255: Your Childcare Center is More Than Just a 'Daycare'

In this episode, Carrie and Kate delve into the often-overlooked financial and social significance of childcare centers. They encourage providers to recognize their worth, highlighting that many centers can generate around $1 million in revenue. 💰 Carrie and Kate emphasize the importance of rephrasing the language used to describe their roles, shifting away from "just a director" to acknowledging their substantial community impact. 

They also discuss the broader economic contributions of childcare centers and the importance of networking and community engagement. By celebrating their achievements and advocating for their value, providers can elevate their profession and ensure their voices are heard. 

Check out Episodes 41 and 47 to learn more about sharing your story

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Transcript

Marie 00:00:01  Welcome to child care conversations with Kate and Carrie.

Carrie 00:00:06  Hi, guys. Okay, so today Kate and I are on a little bit of a soapbox because we want to help you to think about yourself in a different way, to think about your business in a different way. We've been to lots of conferences. You know, you probably know that. And there's been some talk about changing the language we use around our industry. And this happens cyclically. You know, I've been in the industry long enough that we've had like four different titles for what the head of a school does and what the people who are providing the care, you know, what title they have. So this this is just a thing and I've seen it before, but I'm really, really kind of wound up about it this time. And so and so is Kate in a slightly different way. And so we wanted to get you to think about yourself in a more empowering way. Okay. So, Kate, what was the number that got you just spinning and is why we're here today?

Kate 00:01:15  So if you think about yourself not just as an early learning leader, but as a manager or an owner of a business, then there's a whole other level of vocabulary we get to include for the average child care center.

Kate 00:01:36  And I realize that not every child care center in every city is going to be able to use this guideline of numbers. But where we are right now, an average child care center in a major metro in the state of Texas with roughly 50 to 60 children, is $1 million business.

Carrie 00:02:01  Wait wait wait. How do they tell if they fit or not? So how do you know if you fit a map? I did.

Kate 00:02:08  It's really simple. How much revenue did you take in this year?

Carrie 00:02:12  You think that's simple? I don't think everybody thinks that simple because they aren't tracking it that way. They're like, here's my is my tuition and my subsidy payment and my food program. You know, is that enough to pay my bills? So they're not looking at the whole year's worth of math. So. Okay. Yeah. So.

Kate 00:02:33  Absolutely. So and I would suspect that if you are like I was when I was operating childcare centers, I probably would have been a little like wigged out if I did a budget that was just that.

Kate 00:02:45  Right. It was $1 million budget because I don't think of myself in that fashion. Right, I just didn't.

Carrie 00:02:54  Yeah, but and we do budgets but we do the month by month because we know when the enrollment cycles happen, etc.. So I did a little math so that if the person listening doesn't know how to do the math, we can help them through it.

Kate 00:03:09  So you're going to tell them the math on how to run. Now, we're not saying you're a millionaire, so I want to make sure that I check that phrase because there are folks who go, oh, you know, so you're a millionaire. No. You run a business with $1 million in revenue. And I'm just real quick, I want to just say that is a lot of money for a small business to run through a community. Your community impact is huge. There are, you know, carpet cleaners. There are pest control folks. There are other.

Carrie 00:03:44  Get to that story. We'll get to that story. Just hang on to that.

Carrie 00:03:47  Okay, so say you're in an area that has lower monthly average tuition. So say you're at a place where the average tuition across your different age ranges is $600. So if it's $600 a month per kid on average, it takes you about 150 children enrolled to get you to that million dollar mark. Because what you do is you take $1 million and divide it by 12. And that tells you what the monthly or if you do weekly, okay. And you're open 52 weeks, you take that million dollars and divide it by 52. If you close for a week at Christmas and a week at spring break. Divide by 50. Okay. But if you take the million dollars and divide it by the appropriate number, 12, 50 or 52, that'll tell you the amount you would need to be bringing in per week or per month. And then divide that by your average tuition. So, the last time we can find a countrywide assessment of this is what the average child care is in all the places was actually from 2023.

Carrie 00:04:58  So it's a little bit old. And at that point the lowest tuition was in Mississippi, and it put the average at $568, which I was like, wow. and that meant 147 kids equaled $1 million business in Washington, D.C., which at the time was the most expensive. It was an average of almost $2,000 1912, which meant only 43 kids enrolled in your program. You've got $1 million business. So that gives you kind of some extremes of the, you know, tuition rates. And so you're somewhere in between. So somewhere between 43 and 147 kids. You are $1 million business. And one of the things is that Kate and I have been active in chambers of commerce and stuff. And so, Kate, you want to talk about what kind of celebrations you witnessed in Chamber of Commerce when somebody became $1 million business.

