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Marissa Schneggenburger

7 Ways to Increase Revenue at Your Childcare Center

  • March 4, 2024

Increasing revenue can be a challenge for any business, especially those in early childhood education. Childcare centers are struggling to retain staff while maintaining enrollment and increasing revenue. With help from ECE experts, we’ve compiled a list of considerations and ideas to take into account when looking to improve your childcare center. This could range from reassessing current business practices to offering new programs or expanding marketing efforts. By implementing these ideas, you can improve your center and increase revenue. 

In a past webinar, Kathy Ligon, CEO and Founder of HINGE Early Education Brokers, joined us to discuss creating opportunities for your childcare center. To begin, she offered a recommended breakdown of your center’s finances in a healthy and normal environment:

  • Ideal Occupancy: 70-90% 
  • Staff costs: 50-55% of your income
  • Operating costs: 11-13% of your income
  • Facility costs: 22-25% of your income
  • Admin costs: 2-4% of your income
  • Profit: 15-30% of your income

Use this breakdown as a reference when implementing changes to your childcare center. With this outline in mind, let’s get started on how to improve your school and increase revenue. 

1. Assess and Redefine Your Budget

Creating or redefining your budget can help alleviate financial stress by having a clear overview of your childcare center’s cash flow. There are a variety of tools available to help you outline your income and expenses. This will allow you to make informed decisions on where to allocate your spending. This Kanagrootime blog post outlines important considerations when building a budget along with helpful tools and resources. Reassessing and redefining your budget will not only help you see where you can save money but also where you can reinvest it in other projects to grow your center. 

2. Take Advantage of Grants and Subsidies

There are grants and funds available to help ease the financial burden on childcare centers and families. Check your local licensing agency and government sites for additional resources on grants that may be available. Additionally, there are subsidy programs your center can get involved in to alleviate certain costs such as the USDA Food program and the Head Start program. 

For additional resources on the grants and subsidies mentioned, see the links below. 

Think Small: Grants and Financial Opportunities

USA Grant Applications: Grants and Financial Opportunities

Child Care & Development Block Grant

USDA Food Program

Head Start – Early Childhood Learning & Knowledge Center

3. Increase Tuition Rates

Increasing tuition rates can be a sensitive and difficult topic to approach. Although parents will expect a tuition increase year over year, they won’t always know what amount to expect and need to be conscious of what they’re being charged. However, Kathy Ligon advises, “Now is the time to be very very bold in your tuition rates. It is not the time to act in fear. It is the time to set your tuition rates where they need to be.” Sometimes centers offer higher quality services than they’re charging for, so make sure you know your worth and charge what’s fair. When approaching this subject, you can be as transparent as possible and let parents know why you need to charge more and how you’re trying to offset costs. For example, to lessen the tuition increase you can explain to parents that certain discounts will be reduced or no longer available. You could also ask parents to provide their children with their own food to reduce costs for your center. Being honest will give parents more confidence in your center and more incentive to be receptive to these changes since they do want to continue being a part of your center.

 4. Offer New Programs

A good way to increase revenue is to increase your program offerings. Most commonly, centers are expanding to offer a Kindergarten, afterschool, or summer camp programs. Flexible and drop-in care are additional ways to maximize capacity, boost revenue, and offer additional convenience to parents. This makes your center appeal to a wider range of families as you offer additional support and services. 

5. Invest in a CCMS

Implementing a Childcare Management Software will help save your center time and money. This software will be able to automate and simplify processes that take you or your staff hours every week including billing, payroll, scheduling, daily notes, etc. With a CCMS, you’ll spend less on administrative costs like paper supplies and won’t need to schedule staff to cover time-consuming tasks like billing and invoicing. Many software programs also come with parent connectivity, increasing the quality of your center and appealing to more families. For an overview of how Kangarootime can help improve your childcare center, watch a 10-minute software demo here.

6. Improve Your Marketing Techniques 

Marketing has changed over the years and has become increasingly affordable and accessible. Social media is a popular and free way to promote upcoming events, promotions, daily activities, and news about your center. When it comes to Facebook alone, surveys show that 83% of consumers use the platform and 66% of those consumers follow a brand. (Sprout Social) There is huge value in improving your social media presence as it allows you to reach a wide range of people and showcase your center. Other marketing techniques could include paid social media advertising, Google Ads, email marketing, or direct mail. By taking advantage of these marketing opportunities, you can get your center recognized by more families leading to higher enrollment and more revenue for your business. For additional marketing tips, download our Complete Guide to Marketing Your Childcare Center.

7. Partner with Local Organizations

Childcare centers can also partner with local businesses or ECE coaches to provide workshops or educational sessions for parents on topics like child development, parenting strategies, or work-life balance. By diversifying their services and catering to the evolving needs of families, you can maximize your revenue potential while providing comprehensive support to both children and parents.

By implementing some or all of these changes, you’re setting your center up for success. Although these times are challenging, there are ways to use the circumstances to your advantage and prepare your center for a better future. 

Kangarootime brings childcare together with all of the tools centers need to succeed. One, easy-to-use system helps ECE professionals run their business more efficiently while optimizing their classrooms, connecting with families, and empowering staff. Our passionate team of industry experts has a heart for learning and is committed to being a partner to the childcare community. We’ve been serving providers since 2015 and together, we’re advancing childcare forward. To learn more, visit kangarootime.com.

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