how to open a child care...

Welcome

How to Start a Child Care Business

Is this the business for you?

Presented by:

Child Care Resource & Referral (R&R)Community Connection for Child Care

Local Investment in Child Care (LINCC)Kern County Child Care Council

Small Business Development Center (SBDC)Weill Institute of Bakersfield College

This workshop will cover: Early Care and Education Types of child care Misconceptions and Realities of child care Licensing Information Financing and Starting a child care business Operating a successful child care business Programs that can assist you

You will learn how to:Get a child care center licensed

Have a profitable child care business

Early Care and Education

A successful child care facility operator is an early Childhood Educator with great business skills. This uniquecombination of skills and expertiseis the cornerstone of a successfulhigh quality program.

Kern County doesn’t just need more child care, it needs more HIGH QUALITY child care.

High Quality Programs…..

Use research-based, developmental practice Comply with Licensing regulations Are often accredited by NAEYC Have well educated teaching staff Recognize parents as essential

partners in a child's education

Quality is one of the best marketing tools you have!

Supply and Demand

Kern County does not have enough licensed child care spaces to serve all working families.

This gap in services means many families “make do” with informal caregivers.

By 2015 LINCC hopes to close the gap by adding: 80 new child care centers 1000 new family child care homes

Market Research

Do your homework and find out about the current supply in the area you are considering for your business location

Determine who your competition is and what they charge.

Identify what services they provide Find out about the families in the area who are most

likely use child care services, what are their ages and income levels.

Child care is big business

$141 million in gross receipt in 2001 17,000 direct and indirect jobs $30 per day per child average tuition One job for every 10 children 30,000 children in child care 20,000 new spaces needed

Common Misconceptions

1. Child care is so expensive the child care center must be making a lot of money.

Reality: Child care is labor intensive and expensive to operate, profits are moderate depending on the size of the center.

2. There are free grants out there waiting to help me build and operate a child care center.

Reality: There is no free money or grants sitting around. Most centers are financed by loans and personal savings.

Misconceptions

3. These seem like such small businesses they must be easy to operate.

Reality: Whether a center is small or large it takes the same amount of skill and hard work as any other business to be successful.

4. If I open my own child care business nobody can tell me how to run it.

Reality: A child care center is licensed by the State of California, and the state will regulate almost every aspect of your business.

Misconceptions

5. I can open my child care business anytime of year.

Reality: Peak enrollment for child care is in August so it is best to have a business open by August 1st, for full enrollment.

6. I can buy a little house for my child care center.

Reality: Residential areas often require conditional use permits to operate a center.

There are many types of Child Care

Child Care in California

Exempt Child Care Providers &Programs

Community Care Licensing

State of California

Licensed Child Care Centers

Licensed Family

Child Care Homes

Some definitions

Exempt Child Care Often a friend or family

member cares for only one family’s children

Many children with multiple disabilities use exempt care

Centers run by elementary schools may be exempt

Preschools that operate less than 12 hours a week are exempt from licensing.

Some definitions

Child Care Centers

Capacity dependent on square footage both inside the building and outdoor play space.

Governed by more detailed regulations, including staff qualifications, adult to child ratios, toilets and sinks, fencing, food preparation, operating capital and financial history.

Must be located in properly zoned area

Some definitions

Family Child Care Homes Licensed to care for children from multiple families. The child care provider must LIVE in the home where

they work. Small Capacity Home 6-8 Children Large Capacity Home 12-14 children with a helper All adults in the home must

obtain a fingerprint clearance

Licensing a Family Child Care Home

Generally it costs $600-$1500 to open for business as a family child care provider.

Potential Revenue…..8 children@ $500 mo. = $48,000 year14 children = $84,000 year

Licensing a Family Child Care Home

Any size home or apartment is acceptable

Pools and spas must be fenced or covered

You must have smoke detectors, fire extinguisher, and first aid kit

Your home will be inspected by licensing to ensure it is safe.

