The more I think about it, the more I realize daycare centers probably don’t make nearly as much money as people assume.
My three-year-old goes to daycare, and we pay around $1,000 per month. Sometimes they send home a list showing which children are assigned to bring certain food items, so we have a rough idea of enrollment. The last time we counted, there were about 18 kids in my son’s class. That’s roughly $18,000 in revenue from that classroom each month.
Now consider the costs. There are four employees plus a manager. Even if each one only makes $15 an hour, payroll alone consumes a huge portion of that revenue. Then there are utilities, insurance, food, equipment, building maintenance, transportation costs for the bus, licensing requirements, and everything else needed to keep the facility running.
If anything, they may not be charging enough.
The real issue is that the entire system seems broken from the start. Daycare is barely affordable for many families, yet many childcare providers are operating on razor-thin margins. Parents struggle to pay for care, workers aren’t highly paid, and daycare centers themselves often aren’t making huge profits. Somewhere along the line, the economics simply don’t work very well.
okay it’s easier for me to analyze if i annualize the numbers. 18k monthly revenue is 216k annual revenue. 15/hr is 30k/year (assuming a 2000 hour FTE year. it’s really 2080 but the math is so much easier at 2000) with four employees that’s 135k/yr. You’ve got 81k left for other expenses like food, cleaning supplies, advertising, legal bullshit and whatnot else that all comes out before you get to the owner’s cut.
the first two years of most businesses are where they fail. usually because they did not have enough cash on hand to cover two years of expenses when they opened, and it takes about that long on average for a business to break even.
The more I think about it, the more I realize daycare centers probably don’t make nearly as much money as people assume.
My three-year-old goes to daycare, and we pay around $1,000 per month. Sometimes they send home a list showing which children are assigned to bring certain food items, so we have a rough idea of enrollment. The last time we counted, there were about 18 kids in my son’s class. That’s roughly $18,000 in revenue from that classroom each month.
Now consider the costs. There are four employees plus a manager. Even if each one only makes $15 an hour, payroll alone consumes a huge portion of that revenue. Then there are utilities, insurance, food, equipment, building maintenance, transportation costs for the bus, licensing requirements, and everything else needed to keep the facility running.
If anything, they may not be charging enough.
The real issue is that the entire system seems broken from the start. Daycare is barely affordable for many families, yet many childcare providers are operating on razor-thin margins. Parents struggle to pay for care, workers aren’t highly paid, and daycare centers themselves often aren’t making huge profits. Somewhere along the line, the economics simply don’t work very well.
Only 1k? Where are you?
okay it’s easier for me to analyze if i annualize the numbers. 18k monthly revenue is 216k annual revenue. 15/hr is 30k/year (assuming a 2000 hour FTE year. it’s really 2080 but the math is so much easier at 2000) with four employees that’s 135k/yr. You’ve got 81k left for other expenses like food, cleaning supplies, advertising, legal bullshit and whatnot else that all comes out before you get to the owner’s cut.
the first two years of most businesses are where they fail. usually because they did not have enough cash on hand to cover two years of expenses when they opened, and it takes about that long on average for a business to break even.
even if that’s only 50k a year after all is said and done it’s 50k a year where you don’t have to do shit.
play a sad fiddle for all the daycare owners.
you really have no clue, do you