The Childcare Business Coach
The Childcare Business Coach
The Shocking Truth: Why 91% of Childcare Businesses Fail
The shocking truth about childcare business longevity will make you rethink your entire approach to ownership. Did you know that a mere 9% of childcare programs survive beyond the 10-year mark? Even more alarming, 41% close before completing their first year, and a staggering 80% shutter before hitting the two-year milestone. These statistics represent real businesses, real dreams, and real investments that vanished—leaving their owners with nothing to show for years of hard work.
What separates the successful 9% from the rest? After nearly two decades in business, I've identified three critical factors that determine whether your childcare center becomes a valuable, sellable asset or just another statistic. First is tenacity—that unwavering determination to continue despite challenges. When facing an eviction notice or personal tragedy, the ability to keep pushing forward becomes your lifeline. The successful few possess this "never give up" mentality that carries them through inevitable rough patches.
The second crucial element is financial literacy. You must intimately know your numbers, from conversion rates on tours to profitability breakdowns by classroom. Even as someone who "would rather have a root canal" than review financial statements, I've learned that delegating this responsibility isn't enough—you need accountability systems that force regular engagement with your metrics. Without this knowledge, you're flying blind, potentially raising rates too high (stopping enrollment) or keeping them too low (bleeding resources).
Perhaps most important is being future-focused. The childcare owners who succeed develop concrete plans extending years into the future, then reverse-engineer these visions into actionable steps. Even dedicating just 15 minutes daily to strategic goals accumulates to 62 hours annually—time that compounds into meaningful progress. This structured approach transforms vague "someday" dreams into tangible achievements.
Your childcare center should function as your retirement program—a valuable asset you can eventually sell, not just a job that ends with nothing to show for your efforts. This perspective shift from survival mode to strategic growth makes all the difference between the 9% who thrive and the 91% who struggle.
Ready to position yourself among the successful few? Join us at the Child Care Business Summit this June, where we'll dive deep into these success strategies. The time to commit to your future is now—because your childcare center deserves to be more than just a statistic.
So hello and welcome to the Child Care Business Coach podcast. Today we are talking about something extremely important. If you want to be a survival of a business owner, or even if you have a nonprofit, it does not matter. Did you know that only 9% 9% of all child care programs make it past 10-year mark? Is that crazy? 41% close down before their first year in business and 80% will be gone before they even hit the two-year mark. That's crazy, right, and that's pretty much for businesses in general. But what I was really surprised to see is that 91% of all businesses period do not make it past the 10-year mark. That one just blew my mind, to be honest. I was really surprised to hear that so many businesses go out of business. It was actually quite shocking to me that so many businesses fail within the first nine years and I was kind of excited because I am one of the 9%. I'm going to be approaching my 18th year in business, so that is pretty exciting and I'm sorry I have my cat snuck in my office when I didn't see. So this is what happens when you do things, live right and again say hello as you join. But it's just a crazy statistic and there are things we can do to make sure that we are not one of those 91% that go out of business and we are the 9%. Something else I want you guys to think about.
Speaker 1:Some of you might be thinking well, I don't want to be a business owner that long, but most of you probably do want to be able to scale right, at least sell your company. None of us open a business to have nothing at the end of the day, do we? Not a single one of us do this. All of us open with hopes of having an income, doing something better and having a tangible asset we can sell. For many of us who are business owners and for you directors, this is really going to be a podcast episode. That is, for the owners out there, but you directors, this is important for a couple reasons. You may want to become an owner eventually and you also can understand a little bit about what your owner is going through and help them to make sure this isn't that you guys just don't become another statistic. So this is important for owners and directors.
Speaker 1:But what is it that we do that's so wrong? Right and honestly, we don't have 401ks and all the other things right as an owner, depending on how you have your company structured. There's so many things that we need to think about. So how can you make sure that you have a tangible asset? Right? I have a whole training I do. That's called CYA cover your asset and it's all about making sure you have a tangible, sellable asset when you're ready to call it quits, instead of facing bankruptcy and instead of having this option of not having anything left right. That is such an important thing.
