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Owners of daycare centers, home daycare providers, and preschools are feeling the effects of our waning economy.  As well, parents are responding to our economic crisis by reducing household expenses and sometimes daycare is one of the first expenses they cut.

Statics show that daycare costs average between $3,380 and $10,787 a year for just one preschooler, according to the National Association of Child Care Resource & Referral Agencies.

OwnADaycare asked childcare center owners and daycare business owners for solutions that may help parents reduce daycare costs.  Responses varied:

“The only way to reduce day care costs is to cut back on a child’s schedule or seek out a less expensive program.  If a relative is available to help out, parents can reduce the number of days their child attends.  With regard to seeking out a less expensive program, parents need to be very careful that the program is run well.  As a rule of thumb, programs run by owners are more competitively priced than corporate-owned centers or franchises due to lower overhead, “explains Jann Rudd, owner of Lily Pond Country Day School in Rivervale, New Jersey.

“Parents too are looking at ways to cut child care costs.  They may exercise a flexible work schedule to lessen the number of hours/days needed for child care.  Also, parents look more carefully at programs now and want to get the best value for their child care dollars.  They look carefully at whether there are fees for enrichment programs that are charged in addition to tuition.  Ask if your School offers referral fees for referring new families.  Parents should look for a safe and secure environment with a high-quality faculty, an established curriculum and enrichment programs, all included in the tuition, “ says Joseph Schumacher, CEO of Goddard Systems, Inc.

“Part time schedules can offer access to childcare at reduced cost.  These might include Monday/Wednesday/Friday schedule, a Tuesday/ Thursday schedule, or half day schedule.  This allows parents to reduce costs, but still receive the benefits of a high quality preschool for their children,” says Julie Moye, co-owner of Kids ‘R’ Kids preschools in Cary, Morrisville and Research Triangle Park, N.C.

Another way for parents to reduce preschool costs is to enroll their child in a cooperative preschool, otherwise known as a “co-op” preschool. The cooperative preschool program is a non-profit organization that relies upon parent participation. While a qualified teacher, director, and staff are often employed, parents are relied upon to run the school and assist in the classroom on a rotational basis. The non-profit business of the preschool is also conducted by parents. This is a less expensive, yet high-quality, option.

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Many want to make a day care center and make it as a successful business. And these dreamers engage in this line of business full time and thus are self employed for it. One of the reasons for this is to be able to earn more while one is staying at home. Other reasons include the drudgery of a nine to five job for another as a boss. So until and unless one performs actions in pursuing their dream, having as day care business will remain just that, a dream. But this need not always is just a dream for here are some steps to undertake in order for one to find the finances to realize that dream.

1) Business planning. Like in every business, a day care must be borne forth of a business plan. How one seeks to achieve business objectives is a key ingredient in making this business plan. Even though the business is operated from home, having a business plan is crucial in making this business work. The business plan is in a nutshell the product of diligent research and well thought out planning which would assist financial institutions in making a decision whether or not one would provided a loan for the business. It must include the general objective of the center, how it will operate efficiently and effectively, especially as it is home-based, and a financial projection of revenues for one’s business.

2) Business structuring. This details all the financial matters involved in the business. Costing the preparation, operation and eventual continuous increase in business is essential to make known to financial institutions how much money is needed for the business to make money. Also included are the operational expenses, supplies and educational expenses needed for the day care.

3) Also, owner’s equity needs to be provided since lending institutions would want some participation on one’s end in the financial aspect of the business and not merely operations. Thus one’s financial interest in the business must be provided to entice lenders to commit money for one’s endeavor. Thus investing in one’s own business would provide signals to the lender that the commitment to succeed is clearly evident.

4) Collateralize. In order for one to make a clear commitment to the success of the business, one needs to put up some form of collateral for the lender to be able to be confident that return of the money lent would be made. It would also provide two things, confidence in the success of the business and avenue for a lender to recoup the loan made. So by putting up as a collateral one’s home or vehicle, one is able provide an option for the lender to recover the loan costs if ever the business fails.

As one can see, reaching out to make the dream a reality is not an easy task to do. One has to make a business plan, structure the business, inclusion of personal equity in the loan or offering collateral are some ways to which a loan may be obtained to finance the dream.

See: How to start a daycare

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