Kate 00:06:02  So not all chambers of commerce have these celebrations, but some do. And so go get involved. First of all, get involved in your chamber of commerce. They the ability to network so that you know, when you have that busted HVAC or you need to do something to your van or something in your building, you have a local connection to another business that you can at least get a quote from, right? So anyway, I consider all day and do just an episode on Chamber of Commerce and why you need to be involved.

Kate 00:06:36  So back in the day, and I and I will admit that this was probably over 30 years ago, and I know that, I worked, with a SBDC office that was housed in a chamber.

Carrie 00:06:52  What is an SBDC?

Kate 00:06:53  It's a small business development center that was funded by the SBA, and we were housed at a chamber of commerce. And this is not normal. now, a lot of the small business development centers are housed within universities, but at the time, we were housed in a chamber of commerce of a, of a state capital. And we were fortunate enough to watch companies that are now 30 years later. Nationwide, companies hit their first million. And for a lot of businesses, this takes years for them to have their first million dollars in revenue year. And they get the, the, the accolades and they get the celebrations and they get called up on stage because it's a big deal to have a business that has a revenue of $1 million. And I want to take this a step further.

Kate 00:07:48  Can I do that? Yeah. Okay. So I want you to remember that not only is your business $1 million revenue, you now, even if you only and I say only in really small, small letters, you're $1 million business. You're serving 44 families. You probably have some staff. How many staff would they probably have carry at a center with 44 kids?

Carrie 00:08:15  44 kids. You've probably got 6 or 7. Okay. Yeah, yeah.

Kate 00:08:22  Okay. So you've got 6 or 7 employees plus yourself. So you've got eight folks. So you have eight folks now who have a job. If you've got 44 families, you have probably at least 44 additional people who now have a job in that community. Now, let's just say they're all only making minimum wage. All right. So you now have you are now supporting 55. Roughly, right. 55, folks.

Carrie 00:08:54  We do some math.

Kate 00:08:55  Yup. 55 folks who are making minimum wage.

Carrie 00:08:59  Okay, so that puts you at putting an, if they're all earning minimum wage, that puts you at another almost million dollars.

Kate 00:09:08  So now you are bringing another million dollars worth of revenue and spending power in your community. So I want you to think about the fact that not only are you supporting employees by having them, you're allowing other people. And I'm talking minimum right? Like one per family can now have a job at minimum wage because of your program. Right? So that's now you.

Carrie 00:09:34  Almost nobody's working at minimum wage.

Kate 00:09:36  Well, I know I'm just going what if. Right. I'm trying to take this. The worst case scenario. Chances are most of you are running $1 million business, having a 3 to $4 million impact in your community because you've got two parents that can now work okay. And you are probably not working at minimum wage.

Carrie 00:09:57  Right? And I mean, there are so many ways we can look at this, but part of what we're trying to get you to do is not go, oh, I just run a daycare. Oh, I, you know, I just, I just run a small center.

Kate 00:10:09  Or I'm a, I'm a director. I'm, I'm just a director of a child care center. You're a manager of a multi-million dollar business.

Carrie 00:10:15  Take the just out of it. Take the just out of it. If you are bringing in $1 million worth of revenue, we know what the average amount of your budget that is going out to your staff. And we know that that's at least a half $1 million if you're bringing in a million, and it's probably more like 600,000 or $700,000, that that means that's more money that's going into working in the community. And you are managing a a team of about ten people like, stop saying I'm just a this. How many tacos does a taco place have to sell to get to $1 million? How many plates of spaghetti at $12 a plate? Does the Italian place have to sell to get to $1 million? There's a lot of people in your community who you're like, oh, they've got a thriving business. They're running the Italian food store or the Italian food restaurant.

Carrie 00:11:16  How many plates of spaghetti do they have to sell to equate to your small program? The number of people are like, oh, I have a small program. It's just 78 kids. Dudes. My dudes, you are this person running the restaurant, is it? Bringing in the money is, you know, really successful, but you're not. Do the math. Now I'm going to do the math in you talk.

Kate 00:11:43  Okay. so a lot of things that we don't always think about when we are business owners. Okay. What is that?

Carrie 00:11:53  So they have to sell 83,000 plates of spaghetti.

Kate 00:11:59  That's a that's a lot of spaghetti.

Carrie 00:12:01  83,000 plates of spaghetti to equal what you're doing in your program. I don't think there a lot of restaurants are selling 83,000 plates in their restaurant.