Speaker 1:We all want something, at the end of the day, to be able to sell. Who wants to shut down their business with nothing to show for it? Right? We put so much into our companies, and not just the money. It's the time, the energy, the exhaustion that goes into it. So there's a few things. The number one well, maybe I'll go backwards.
Speaker 1:One of the most important things that people who succeed and who make it past that nine, 10 year mark, who make it past the two year mark, have is that they're tenacious. They have this tenacity and this fortitude to fight. There's this thing inside of them that they just can't give up, right, and they just keep going, keep going, keep going. I can tell you that is me, as I was doing this study and this is something I've been studying for a couple months now I found that I don't have all of the things that it takes to make it long-term right. I will always be transparent and honest with you guys. I don't have all of the things that it takes to make it long-term right. I will always be transparent and honest with you guys. I don't. I have a lot to work on. I don't have a couple of the things in place, but the ones I do have are the reason I've made it, and my tenacity is one of them. I will not give up. When I had an eviction notice on the door of my center, I didn't give up. When my husband died, I didn't give up. That is one of the biggest things that people make it through. Now I'm going to go through this super quick. I'm going to just show you what they are, but I have a whole training series that I do on this subject and it's really not going to be able to fit into a 10 to 20 minute podcast episode.
Speaker 1:However, this is going to be the main focus of the Child Care Business Summit. This year that's going to be happening June 19th, 20th and 21st, and this year we're going to be focusing on the owner and the directors, so make sure you get your tickets before they sell out. We still have early bird pricing. Early bird pricing won't be for much longer, so please make sure you get your tickets. You don't want to miss out, because we're going to show you how to be one of the 9%. I don't want to be 91%, but most of you listening right now will be Between all the platforms that I'm on. Right now. I have a little over a hundred people watching us live right now. Right, that means that out of all of us, only nine of us are going to be here. Nine of us will make it.
Speaker 1:Think about that, you guys, when you go to these conferences, look around. Only 9% are going to make it right, and it takes tenacity. It takes a few things. The next thing is knowing your numbers. You have to know your numbers. You have to know your metrics. This is my weakest point. I do not like numbers. I'm not a math person. It's kind of funny my oldest son actually has degrees in math and advanced degrees, and I'm not a math person.
Speaker 1:So what do I do? First of all, I did have to educate myself on the literacy of understanding what am I looking for? Looking at my metrics, keeping up with them, knowing exactly when I hit this. I need to either raise my rates or I need to enroll all the things I don't like doing it. So normally I always make sure that I hire somebody to come in and kind of keep me on track, because this is my weakest point, and when I told you guys that I don't have all of them, this is the one I am not good at. I know it's super important. I literally, you guys, I would rather have a root canal right. And so what have I done to correct that problem in me? Well, we schedule weekly meetings so that I have to look at it, and I have my bookkeeper whoever's the person in my life at the time that's helping me with my financials. They're on a call with me once a week and we talk about it. Right, it's that accountability and that's really. Can I do it? Yes, do I know how to do it? Yes, I don't like to do it.
Speaker 1:And one of the things I know like, especially with my ADHD brain. If you have ADHD, this is a big deal and we don't really put enough stock into this, but ADHD is a disease of executive brain function. Right, and a lot of times where things are difficult like this for us, it's even harder for you If you have ADHD. It's even actually harder for us with ADHD to really be able to, I guess, follow through right with the executive brain functions. So if you find that you have a really hard time doing your books and keeping up with your numbers and knowing your metrics, get an accountability partner. If you don't know how to read this stuff, if you don't even know what a KPI is or a P&L or a balance sheet, or you can't tell me what your gross sales are and you need someone to help you learn financial literacy, message me. That is something we can help you with at Child Care Business Professionals and I know many of you have wanted to become a member but it's been too expensive During this economic time. We hear you. We hear you. So we have a new option for you that is much, much cheaper, so that you can get the education that you need and have a prosperous center and be one of the 9%. My passion is for saving the early childhood field and I'm going to make sure I make pathways to help you to save your center. That is my one of my biggest things, right, and of course, it's because the children deserve it. Children deserve high quality programs, which means they deserve for you to know your numbers and to stick with it. For me, it's my biggest weakness.
