Home Daycare

Advantages

• Less expensive to start. Compared to starting a daycare center, a home daycare is less expensive to start, making this reason the single biggest advantage home daycare has over daycare centers. Starting a home daycare with a capacity of 5 children can cost you as little as $1,000 in equipment, supplies and learning materials such as arts and crafts, toys, and books.
• Operational cost is less. Your operational costs will also be much smaller compared to a daycare center. For instance, you have the flexibility not to charge rent to your business since it is your home that you are using. This also gives your business a higher chance to succeed.
• Parent preference: one-on-one interaction. Some parents prefer home daycare centers because a home daycare can only accept a smaller group of children, giving their child more opportunity for one-on-one interaction.
• Licensing requirements are less stringent. Licensing requirements for home daycare centers are often less stringent, making it faster to start the business compared to a daycare center.

Disadvantages

• Limited capacity. Compared to a daycare center, the number of children you can accept will be limited by your local bylaws or state or provincial laws, and dependent on the space you can allocate for childcare services in your own home. Often the space you can allocate will be limited to one or two rooms in your house without the business significantly encroaching on the other parts of your home life. As a result, this limits your earnings potential.
• Family life mixing with work life. Running childcare services in your own home can potentially encroach with your family life. This can sometimes cause stress or issues with other family members.
• If you are ill. If you get sick, you may need to close your childcare services for a few days and notify parents about the situation. Aside from losing income, parents may become upset that they will need to urgently find alternative care.

Daycare Center

Advantages

• Known to have structured programming. Since daycare centers are regulated and operate under strict guidelines, parents have the comfort of knowing that there is structured programming for child development (e.g. cognitive, gross motor skills, fine motor skills, etc.). Unlike Mrs. Jones down the street running a home daycare, parents also know that qualified teachers with formal training are hired to take care of their child. This attracts parents to licensed daycare centers.
• Safe and secure. Through the state or provincial licensing process, parents know that daycare centers are required to comply with various rules relating to safety, health, security and sanitation.
• Bigger capacity. Relative to a home daycare, a daycare center has a bigger space, which can accommodate more children. Larger capacity can potentially generate more revenue and income.
• Daycare services continue even if you are sick. If you are sick and cannot come to the center, you have staff to continue and operate the daycare.

Disadvantages

• Expensive to start. Compared to a home daycare, building and starting a daycare center is more expensive. Renovating a commercial space to comply with various building codes and childcare licensing requirements can become very costly and will require more capital to start.
• Operational costs are higher. Unlike a home daycare, you have rent commitments specified in a lease agreement for a certain period of time. In addition, due to the larger space, you will have to pay more for utilities and maintenance. As a result, operational costs are higher compared to a home daycare.

Buying a Daycare Business

Buying an existing daycare involves investigation to determine the state of the business. Through careful investigation, you should be able to determine if the business is worth purchasing. That is, proper analysis gives you the comfort that you are getting what you pay for. Buying a daycare business is not a simple feat and you should consult with experts such as business valuators, brokers and lawyers before undertaking such a transaction.

There are advantages of buying an existing daycare business. Assuming it is profitable, the business is cash flow positive, which is a key advantage compared to starting a new center. A profitable business gives you the confidence that you are getting some returns on your investment. In addition, an established daycare center is already known within the local community. Whenever a family needs childcare services, it is almost certain that they will consider an established center, reducing the need to spend money on marketing.

While the advantages of buying an existing daycare center is compelling, It has its own disadvantages as well. Buying an existing daycare center may require you to inject more capital for renovations and working capital. In many cases, daycare centers for sale are old and in need of some repairs. Moreover, an existing business will have an existing culture. This culture is carried over and may not be consistent with what you envision the center to be. You may also inherit bad staff.

Starting a New Daycare Business

Starting a new daycare business from scratch requires you to research, determine and assess all costs associated with starting one and may include but are not limited to the following:

• Renovation costs. Includes materials and labour - electrical, plumbing, mechanical (Heating, Ventilation and Air Conditioning or HVAC), drywall frames, etc.
• Professional fees. Includes architect and construction supervisors
• Permit fees. Includes all types of building permits from the government
• Furniture and appliances
• Toys and learning materials
• Outdoor playground equipment

Total cost to start a daycare center will vary and will depend on several factors such as construction materials used, amount of toys and materials, and more importantly, the size of the center. For instance, little capital or minimal cost is needed to start a home daycare. In contrast, a large daycare center operated in a commercial space will require large investments to get it started.

Compared to buying an existing daycare business, there are advantages of starting one. You can design the center specifically to your requirements. You have the flexibility of implementing all your ideas. In addition, you can set your own culture and implement your own policies and procedures with ease.