Kate 00:12:13  And hopefully that helps you understand that that would be the same if that was pizza, because an average pizza's between 10 and 12 bucks. Hamburgers. When's the last time you were able to go get even? You know, like a happy okay, Happy Meals, probably under $12, but a regular hamburger meal if you got soda and a fries is going to run you between 11 and $12.

Kate 00:12:33  So when you start to think about your revenue, we are not talking profit, okay? We all know that people who don't know the industry, who are just doing the math, are making the assumption that that million dollars in revenue means that you are making a lot of money. But we all know that the industry as a whole is somewhere between, you know, 40 and 60% of that is just staffing. You know, forget that you have a building or pest control or you need supplies or food or like the list goes on. Right? So, you know, stop and pause, pat yourself on the back because you also have the opportunity if you want them. I mean, I'm I'm sure we have nobody listening who is kind of a gold star kind of person. I mean, sometimes we don't say it publicly that, yes, I want the awards and accolades. I want to be recognized for the type of leader that I am. If you're involved in your chamber and especially your first year, and from the day you open to the day, the end of the fiscal year or the your first year anniversary.

Kate 00:13:45  You're at full enrollment with over 44 kids. Chances are, you're going to be recognized in some of the fastest accelerating businesses who reached $1 million your first year.

Carrie 00:13:57  Okay, but here's the thing. You have to submit yourself for that award. They don't know. Nobody knows how much revenue you're generating. So you need to be part of the chamber. But you also need to find out what are the awards and submit yourself. Now here's the question, because we know that most of our listeners are women, and a lot of women would be like, oh, I could never submit myself to an award. That's not modest. That's not ladylike. I could never. How braggy does that make me? It doesn't make you braggy. What it makes you is $1 million business. And people in the community need to know. We're always complaining that nobody seems to know what we do. Do you know why? Nobody knows what we do because we don't tell anybody. You can't complain on the one hand that nobody knows what we do.

Carrie 00:14:56  And on the other hand, refuse to tell anybody anything. Oh.

Kate 00:15:00  Absolutely. So I've been in this industry a long time, and so is Carrie. And I can recall maybe two childcare centers that have gone after some of this recognition. Some have taken it even far enough with things like Fortune Inc. magazine and fortune 100 kind of events on a national scale. And they do it not necessarily for anything. I mean, they might have some personal I want the gold star, but they also do it for those naysayers, those people who say, oh, you can't make a living in this business. Oh, you can't do this. You can't do that. Oh, you're just a babysitter. Okay. So there's just as much care.

Carrie 00:15:42  That whole child care is a sunset industry, meaning that our industry is going away. The heck it is.

Kate 00:15:48  I mean, if it was, would we have professional athletes opening five, six, seven locations of child care centers and not the Papa Johns? I mean, come on, let's show the investment community why this is the industry that they need to invest in.

Kate 00:16:08  It's recession proof. It's not going anywhere. I don't you know, we're not going to be hit by tariffs. We're not going to be hit by, you know, anything like that. We have a voice and we need to take our million dollar business and pull up our britches and walk down to the city council offices and make sure that the workforce development boards are our community development corporations, our chambers of commerce, our city councils understand that our little program is responsible for, at the minimum, $2 million worth of revenue in that community. So you take. There's this community that Kerry and I have talked about before, and we try to be really big ish. that's outside of Austin, Kerry's brothers on city council. We have another city council member on there who used to own a child care center, and that community has something like 27 child care centers. And if they got together and walked into city council and said, we would just like y'all to know that we bring in $57 million into this community.

Kate 00:17:12  You're doing A, B, and C for this big company that starts with an A, and they ship stuff and yeah, they've brought some revenue and they've made some jobs. But our programs allow 157 people to go to work. And we have just in our 20 programs, 200 employees. So what are you going to do for us?

Carrie 00:17:35  I think that's a big thing to think about.

Kate 00:17:38  And also I need to calm down.

Carrie 00:17:41  I know I was going to say I don't think that our listener, I don't I don't think she knows how big of an industry child care is. Should we tell them, like the big, huge number or should we keep it a secret? What do you think?

Kate 00:17:56  I think we should scream it from the rooftops. So absolutely, we need to share it.

Carrie 00:18:00  Okay. Child care. Not counting registered or home based programs, whatever you call them in your state, registered license, whatever. Home based regulated programs, and not counting after school. So just center based programs that are licensed in the United States is 60.