Licensing Requirements for Child Care Centers and Homes

All staff must be fingerprint cleared with the CA Department of Justice and the FBI and have a Child Abuse Index clearance

All staff must have a TB test and a health report

At least one person on site must have 15 hours of health and safety training approved by EMSA. The includes a current CPR and First Aid certificate

Things to know about licensing a center…

There are three types of Licenses for Child Care Centers:

Infant Toddler 0-24 months Preschool 2 -5 years School-Age 6-12 years

An initial application can be for one age category or all three.

Center Licensing Requirements- the basics

35 square feet of indoor activity space per child

75 sq. feet of outdoor activity space per child Fence at least 4 feet high surrounding the

outdoor play space One toilet and one hand-washing sink for

every 15 children Separate adult/staff restroom Specific education and experience

requirements for staff

More Center Licensing Info Adult to child ratios

Infant Care:1 teacher to ever 4 children

Preschool:1 teacher for every 12 children

Maximize adult-child ratios for

maximum efficiency!

Zoning

Centers must be located in appropriately zoned areas. Confirm the zoning for the property you have in mind.

Family child care homes typically do not require conditional use permits to operate in residential neighborhoods.

1st Phase of Development

Pre-Planning“Can I have a child care business?”

Green lights: Education & prior experience in child care industry. Cash on hand.

Red lights: Criminal record, bad credit, no cash.

Planning Phase

“ Is this child care business doable?”

Green Lights: Good market demand Affordable site properly zonedBusiness knowledge

Red Lights: Can’t make a profit, Not properly zoned

Predevelopment Phase

“Lining up the money and the Team”

Green Lights: Loan is approved for a sufficient amount. Director or Operator have been identified.

Red Lights: Unable to get money to start up.

Development Phase

Tenant improvements:“Moving walls & adding toilets”

Green Lights: Everything’s on schedule.

Red Lights: Construction delays causing you to miss an August opening.

Start Up Phase

Hire and train staff Advertise Enroll students Free publicity

Marketing for enrollment and positive cash flow!

Marketing – Wishing won’t fill your spaces!

Start long before you open. Make your open house a media event. You must be visible in the community. Marketing never stops, even when you are full!

This is an essential step that can make or break your

business!

The Importance of a Business Plan

It is a road map for your path to success

Easier to get approval to operate with a specific, detailed plan!

Financing from any source is easier to get with a Business Plan that outlines your steps to success!

OUTLINE OF A BUSINESS PLAN

1. Executive Summary2. Description of the business3. The Market4. Competition

& Feasibility

BUSINESS PLAN OUTLINE (CONT)

5. Location

6. Management

7. Personnel

BUSINESS PLAN OUTLINE (CONT)

8. Financial Data Sources and Uses of Funds Equipment list Projected financial

statements Monthly Cash Flow Projection Personal financial statement Past 3 years of tax returns

BUSINESS PLAN OUTLINE (CONT)

9. Other documents Résumé's Job descriptions Letters of reference Contracts Leases Certifications, licenses

Financing Money is available in

the form of loans Must have some cash

to contribute towards the project

A detailed Business Plan complete with financial projections and a budget are essential.

Help is available from the Small

Business Development

Center!

The 5 C’s of Lending

Credit CollateralCharacterCapacityCash Flow

Child Care MathRevenues: $6,000 per child per yearWages:typically 70% of expensesProfits: 5% or more

These are averages and your market research and Business Plan will determine these for

your individual business

Operating a Successful Business

Now the easy part is over and the work begins!

Follow your Business Plan!!!! Get help from assistance providers at no cost

to you (R&R, LINCC, & SBDC)

Anticipate problems and get help before they occur!

Child Care is a business and you….

…..have to carefully track weekly and monthly

Total Revenue Price per child Number of children Expenses Profits-key to success!!!

Are you Ready?

Do you know what it takes to get a license to operate a child care business?

LINCC and R&R at Community Connection for Child Care can help you through the licensing process.

Do you have the business skills to have a successful child care business?

SBDC can provide evaluation, information, business plan and loan application assistance.