However, starting a new daycare business also has its disadvantages. The business may not be cash flow positive for some time. As a result, you will need to maintain a certain level of working capital or inject more money until your business reaches breakeven. In addition, you will need to spend more effort to market your daycare since it is new and not yet established - i.e. its brand and presence are unknown to the local community.

Also remember that the choice of the advertising medium you should use will depend on your local market’s acceptance towards specific advertising channels - that is, some advertising strategy will be more effective than others depending on your target customers’ taste and preferences. Over time and with experience, you will learn which advertising strategies are the most effective in terms of response rate and cost.

The following are more advertising strategies that are commonly used by daycare centers:

Open Houses

You can conduct regularly scheduled open houses to provide potential customers an opportunity to tour your daycare center.

Newspaper Ads

Please explore the idea of posting ads in your local newspapers, specifically your community newspaper, if available. Community newspapers are delivered and read by people in your local market. Having your daycare center ad posted in the newspaper creates visibility and business presence around your community.

Schools

Visit the elementary schools around your neighborhood. Speak to the principal and staff about your daycare center service. School staff are great referrals to daycare centers around the community. In addition, the principal may allow you to post your daycare center ad in their school’s bulletin board, which is viewed by many parents.

Word of Mouth

By continually providing excellent quality childcare services, word of mouth naturally follows. You accomplish this by maintaining a daycare environment that is of the highest quality through your center policies and procedures. If your daycare center is not full, let everyone know that you are looking for more children to care for. For daycare centers, many customers are generated through referrals and word of mouth.

Community Events

Community involvement activities position your daycare center as a company that cares about the community. This sends a message to your prospects and customers that is often aligned with what they support and value, and it makes them feel good about being your customer. This generates good will, and genuine interest in your services. Word-of-mouth normally follows as well.

Flyers

Distributing flyers is also a very good advertising strategy to generate potential customers. With flyers, you have the ability to deliver your daycare information to every house in your neighborhood. This quickly generates awareness and business presence around your community. Please ensure you deliver flyers to new housing subdivisions and apartments. Apartments are great location for flyers because of its high turnover rate - that is, families are always moving in and out of apartments, providing a constant supply of new families with young children.

Other Advertising Ideas

Other promotional methods that could be utilized are listed below:

• Have a yard sale and distribute information about the center
• Develop giveaway hats, bookmarks, t-shirts and mugs that bear the mark of your daycare
• Sponsor workshops for local Early Childhood Educators to be held at your daycare
• Participate in a community clean up fair; invite families and staff
• Children’s Christmas concert
• Build your own daycare newsletter to be distributed to parents. The newsletter should contain articles and information that is relevant to the parent (e.g. new staff in your daycare, craft activities that parents can do with thier children, etc.). Naturally, this will create word-of-mouth as well.
• Create posters and post them in community bulletin boards

The key advantage of a sales process lies in its ability to replicate the steps used to generate a high rate of customer wins or parent registrations. Your goal now is to build a sales process that can be followed consistently, and will give you the best chance of winning customers. A sales process, however, is more than just a diagram and its steps or stages. A complete sales process should include forms, marketing collateral, sales scripts, checklists and other items to support each stage of the process. You should allocate time to build your sales process, along with its collateral and a pre-enrollment package.

A pre-enrollment package should be given to the parent at one point in the sales process. It should contain both marketing items (e.g. magnets and program highlight sheets) and materials that the parent needs to be aware of before registration such as: (1) a fee schedule specifying your daycare program fees, and (2) a Parent Handbook informing parents all policies and procedures applicable to him/her (e.g. payments, deposits, late fees, vacation policies) and to the staff (e.g. health and safety policies, behavior management policies).

A daycare tour checklist is also suggested. The checklist ensures that all daycare highlights and information are presented to the parent during a tour of your daycare, increasing the chance of a customer win.

A sample sales process used in most daycare centers involves the following stages presented below:

1. Parent Engagement

Naturally, all your marketing campaigns such as distributing flyers will generate leads - that is, parents will call you to express their interest in your daycare service. During this engagement, politely answer all of the parent’s questions or inquiries. At the same time, highlight unique programs and features of your center. The ultimate goal at this stage of the sales process is to schedule the parent to come in for a center tour. It is suggested to have scripts or talking points prepared at this stage so that you do not miss any important details during your conversation (e.g. phone) with the parent.

2. Daycare Tour

Being the most important stage in the sales process, this stage allows you to show, present and highlight your daycare programs, activities and services to the parent in person. Parents can decide much better once they have physically seen the environment their child will be in. If you successfully deliver a very pleasant tour experience, your chances of winning the customer increases significantly. It is highly recommended that you have a checklist prepared so that you do not miss important details during the tour. In addition, provide the parent a pre-enrolment package as described in this article above after the tour is completed.

