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Daycare businesses can be profitable, but it's important to understand the strategies and tips you need to know to increase your daycare business' revenue.

Before we get started , If you're new here, My name is Dena, and I have been a center director for 21 years and love what I do, but it is WORK! My goal is to help other providers with their child care programs and help relieve the stress that the daycare world brings.

Don't forget to snag my FREE Interview Guide to hire the right staff for your daycare or child care center! Reduce turnover with my 12-page Interview Guide with Questions and Job Position Descriptions designed for child care hiring!

Here are 10 valuable ways daycare owners and directors can use to bring more income:

1. Raise tuition rates.

Regularly increasing the tuition rates is a great way to stay ahead of inflation and keep daycare businesses profitable. ECE programs should increase rates every year or every other year by 2-5%. 

Your initial tuition increase may be substantially more than a 2%-5% increase to combat the staffing crisis, especially if you have not raised your rates in several years. I always hear, "I can't afford to raise rates. My parents won't pay more." Then I hear, "We are comparable to the area, so we can't charge more." Yes, you can, and you should!

Here's the truth, most people spend $10 or more a week on Starbucks and convenience store snacks. You can charge more if you have a clean, inviting facility, loving professional staff, provide quality care, and offer something unique that sets your center apart. As a result, your families will adjust and pay what needs to be paid. If you are missing one of these essential aspects, make corrections to charge more. Click here to download my FREE tuition increase letter to give to parents.

If you want to learn more about increasing your tuition rates, click here to read my article Why Raising Tuition Rates is Essential for Your Daycare.

2. Charge Annual Registration.

Most programs charge a starting child registration, but not all charge an annual registration. Put into your child care policies or parent handbook that registration is paid annually at the beginning of every year (or whatever month you decide) to continue child enrollment.

3. Create additional programs and services.

Offer special day camps or summer camps, tutoring, after-school programs, enrichment activities, music, art classes, and other fun experiences for which parents pay an extra fee. These activities help daycares generate more revenue while keeping daycare members engaged and entertained. 

4. Charge for late pick-ups.

Daycare centers should also charge a fee for parents who arrive after the daycare is closed. Make your late pick-up fee hefty, and consider having a policy that states you will terminate care after three late pick-ups within 30 days.

An example late fee policy may look like this: “Our late pick-up charge is $15 for the first 5 minutes and $2 per minute thereafter. If we have not been in contact with a parent or guardian and the child has not been picked up within 1 hour, we are obligated to inform the Division of Family and Children Services and the appropriate local authorities. Any family with more than three late pick-ups within 30 days will be subject to termination.”

5. Enforce your late payment policy.

From time to time, parents will come to you with a reason or excuse that they cannot pay on time. As much as you want to be the "nice guy," always stick to your policy. 

You leave money on the table when you make exceptions or waive the fees. It also signals to the parent that it is ok to pay late. They may think they can sweet talk you anytime they run behind, and you will allow it.   

My late payment policy is as follows: "Payment is due on Monday of each week. If tuition is not paid by Tuesday at closing time, a $10.00 late fee will be charged to your account on Wednesday, $5.00 on Thursday, and $5.00 on Friday. Children with a past-due balance will not be allowed to attend the following Monday unless the past-due balance is paid in full. No account will be held for more than one week. We do not carry balances. Payments may be paid bi-weekly or monthly if tuition is paid in advance. If, for any reason, you decide to withdraw your child from Noah's Ark Daycare, a two-week notice is required."

6. Have fundraisers.

Fundraisers can be a great way to bring in extra income. Have daycare members sell items or ask local businesses for donations that can be used as prizes or auctioned off at an event.

 7. Charge full-time rates.

Eliminate absent credits and part-time care and charge for each child's spot. Require all families to pay the full weekly tuition rate regardless of the child's attendance. Outline in your policies or parent handbook that parents are paying for the "spot" and will be required to pay weekly regardless of attendance. Consider giving every family 1 to 2 free vacation weeks after 1 year of enrollment.

 8. Charge extra fees

Consider charging additional fees for specific programs and activities. Have them outlined in your policies so that parents will expect them. Here are some added fees to consider.

• Waitlist Fee to be added to the waitlist.

• Supply List Fee at the beginning of the school year for extra supplies.

• Book Fee due at enrollment to cover curriculum expenses.

• Summer Activity Fee to cover craft expenses or in-house visitors such as a clown, magic show, etc.

• Field Trip Fees to cover field trip admissions, gas, and any other expenses.

9. See if you qualify for any grants or state funding.

Many daycare centers qualify for grants and/or state funding, such as the food program or quality-rated program, which can help cover costs, employee wages, food, and other daycare-related expenses. It is important to research local daycare regulations and see if your daycare qualifies for financial assistance.

You can ask your local Child Care Resource and Referral agency (CCR&R) or check sites like GrantWatch to see if grants are offered in your area that meet your needs.  

If you want more info on finding and obtaining grants, click here to read my article, Unlocking Grant Opportunities for Your Daycare or Childcare Center.

10. Decrease expenses.

It is important to keep track of daycare expenses and be aware of what you are spending money on. Then, look for ways to reduce daycare-related costs, such as cutting back on snacks, using local resources like the library or park, and shopping around for daycare supplies. 

Skip the fancy cleaners and clean with bleach and water. A spray bottle of bleach and water solution is a powerful cleaner that can disinfect and sanitize all surfaces. It does the job and is so much cheaper than using expensive cleaners.

The American Academy of Pediatrics recommends using a sanitizing solution of ¼ cup of household liquid chlorine bleach in one gallon of water or one tablespoon in one quart of water.

Conclusion:  

By implementing these strategies, your daycare business will be on the path to becoming more profitable. 

 Remember that daycare is a business; be organized, focus on customer service, provide quality care, enforce policies consistently, and maximize income at every opportunity.

 If you have any questions about increasing revenue in your daycare business or would like assistance setting up daycare policies and procedures, please do not hesitate to contact me. I am always here to help you succeed!

Here are some other articles packed with valuable content you are sure to enjoy:

30 Daycare Policies You Need in Your Parent Handbook

Important Daycare Forms You Need For Your Childcare Business

How To Deal With Parents Who Consistently Pay Tuition Late!

The 12 Most Common Child Care Business Mistakes

One Surefire Way to Boost ECE Staff Retention

How To Avoid Burnout in Childcare