How Profitable Is Day Care Business In Canada

How Profitable Is Day Care Business In Canada – Jenna Antico, a 31-year-old daycare operator in Sarasota, Fla., believes 2020 will be a pivotal year for her business. The daycare she began building in 2015 was making steady profits, so she rented a second building in October 2019 and then bought a third in late February 2020. As it turned out, that year was indeed pivotal — but not in the way she’d hoped.

When COVID-19 hit the United States like a tsunami in March, closing schools and businesses and prompting businesses to work remotely, daycare centers like Antico were swept away. Parents withdrew their children from the centers and local authorities began issuing strict guidelines that providers had to follow before they were allowed to take children back.

How Profitable Is Day Care Business In Canada

To meet recommendations from both the state of Florida and the Centers for Disease Control and Prevention (CDC), Antico built four new walls – nearly $8,000 each – to reduce the number of children in a classroom; bought 16 portable sinks for $2,800 each; and hired five sanitation workers to deep clean their original center for three and a half hours each night. She also pays her administrative assistant to take care of all the new paperwork. But despite these investments, enrollments at its facilities, and therefore Antico’s revenues, have not recovered as hoped. At the beginning of 2020, their facility was barely sufficient for 106 children; by the end of August only 49 children were enrolled.

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Antico is in pain. She’s already used up the entire $91,000 Paycheck Protection Program loan she received through the Care Act and racked up another $70,000 in debt, and her two new facilities sit vacant. She has no more money for the staff or for their furniture. “I ran out of money to earn a salary,” says Antico, mother of three adopted children and one biological child. She and her husband, a child protection officer who makes $40,000 a year, have already missed two mortgage payments, pulled their children out of private school and are considering selling their house to make ends meet. Her child care business, in which she has invested $500,000 over the past five years, is on the verge of collapse.

Not that it’s any consolation, but Antico is far from alone: ​​86 percent of childcare facilities now serve fewer children than they did before the pandemic, while 70 percent are generating “significant” new operating costs, according to a July survey by the National Association for the Education of Young Children (NAEYC). The costs are unrelenting: Kindergarten leaders must hire more staff to handle smaller class sizes, more legal fees to handle the arduous process of obtaining federal loans and complying with government regulations, and more cleaning supplies and staff to prevent outbreaks in young children. Industry-wide, enrollment has fallen by two-thirds. Without significant government investment, 40 percent of the child care programs surveyed by NAEYC — and half of the programs owned by minorities — will soon be closed. Always.

Interviews with more than half a dozen daycare operators across the country show why so many daycare centers may never reopen: They said overhead costs were huge even before the pandemic hit, while profit margins were just enough to make ends meet. In this age of pandemic, things only got worse. Lauren Brown, director of the World of Wonders child care and learning center in Marysville, Ohio, says cleaning costs have skyrocketed 300 percent while the center made $20,000 less than usual in June and July. Annette Gladstone, the co-founder of Segray Eagle Rock Kindergarten in Los Angeles, says she’s struggling to pay the rent on her kindergarten building because enrollment is so low. Segray Eagle Rock typically houses 177 children; At the end of August there were two dozen children. Despite Southern California’s sweltering heat, Gladstone has kept the windows open while the air-conditioning is on because the CDC shows the practice can increase ventilation. Meredith Kasten, who directs the Early Childhood Center in Greensboro, North Carolina, says demand for her services has almost died down. “Our waiting list was a year long,” she says. “It’s empty now.”

The slow death of daycare centers across the country could have a domino effect across the economy, experts say. Entrepreneurs like Antico or Gladstone will find themselves in financial distress, but so will the roughly 1.1 million people, 96% of whom are women and 40% people of color, who typically earn very low wages, e.g. B. by taking care of other children. Mass closures will also impact communities and parents who rely on daycare to go to work and support their families. Without access to affordable and convenient childcare, working outside the home is becoming increasingly financially and logistically unsustainable for many parents, especially mothers. It’s a possibility that could cripple women’s progress in the workplace, exacerbate inequality and hamper America’s economic recovery.

Why Child Care In Massachusetts Costs So Much

This Catch-22 is unique in the child care industry. While public school boards have also had to contend with new safety protocols and increased costs as a result of the pandemic, they are government funded. Day gardens are not. Society has long held that children have a right to a basic education that non-parents must attend, but there is no similar consensus on sharing the cost of caring for younger children. Marci Whitebook, founding director of the Center for Child Care Employment Research at the University of California, Berkeley, says there is no good reason for this societal failure. But the bottom line is clear: “Because we’re asking the parents to foot the bill and it’s so expensive,” she says, “means the only way it’s really going to happen is if the people who doing it, essentially exploiting it.”

If mass lockdowns in the childcare industry occur on the scale experts are predicting, the government’s failure will have wider repercussions. Day care workers who become unemployed may never return to work. Daycare owners can go out of business for more lucrative ones. Families may choose to keep one parent at home to look after the children. “Without our collective investment in childcare, there really will be no effective community restoration,” warns Lynette Fraga, CEO of ChildcareAware. “If we don’t support childcare workers, there will be no childcare to go back to.”

Millions of American parents, already struggling to spend an average of about $10,000 per infant per year on childcare, may be wondering why their daycare is in such financial distress. But the industry as a whole was barely profitable even before the pandemic hit.

Unlike call centers, which have been able to reduce construction costs by downsizing or removing stores, or retail stores that are shedding staff, low-fat daycares went into the pandemic to cut them. Government regulations require that they maintain a high adult-to-child ratio, provide ample square footage for play and study spaces, and, at some locations, employ staff trained in early childhood development. These measures are important: Research shows that early childhood education influences everything from brain size in adults to reading skills. “This has an impact on our future workforce and their economic potential, which is ultimately linked to the economic potential of our country,” explains Katika Roy, gender economist.

Child Care Center

But daycare providers provide this important service for a few cents. According to the Bureau of Labor Statistics, the average daycare operator makes just $48,000 a year, while the standard daycare worker makes just $24,000. Typically, these jobs involve little or no pay and no employee-sponsored health care. According to a 2015 report by the Economic Policy Institute, only 15 percent of childcare workers receive employer-sponsored health insurance, compared to 50 percent of workers in other occupations. The lack of health care benefits is problematic under normal conditions, with children unknowingly bringing their gastrointestinal illness or conjunctivitis in their nursery. But during a pandemic, it’s potentially deadly. Daycare providers, making an average of just $11.65 an hour, may not be able to risk seeking treatment for any illness, let alone COVID-19.

Employees who have to be in quarantine or call in sick also cause problems for their bosses. Since parents currently do not have access to the day-care center buildings in most facilities, day-care centers must be sufficiently staffed to bring the children into the house in the morning and bring them back outside to their parents in the evening. They also need enough staff to look after the children throughout the day, but not so many that they can’t keep up with salaries, along with the added expense of personal protective equipment, cleaning services, and administrative support. Kasten, head of child care in Greensboro, says 12 of her 28 employees were away from home for a day for a combination of COVID-related reasons and scheduled absences. This creates logistical problems for both castes and the working parents who rely on their services. “If I don’t have enough staff to operate safely,” she says, “then I have to close the whole building.”

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