Carrie 00:18:21  $60 billion in revenue going through those programs. So $60 billion for one portion of the child care industry. I can't find numbers that can get at also the home based programs and the schools, but between 60 and 75 billion is what the Department of Labor, I think was the Department of Labor. Anyway, the federal government numbers say for just licensed childcare.

Kate 00:18:50  That's a lot when you aren't sure if you have an impact in your community. if you aren't sure. Go do some research. And some of these states that are really, really struggling. I mean, I'm thinking Oklahoma and Mississippi or Missouri, Oklahoma and Missouri are really their their health and human services departments that regulate child care are really struggling. And right now the chambers of commerce aren't screaming. The business owners aren't screaming. Nobody is saying, give us back our child care subsidies, and this is the impact it's going to have, because unfortunately, we we love the children. Right. And, and and this is the one time where loving the children and wanting what's right for the children needs to almost be secondary, because we need to talk about what that's going to do to those parents and that community.

Kate 00:19:44  If you have a child care center that was taking care of 44 families, and all of a sudden that center has to close because it can't pay its bills, because the state has decided it wants to just randomly change their contract. And where they used to get, you know, $30 a day per child, they now get $15 a day per child. And so they've just had their budgets cut in half, their income revenue cut in half. These families can't afford to pay. So those 44 families are now. One person's going to stay at home with those children. Or those kids are going to go to unregulated care. They're going to go to the grandparents, or they may be home alone. You have to ask yourself, why is the workforce development corporations, the community development corporations not getting on their soapbox, getting on their step ladders and screaming at the top of their lungs why? This is an issue. It's not just $1 million in revenue at your program. It's two, three, $4 million in revenue through your community.

Kate 00:20:51  Who do you think buys that pizza, that popcorn that go into the movie theater? Your parents are the ones who keep all those other businesses you know, going. And if your parents aren't working, those other programs are going to know it.

Carrie 00:21:05  Oh, but Kate, movie theaters are such a much bigger industry. Not movie theaters are $4 a year in the United States. So if movie theaters are $40 billion and everybody's worried about the local movie theater closing down, why aren't they worried about the child care centers? Because we're not telling them the movie theaters are talking about how they're having to close branches and stuff, and we're not talking about it. And I know it's because AMC owns 80 bazillion movie theaters, and when they have to close for they put out a press release. But we need to be talking, and you need to be saying, I've got this million dollar business. If you have one or a half $1 million business, I mean, I know people who have home based programs that are half $1 million businesses.

Carrie 00:21:53  So don't you be saying only at me because I'm going to shake my finger at you, and we need to be going out there and saying it loud and proud and getting the recognition we deserve. And when there is an issue like the city changing the zoning and saying that you can only have child care centers on four lane roads in your town, which is not optimal for the kids or for the parents. You need to take yourself down to city council and say, hey, my million dollar business thinks that this is a bad idea and this change is going to impact other million dollar businesses coming into your town. And being able to allow another $6 million worth of workforce because they can't provide child care for the people who are wanting to work in your town.

Kate 00:22:48  So one of the reasons that Carrie and I are really poking to make you guys help think this through is that we know that a lot of times when you think about child care centers that get into advocacy or you hear us talk about advocacy, we are talking about joining one of the childcare industry advocacy organizations.

Kate 00:23:11  But even those organizations really do talk on a national scale, and they are talking the industry itself. We are talking to you today about why you need to be involved in your local chamber, your regional chambers, your specialty chambers. Okay. So specialty chambers are the women's chambers, the Asians chamber, the. The east side of your town chamber. Right. in Austin, we have something like 47 chambers, including the young chamber. We want you to join those chambers and have a voice and go do the math today. Share it in our show notes or, you know, send us an email, go to the fan mail. send us an email at Kate and carrie@childcare.com. Let us know what your numbers are. Go add up all your monthly revenue. I'm not talking about your profit. I'm talking about your revenue. Because that's what when chambers are talking about, oh, you know, you're an X kind of you know, you're $100,000 business. It's not the profit. It's about the revenue.

Kate 00:24:19  And every one of you who have 40 plus do the math, because you're probably dang well close. You know, I bet if you added a summer camp, you all would be over. Okay. So, you know, there's my summer camp rant. Okay. But.

Carrie 00:24:36  Or if you did weekend, if you did Saturday care one day a month. You know, there's lots of different ways we've talked about in other episodes about how to add a little bit more revenue.

Kate 00:24:46  Or a lot more revenue.

Carrie 00:24:47  Or a lot more revenue. But guys, not only do I want you to do it at the chamber, I'm, I'm going to ask them to go a little bit further, a little bit more uncomfortable. I need you to write a press release. And I need that to go out to your local paper. And if you are in a big metro like Austin and you know you're not going to show up in the big, Austin American-Statesman, then submit it to the local business paper. Or maybe there's neighborhood papers.