Speaker 1:I lost my uh last year and things started to fall apart for me because I I don't like looking, I don't. So I didn't have that accountability person in my life for a little bit and I noticed that I just would put it off. I'm like, oh, not doing it today, not doing it today, not doing it today. Well, suddenly a month goes by and then another month, right, and it's like, oh crap, and and the basics were happening, like the books were being kept and I wasn't doing the deep dives, right, I wasn't doing the. What are my ratios looking like? Am I breaking even on my in my infant room? Is all of this working as it should, right? What do my indicators look like right now? Do I need to raise my rates? Maybe I raised them too much, which is actually what I did last year. I raised them too much, so I didn't know my metrics, I didn't know that nobody was enrolling at the new rates, right. So before I lowered them, I had to.
Speaker 1:I have to know, you've got to know these things. Are you tracking those kinds of things? Do you know the ratio of tours that you're giving based on your conversion rate? Do you even know what the word conversion rate means? Right, if you don't message me? You need to know these things If you're going to be part of the 9%. That doesn't fail, and I really, really, really want you guys to understand that.
Speaker 1:Failure also means that you might make it to 10 years, but you've closed your doors instead of selling your business. Right? If you do not have a sellable, tangible asset by the time you're done and you're ready to retire, then you have failed. I know that sounds harsh, but it's the reality and we need to make sure we set ourselves up. Your childcare center should be your retirement program. You didn't do this and put years of effort and the money you've put into it just to fail, did you? So I like to keep these short and sweet. I do like to respect your time and also you guys.
Speaker 1:Let me know in the chat what you're feeling through all of this. Are you ready? Do you know your financials? Do you have everything in tact, like you're supposed to. Are you really prepared and poised to be one of the 9%? And let me know, where are you not hitting it and where are you getting there?
Speaker 1:But the number one thing, the most important thing, in order to make sure that you are one of the 9%, is you have to be future focused and, thank God, this is my superpower. I live in the future and, as I've been doing the study and, by the way, you guys, there's so many more indicators in there I'm just going over the like three of the most important ones and the ones that I see through my own clients that are lacking Right, and so, again, I am focusing my entire child care business summit on this subject. So get your tickets. But being future focused, this is probably the biggest weakness I see, and there has to be a balance of being present and future. But I live in the future.
Speaker 1:Literally, I always have a 10-year plan going. How many years am I? I think I'm six years into my 10 year plan right now. So I create a 10 year plan and I do something that's called reverse engineering, and this is something that I help every single one of my clients with. Um, we are going to figure out what is your goal and how are we going to get you there through reverse engineering, right, even if your goal is to exit and sell a profitable business. We're going to figure out okay, how long is it going to take us to have some good P&Ls that are sellable, right, so that your childcare center is actually a tangible asset that you can sell. And then we're going to reverse engineer. This is where we are.
Speaker 1:So, for me, this is what I do. I look at this is my 10 year goal, right? And then I say, okay, in 10 years, this is where I want to be. So then I break things down and I look at in the next five years, what do I need to do to get there, to get 50% of my 10 year goal met? And then every year and this is something again I lead my clients Every December, my clients, we have a group meeting and we go through this entire system every year. But every year we figure out okay, what do we want for this year? What do we need to accomplish to get to that five-year mark? That's going to get us to the 10-year mark, right, and some of you guys aren't quite there yet to be able to think 10 years into the future. So I may only lead you two years into the future, but that's okay, we're still getting there. We're training your brain right. We're training your brain to think the way it needs to think for you to succeed and to get to your goals. So at the 10-year mark or, I'm sorry, at that one-year mark we reverse engineer and say what do we need to do to get us here? And then every quarter we're going to look at what do we need to focus on this quarter to achieve these goals? That'll get us to our year-end goal. And every month we're going to sit down and look at what do we need to do this month to get us to that goal. And then every week we're going to do the same thing. And then, every single day, you're going to pick three targeted action steps that are going to get you to your goal. Three achievable action steps to get you to your goal. Three achievable action steps.