3. Child Registration

As the final stage of the sales process, child registration stage is when the parent has decided to register his / her child in your daycare. Provide a pleasant registration process by giving the parent an enrolment package consisting of various forms that the parent needs to sign such as your sickness policy form and child registration form. Giving a positive experience to the parent all throughout the stages of the sales process goes a long way in retaining the customer, as well as making them talk about your center positively throughout the community.

For more daycare marketing tips and strategies, you can visit the marketing section of this How to Start and Manage a Daycare online tutorial.

For other topics on how to start and manage a daycare center including home daycares, please visit Parent Relief’s Resource section.

For instance, if you provide childcare services for a family and would like to bill the family every Monday, you can set up bizAdvantage to automatically generate recurring charges for the parent’s account on a weekly basis.

As shown below, recurring transactions are generated by recurring transaction profiles, which you will need to create for each family account. Each profile you create contains the following information:

• Schedule. The recurring transaction profile will generate recurring transactions based on this schedule. Schedule can be weekly (e.g. every Monday) or monthly (e.g. every 1st of the month).
• Amount. Transaction amount. The recurring transaction profile will generate recurring transactions equal to this amount.
• Run Until Date. Specifies the date the recurring transaction profile ends. In other words, the recurring transaction profile will continue to generate recurring transactions based on a schedule up to this end date.

For step-by-step bizAdvantage instructions on how to add a recurring transaction profile for a family account, please refer to the following links:

• What is a recurring transaction?
• What is a Recurring Transaction Profile? How does it work?
• How do I manage an account’s recurring transaction profiles?
• How do I add a recurring charge profile?

You can also refer to these specific examples for more information:

• I want to create an automatic recurring charge of $100 for a parent account every Saturday for 2 months. What should I do?
• I want to create an automatic recurring charge of $100 for a parent account every 1st of the month for 1 year. What should I do?

You will need to try different advertising methods to identify channels or strategies that are effective in your local market. Over time and with experience, you will learn which advertising strategies are the most effective in terms of response rate and cost.

The following are advertising strategies or ideas commonly used by daycare centers:

Directories

Ensure that your contact information is in your local phone directory, e.g. Yellow Pages. Yellow Pages (online yellowpages.com and book format) is still a very popular directory that thousands of parents use to search for daycare centers.

Brochures

You should have a brochure of your daycare center outlining all relevant information such as programs, fees, teachers, and the overall learning philosophy. Very easy to distribute, brochures are an excellent medium to convey center details to potential customers.

Daycare Registries

A daycare registry (or directory) is a list of daycares around your neighborhood managed by an individual, agency or a referral center, which generally serves your local area. Its sole purpose is to help parents find childcare providers. Please ensure you list or include your daycare in daycare registries in your market. To find active daycare registries in your area, ask other providers or look in the phone directory (e.g. Yellow Pages).

In addition, there are many daycare registries available on the Internet including Parent Relief (www.parentrelief.com). Most online daycare registries allow you to include your daycare’s basic contact information at no cost at all. Furthermore, many online registries provide parents with a search engine, making it easy for them to search for your daycare quickly. As more and more parents turn to the Internet to search for daycares, online daycare registries are becoming extremely effective in generating potential customers.

Please ensure that you register your daycare in Parent Relief’s Online Directory. Parent Relief’s focus on children’s services makes it the premier online directory for parents who are looking for children’s service providers to fill their needs. By listing your services in our online directory, you can reach thousands of potential customers.

Online Classifieds

Thousands of parents also turn to online classified sites such as Craigslist (www.craigslist.org) and eBay Classifieds (www.ebayclassifieds.com) to search for daycares. Classified sites function similarly to a newspaper classifieds section. It allows people to post ads about their services or products that they want to sell. From time to time, you should post ads about your daycare services in online classified sites.

The choice of daycare is a complex decision, but can be primarily attributed to the following factors in order of importance:

1. Atmosphere. Parents would like to see and feel a happy and nurturing environment - that is, happy children, caring and happy staff, friendly environment, and a clean place. A parent who positively connects with the teachers at an emotional level will greatly help as this will provide him/her with a sense of assurance that his/her child will be taken good care of. Wall decorations, children’s artwork posted on the walls, toys, books, room colors, and etc. are all factors that can contribute to a positive atmosphere. On the other hand, old toys and books, tired wall (e.g. walls that need a fresh coat of paint), and the lack of room color and decorations will produce a negative atmosphere.
2. Location and convenience. Daycare centers found in a locality most often serve the immediate neighborhood. Parents will select a daycare that is relatively near their residence and/or their place of work. Even parking or ingress / egress access can be a decision factor for most parents. The fact that a parent needs to drop-off and pick-up their child requires good ingress / egress access for the parent’s convenience.
3. Value driven. Depending on the demography, financial constraints play a considerable role in the decision-making process of the parent. A daycare that offers quality at a value-price could be the clinching factor in parents’ decision to enroll their child there.
4. Programming. Weekly lesson plans, parent involvement activities, programming, and the availability of different kinds of learning materials are critical in establishing a good learning environment for the child. In general, children learn everyday. However, for academically inclined parents, programming can become an important factor in their decision-making process. A daycare center that includes enrichment programs such as heritage activities, language lessons (e.g. English, French) or math programs can be a decision factor for some parents.
5. Facilities. The equipment available, cleanliness and general appearance of your facilities will differentiate your daycare center from other daycare centers. Examples include playground, play structure, gymnasium, security, air conditioning and etc. In extreme weather conditions such as a very hot summer day, or very cold winter day, a gymnasium is an asset, which allows children to stay indoor and receive their daily dose of gross motor skill activities (e.g. running and jumping).

