled in a program?
- What would they pay for quality child care that’s just the right fit?
- What type of schedule do they need?
- What is missing in their current childcare setting?
Take all their feedback on what they want for their child. While you don’t have to try to fulfill every single need, this information can help you determine potential strengths for your business.
5. Join childcare Facebook groups for your local community.
Start listening to the frustrations and things to avoid from other providers. Build your community of support. Even though you may be a competitor in the near future, childcare providers are in this together, and most support each other. Even if you just serve as “eyes and ears” in the beginning, your fellow childcare providers are a source of strength.
6. Reach out early to your State Childcare Division that will become your licensing specialist.
Do this as soon as you have a vision, location in mind and ages you are going to serve. Ask if there is anyone that can walk you through best practices or pitfalls to avoid when opening a new location. Not all states’ agencies will be super helpful, but it’s worth a try!
7. Start working with your City or County well ahead of time.
Reach out to start the conversation with the zoning and planning agencies on timelines, costs, process, applications, permits, and regulations. Some cities and counties are easier to work with than others, so prepare for the process to take a while.
Know that it’s likely to take twice as long as you think, and there will be unexpected costs along the way. Create a cushion in your financial plan for the costs associated with all of the permits and inspections you’ll need.
8. Be patient and persistent when hiring staff.
I wish I could tell you that staffing would be easy, but it is one of the hardest jobs of a director during COVID-19. Many early education professionals have shifted to nannying or working with pods of just a few families.
Reach out to local community colleges or universities in your area and see if they will post jobs for you. Find out if they could set up internships/practicum experiences for their students to substitute teach or assistant teach at your center.
Create a list of substitutes and keep them engaged. You can share subs with another preschool in your area, especially during cold and flu season. You can never have too many subs! With COVID safety protocols, you need to plan for more sick days as teachers can’t risk coming to school sick, even if it’s just a cold.
9. Lean on your community for funding.
It’s expensive to start up a childcare location or center, so use your community to help you! If you’ve found families who are eager for a new provider or center, reach out to them. Some will be more than willing to help by volunteering their time, contributing funds, paying in advance to reserve their spot, or even donating supplies or furniture.
Learn the options for loans and grants for childcare businesses in your area. Reach out to the Social/Economic Development Committees (SEDCOR) in your community to find out about upcoming or currently available childcare grants.
10. Be realistic with your financial plans.
Create a budget with the current funds you have vs. what you would need. Calculate rent, utilities, supplies, equipment, staffing costs, and all of your other startup expenses. For new classrooms, estimate about $5000 per classroom to set up. (This may be higher or lower depending on your location and whether you are buying new or used equipment.) When in doubt, ask other childcare providers what their upfront costs were.
Many centers aren’t profitable for the first 1-2 years, depending on the size of the center and how long it takes to fill the spots. Make sure you have enough capital to see you through those first couple of years until you have an established customer base.
Once you have your expenses figured out, then you can calculate what you will need to charge for tuition—and compare that to the average of childcare in the market. You may be able to charge more than average if you offer more than other programs in your market (organic food, speciality programs, etc.) and the demand is there.
Also, find out the DHS childcare rates for your location for subsidies for low income families. Keep in mind you would have to apply separately from your child care licensing and be approved to take state subsidy payments.
11. Don’t wait until you’re open to start marketing.
Market your childcare business and start a waitlist of parents so that when you’re finally open, you have students ready to go. You can offer incentives for referrals, such as half off a registration fee for referring a friend.
Find free childcare groups where you can announce your new business starting up and to reach out to families who are interested. Make sure you have an online presence for your center, including listings on Google, Yelp, and Facebook.
12. Use childcare software to save a ton of time and energy.
Get an all-in-one software solution that will help you manage your business. I have used brightwheel for years and honestly couldn’t live without it in my business. Here’s what I look for in a childcare or preschool management app:
- Seamless communication to parents and staff
- Attendance monitoring and ratio checks
- Injury and accident reports
- Health checks required for COVID
- Assessments and learning goals
- Photo sharing with families
- Allergy notes
- Most importantly, a parent app that lets them see what their kids are learning and doing in your program
- And don’t forget online tuition billing, so you don’t have to chase around payments!
I honestly wouldn’t open a childcare business without having childcare software in place. It will easily pay for its subscription by saving you countless, precious hours in your day!
Good luck—you’re going to do great!
Hopefully some of these tips have given you some inspiration as you start a successful childcare or preschool business. And, if you recently started your business, it’s never too late to add to the toolkit of useful tips and tricks to help you succeed.
Wishing you much success in your new or upcoming adventures in childcare! Kudos for doing what you do and building the foundation for early learning.
About the author
Tiffany Darwich is the owner and managing director at The Good Life Preschool in Dundee, Oregon.
Brightwheel is the complete solution for early education providers, enabling you to streamline your center’s operations and build a stand-out reputation. Brightwheel connects the most critical aspects of running your center—including sign in and out, parent communications, tuition billing, and licensing and compliance—in one easy-to-use tool, along with providing best-in-class customer support and coaching. Brightwheel is trusted by thousands of early education centers and millions of parents. Learn more at mybrightwheel.com.