Speaker 1:Now, many of you just go to work right. You have no plan, you have no process. You are just kind of flowing every day through life. So five years from now you're going to be in the same place you are today. But now imagine if you just pick three things, and let me tell you, it does not have to be three huge things, right? It does not have to. It could literally be three things that take you five minutes to do. Right, that's it. It doesn't have to be huge.
Speaker 1:Imagine if you just work on your goals for 15 to 30 minutes a day after an entire year, even if you're only looking at five days a week, right. And let's say you take two weeks off and we're only looking at 50. I'm going to need my calculator for this. I'm starting to do some calculations here and my brain will be too slow for it. So we're going to look at, let's say we do five days a week, times, and I'm going to give you guys two weeks off, 50 weeks out of the year, which is 250, right. And now let's multiply that by just 15 minutes a day. You've now worked towards your goals 3,750 minutes. Now, if we divide that, you've just put 62 hours. 62 hours, but just focusing on your long-term goal for 15 minutes, 62 hours in a year.
Speaker 1:Now, let's say, five years from now, where are we? 312 hours, right? So how many of you guys are doing that? Most of you aren't doing anything, period. So for me, when I hear 312 hours, my brain goes to that's not nearly enough to master something. So for me, when I hear 312 hours, my brain goes to that's not nearly enough to master something. It takes 10,000 hours, right, and I do put a lot more time into mine, but to start, that is still more than what you're doing now. And if you guys look, I want you to think back on your life a year ago, two years ago, five years ago. How much has your life changed? How much momentum have you gotten? All of those things that you talk about, the one days, the one day I'll do this. One day I'll do this when are you in that today? Where are you today in your one day I will do this or that, right, right, if you look in your past five years, many of them are probably still a one day. Many of you can probably look 20 years back and your one days still haven't happened. So why not give 15 minutes? And yes, you do have 15 minutes.
Speaker 1:I was once an owner director. I had two centers. I was an owner director and I had two centers. I was an owner director and I thought I had no time I convinced myself that I had zero time and there was no time to work out. There was no time for this, there was no time for that, right, and my husband got very sick Right, and my deceased husband was terminally ill and I had to become his full-time nurse. Well, during that process, I had to learn some time management. I had no choice. And what I discovered is I had so much more time. I just didn't know how to manage my time. I didn't know what I was doing with my time. And that is what happens with 90% of my clients.
Speaker 1:The first thing I do is take you through time management because I know you're not going to be successful if you don't have the time right. So I teach you how to have the time and it's amazing what happens when I teach you how to have the time Suddenly, you have more than 15 minutes, you have an hour. Shalyn is probably my star student on this, shalyn Mansfield. Shalyn is probably my star student on this, shalyn Mansfield, but she's amazing. She went from working 50 something hours a week to not having to work at all when she learned the time management techniques that I taught her, when she really transformed her center and she went from a 3,000 square foot center to a 20,000 square foot center and she still had a lot of time on her hands. It's just learning how to take control of your time and when you do, you will have time to do all these things. You will have time to focus on your future and start reverse engineering right.
Speaker 1:So my challenge to you today, just to get started. I have two challenges for you today to get started on your path to becoming one of the 9%. My first challenge is to start focusing on your future. Do what it takes. That means you're going to invest in the things that you need to invest in, both time and money, because it's not going to happen. I want you to ask yourself how's what I'm doing now working out for me? And if it's not going to happen, I want you to ask yourself how's what I'm doing now working out for me, and if it's not, then it's time to make a change. My second challenge to you is get your ticket to the Child Care Business Summit now.
Speaker 1:Everyone who goes always comes back and tells me how much it has absolutely changed their life, their life. I make sure that I'm bringing so much value to you that you're going to change your life, not just your business. So invest in yourself. Make the time if you want to be one of the 9%, because you can. I hope everybody has a wonderful rest of your leave. Please subscribe If you haven't already, like I'm subscribed to this video and you can also find the Child Care Business Coach podcast on all of the podcast channels out there. We're everywhere Apple Podcast, oh my gosh, all of them. I'm forgetting the big ones iHeart Radio, I'm even on Alexa. We're everywhere. So make sure you guys subscribe and listen on the podcast as well. Have a great rest of your day, everybody.