Carrie 00:25:17  So in Austin, there's probably 25 different papers that come out. And yeah, the statesman might not cover you, but impact might or, Adelante or, you know, one of the other papers. Very well. Might. Because you're saying I'm $1 million business and I impact this much money into the economy, and if I'm gone, so is all of that impact into the economy? Maybe we need to get an economist on here to help us figure out the total financial.

Kate 00:25:49  I want to mention it's been a long time since we've had Amy on. So if you don't realize that we've been around for, you know, 250 episodes, go on to Google whatever search platform you use, type in child care conversations and Amy King and Josh Baker. So there were two separate episodes, but Amy did a whole episode with us on how to get press and and what that looks like. And Josh helped talk through. If you were going to take photos in your program for press, what those photos should look like and and how to do that.

Kate 00:26:27  we love both of them, and we think that it would be a great opportunity for you to go back and listen to some of our old episodes, and Carrie's probably looking actually up what those episode numbers are, and so maybe we'll include them in the show notes. if Carrie finds them before we are done with this episode. So, advocacy is not just when your legislative session is happening. It's not just when the national legislation is happening. Chances are, every one of you should be paying attention to what's happening in your school district. Okay, so we're not just talking about planning and zoning, at your city level. We're not talking about just federal budgets, but we are talking about school district. What's happening at your school district? Is the school district talking about going to universal pre-K? Well, have you shown up at the meetings and talked to them as the professional in the industry about why 37 three year olds should not be in a classroom? I don't think it's that high. I think a little overexaggerated.

Kate 00:27:27  But they aren't subject to the same ratios that you are in your state licensed facility. Those staff don't have to have the same amount of continuing education that you do. They don't have the same quality support that you have. So get involved or at least be educated and know what's happening. Find some sort of. I don't care if it's a Facebook group that tells you what happened at the last, you know, school district school board meeting or what happened at the last city council meeting. I mean, we don't all have time to go to, you know, six, 7 or 8 meetings a month. But maybe you have parents who do. And do you already have parents who are teachers who are involved in school district administration? You know, we have a lot of programs that we work with that are housed at the school district. They're funded by the school district. And those parents and those staff aren't even aware of things like universal pre-K.

Carrie 00:28:29  Okay, I couldn't find Amy's episode, but I did find Joshua.

Carrie 00:28:32  So episode 47 is all about getting good photos at your program, and part of the purpose of it was for press releases, because your press releases are much more likely to get accepted if you have pictures of cute children. that's just the way it works. They know that people want to look at a sweet, smiling three year old face. And so if you put some of those in with your press release, they're more likely to go through. So I think we gave people a lot of homework today, and I hope we helped you change your mindset at least a little bit. You're not adjusting anything. Say it loud. Say it proud. I'm an early childhood educator. Or I am an educator running $1 million business.

Kate 00:29:17  I like that one. I mean, you you are a business leader. You're not just an early learning leader. I mean, I love early learning leaders, and I love that phrase. But I want you to remember that you are a business owner who's operating $1 million business, or that you are a manager of $1 million business, and that you impact your community with another two, three, four, $5 million worth of revenue because of the families in your program.

Carrie 00:29:50  Yeah, I think it's probably more than even that. But for the real numbers, we need to go get ourselves an economist.

Kate 00:29:59  Now we gotta find one that is doing those numbers. Okay, so who's got their PhD in that? If you know somebody who I actually.

Carrie 00:30:05  Know who I know who we'd want, but I don't know if they would come.

Kate 00:30:09  anyway.

Carrie 00:30:11  I hope you learned something from this show. I hope this impacted you, Kate. And I can get really passionate about this. I know that we probably have almost as many advocacy episodes as we have any other topic. But it's because it's important. You need to go out there and toot your own horn. You need to go out there and let it be known that you are awesome at your job. You are a superhero. I don't think you're a rock star. I think you're a superhero and that is a little bit more special. So if you learn something from the show, share the show with someone who needs to know.

Carrie 00:30:46  And we'll talk to you next week.

Kate 00:30:48  Hey, if you want to be a guest, go to Childcare conversations.com. We would love to have you. And if you know that economist or anybody else who you think has the same kind of passion, we do send them our way.

Marie 00:31:04  Thank you for listening to Child Care conversations with Kate and Kerry. Want to learn more? Check out our website at Texas Director. And if you've learned anything today. Leave us a comment below and share the show.