How Daycares Save Money

A well-managed child care centre provides many rewards for its owners, especially in the gratification of providing exceptional care for children and families. Early childhood learning plays a major role in a young person’s later success.

Knowing your centre has a lasting positive effect on today’s kids is certainly priceless. But saving money is an important aspect of a well-run daycare business. Despite tight profit margins and increasing competition, your centre can operate efficiently.

 Below are four methods for building your centre’s profits. Then, we explore four methods of cutting costs to ensure the good health and prosperity of your centre.

Four Ways Your Daycare Can Increase Profits

Focus on Enrollment

 Because of fixed costs, you need to maximize your centre’s enrollment. Your operations are most profitable when enrollment stays close to capacity. At enrollment of about 80 to 85 per cent of capacity, your profits start rising considerably. Although a higher number of children means you need more materials and staff, you will still enjoy higher profits.

Monetize Your Center’s Down Time

Your centre’s downtime still costs you money. The most profitable child care centres know how to monetize their downtime to offset fixed costs. Because daycare facilities are generally only used five days out of each week of seven days, you have two days that drain your profitability. Evenings also decrease your asset usage rate.

 Consider making your facility available to organized groups or companies during closed hours. There are many groups that need meeting space in the hours during which you do not operate. These include scouting groups, churches, support groups and yoga programs.

You can also provide space for kids’ birthday parties. Check your market’s going rates for space rental for these types of events to stay competitive and start making your availability known.

Make Marketing a Big Priority

 Online marketing is a big driver of your business. The Internet is where today’s parents first go to find “daycares near me.” To achieve visibility online, you need a good website and SEO. Ensure your centre is listed in key directories providing businesses like yours with qualified leads. Some directories book parent tours for you and literally bring families to your door.

Bill Weekly

 Despite some minor downfalls in weekly billing, this method can increase your profitability and save you money. Consider the reality that billing monthly sets the same rate for months that have five weeks instead of four. There are 52 weeks in the year and only 12 months.

If you bill $1000 per month per child, monthly billing pays your centre 12,000. But if you bill weekly, your centre takes in $13,000. If your centre enrollment is 50 children, this provides another $50,000 per year for your bottom line.

 The downside of billing weekly is having to exert more effort in securing payment from families who tend to pay late. You also have more trips to the bank and more data entry to complete. But, the increased revenue certainly justifies the effort.

Four Ways Daycares Save Money

Save on Toys, Equipment and Materials

 Shopping around for the best pricing on toys, equipment and materials can certainly save your child care centre money. Options include buying some equipment used, such as utility furniture, office equipment, electronics and other basics. Otherwise, pay attention to upcoming sales and buy supplies when the price is right.

Hire the Right Staff

 Having quality staff is key to your profitability and overall success. Caring teachers are one of the best ways to increase enrollments. Ensure you have the best staff to attract parents and children and keep your centre at the top of parents’ referral lists.

Appropriately screen them before hiring, foster teacher growth and hold onto your good employees through competitive pay, career advancement and incentives.

Operate More Efficiently

 Focus on running your centre efficiently to save money. Appropriate efficiencies include straight-forward pricing, weekly billing, clearly defined schedules and defined paperwork processes. You also need a good operation manual with updated job descriptions.

One of your centre’s best investments for efficient operations is software or cloud services, such as online tour booking, online marketing and waitlist management.

Keep Your Center Organized

 Every childcare centre has a lot to track, from staff and children to daily tasks. This litany of operational needs makes childcare management software critical. But you also need to organize your marketing, such as through a social media content calendar. Use automated email systems, such as drip campaigns after parent tours, auto-responders and billing reminders, too.


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