Customer cost of switching daycare is high. The child’s attachment to the teacher and the other children at the center deters parents from switching daycare centers without putting deep thought into it. As a result, a customer of a one daycare will not normally switch to another daycare center.

For more daycare marketing tips and strategies, you can visit the marketing section of Parent Relief’s How to Start and Manage a Daycare online tutorial.

In addition, a marketing plan allows you to fully understand your local market in terms of needs (e.g. infant care versus preschool) and advertising taste (e.g. flyers versus word-of-mouth). By better understanding your target customer, it ensures that you are able to use marketing messages and advertising channels that meets your customers’ psychological needs. This eliminates waste, increases the chance of advertising success and allows you to spend advertising dollars effectively.

Finally, The process of writing a marketing plan is an important exercise. Critical factors that contributes to the success of your daycare business are often uncovered during the write-up of your marketing plan. In other words, the thinking process involved in the development of a marketing plan will help you identify factors and strategies that are important to your daycare business.

In summary, a marketing plan allows you to gain an in-depth knowledge of your local market or community your daycare serves. This in-depth knowledge creates a competitive advantage by allowing you: (1) to create childcare services that better meet the needs of the community and (2) to communicate the advantages of your services to your customers using appropriate advertising channels and messages they will find appealing.

To learn more about writing a marketing plan, you may want to use the Internet as a resource. In general, however, your marketing plan at the very least should include:

• Analysis of your competitors. This allows you to identify your competitive advantages over your competitors, allowing you to highlight the value of your services to parents.
• Customer’s buying behavior. This allows you to identify the decision factors used by parents when choosing a daycare. By understanding this, you will be able to develop advertising messages that is appealing to parents.
• Advertising channels. Document advertising channels (e.g. flyers) that you can use in your local market.

For more daycare marketing tips and strategies, you can visit the marketing section of Parent Relief’s How to Start and Manage a Daycare online tutorial.

Having more information about yourself or your services will assist parents in making an informed decision. Whether it is to showcase your childcare experience through the Resume widget, or highlight the value and yet affordable service you are providing though the Fee widget, parents will appreciate the completeness of the information they are getting. So help parents choose you by taking advantage of our new Resume and Fee widgets now. It’s free!

What is a Resume widget?

A Resume widget allows you to add a resume to your profile page. This gives you the opportunity to highlight and showcase important qualifications and work experience to parents. As shown below, the resume is clearly displayed in the profile page.

Information you can highlight includes:

• Years of experience in childcare
• Experience in caring for special needs children
• Maximum number of children cared for at one time
• First Aid and CPR training
• Languages
• and more…

What is a Fee widget?

A Fee widget gives you the ability to add your program fees or any type of fee (e.g. per hour, per day, per session) to your profile page. This allows you to publish your service fees to parents, making it easier for parents to make a decision. As shown below, the fees are clearly displayed in the profile page.

For examples of the different ways you can present your fees to parents, please refer or click on the following question:

• What are the different ways I can present my fees to parents?

In summary, the Resume widget is a tool that allows you to present your qualifications and the kind of quality service parents may expect from you, while the Fee widget is a tool that you can use to show parents that your services are affordable. Combined together, they can become a powerful marketing tool, allowing you to position yourself as a provider that provides quality and affordable children’s services to the community.

What are Widgets?

Widgets are small, specialized applications or gadgets that you, as a childcare provider, can use to add more information and enhance your directory listing and profile page. You are generally given the choice to select from a number of widgets. Each widget adds a specific functionality that attracts more parents to view your business listing and profile page.

A good example is the photo widget. As shown below, adding the Photo widget provides you the facility to add photos or pictures of your center. This allows you to showcase or highlight specific features of your service to parents. Basically, these type of content (added through the use of widgets) are key to attracting and inviting parents to inquire about your services.

Parents (or your potential customers) are given the ability to view enlarged versions of the pictures by clicking on the images as shown below:

Want to learn more? Click the following questions:

• How do widgets enhance my profile page and directory listing?
• What widgets are currently available?
• How do I add a widget?