The Childcare Business Coach
The Childcare Business Coach
Surviving Economic Cycles in Child Care with Cindy Lehnhoff Director at National Child Care Association
Running a successful childcare business requires more than just a passion for children—it demands business acumen, adaptability, and sometimes making tough decisions. Cindy Lenhoff, Director of the National Child Care Association, brings four decades of industry expertise to this eye-opening conversation about navigating economic cycles in the childcare sector.
Drawing from her journey from accidental preschool teacher to vice president of the second-largest childcare company in America, Cindy shares invaluable wisdom on sustainability during economic downturns. The post-COVID era has left many newer owners unprepared for normal market conditions after years of government assistance. Now, childcare entrepreneurs must learn to pivot strategically as their communities and enrollment patterns change.
One of the most powerful insights revealed is the importance of collaboration over competition. Rather than viewing neighboring centers as rivals, successful owners create intentional partnerships that benefit all—referring families to programs that better match their needs while focusing on their own strengths. As Cindy explains, negative incidents at any childcare center affect public perception of the entire industry, making cooperation essential.
The conversation tackles challenging topics like enforcing payment policies, discontinuing unprofitable programs, and learning to say "no" when necessary. Both speakers acknowledge that while these decisions aren't easy, especially for heart-centered educators, they're essential for long-term viability. "People pleasing is not going to get you to be one of that 9% of childcare programs that can survive beyond 10 years," warns Evelyn.
Whether you're considering food programs for financial stability, creating innovative services like hybrid "mommy and me" classes to address parental concerns, or simply trying to balance your educators' heart with a business owner's mind, this episode delivers practical strategies for thriving through any economic climate. Connect with Cindy and the National Child Care Association to discover additional resources for your childcare business journey.
You can contact Cindy here:
linkedin.com/in/cindy-lehnhoff-14175715
Website: nccanet.org/
Email
cklehnhoff@gmail.com
Don't miss out on the Child Care Business Summit 2025:
https://childcarebusinessprofessional...
Hello everybody. Thank you so much again for giving me your time Today. I'm excited I have a pretty cool guest on the Child Care Business Coach podcast. I have Cindy Lenhoff, the Director of the National Child Care Association, and Cindy is here. We've been having a lot of amazing discussions behind the scenes talking leading up to this podcast episode and there's so much that she is passionate about, just like me, and we're getting ready to just do some things together and work because we both have a major passion for this industry and I think we are aligned very much on our philosophies on where our industry is going, where the current climate is taking us. But, Cindy, I will let you introduce yourself and then we'll get into the conversation.
Speaker 2:Well, thank you so much, Evelyn, for having me. I have thoroughly enjoyed our conversations. We are equally passionate about serving families, working families in our communities, and it is one of the hardest jobs. Whether you're the educator, the owner, the director, the cook, it's one of the hardest jobs. So we have to make sure that there are individuals out there, and I believe you are definitely one that tries to hold up in admiration the individuals that are on the ground every day. And I had the opportunity to accidentally become part of the child care community In 1980, I became a three-hour-a-day preschool teacher for a large company.
Speaker 2:I did it mainly because my child was three. Well, one of my children was three my daughter and I wanted her to go to preschool. We were in a new town and I saw this sign that said they were opening this new preschool, which was a childcare center as well. That said they were opening this new preschool, which was a child care center as well, montessori based and I went in to see about enrolling her and I got recruited. Oh, wow. And the interesting thing about the recruitment was back in 1980, there were no early childhood degrees or CDAs, and I guess I ask a lot of good questions as a parent and the director asked me if I'd ever worked with children and I said well, I teach Sunday school ages three to five. And that was like. It was like saying I have a degree, 10 years experience in today's world. So she said have you ever thought about working in childcare? Well, I went to work and I stayed for 36 years. It was a company that was growing. It was a small, family-owned company. They grew to be the second largest child care company. They're still in business. However, they moved over and they're part of another company and I had the opportunity to grow with them.
Speaker 2:I was a director, I was a cook, I was a van driver back in the day when we had vans. I was a cook, I was a van driver back in the day when we had vans. I became a district manager, a divisional director and eventually I became a vice president and I retired from that position in 2016. And, needless to say, I learned a lot. There wasn't a lot of training back then, but the company I worked for as training and concepts and developmentally appropriateness and brain research, you know began to become available and knowing they did a great job training us on all of those things. But I tell you what you still learn a lot from just being in the schools, the centers, the classrooms, talking to again the boots on the ground.
Speaker 2:So I have had the opportunity in my career to accredit schools that I was overseeing as a multi-site manager in 12 different states. So that became a passion and as a result, somewhere along the line I was asked to be a board member for the National Early Childhood Program accreditation. When I retired, that organization had acquired the National Child Care Association that had actually lost its way and they asked me to be the director of that organization for six months till they could find someone. And I'm in my sixth year and I'm so happy that they have allowed me to stay. And my greatest joy is actually being able to talk to people in the field to find out what is it that you love about your job and what do you need to do to to keep it and stay in it and do what you love.
Speaker 1:Yes, absolutely that. That, yeah, that is a great passion and I love so much of what you guys do and I know I'm I'm really excited that we're going to start aligning. I know when I first reached out to you, it was for a lot of reasons. I'm seeing a lot of different states that I work with that are, honestly, the private child care is in trouble and I think we're very aligned on that and there's other associations out there that really aren't as business friendly as they used to be, which is why I do like aligning with you guys instead and why I reached out to you.
Speaker 1:But behind the scenes, before we started recording, we were talking about what are we going to talk about? Right, and I said, well, it'd be nice to have a conversation. We don't want to be political, but we kind of are a little bit, but not really right, because one of the things we were talking about is that the economy, everything we face in childcare and what we need to advocate right now. It happens in cycles and I think in our current climate, what we're seeing is so many people looking to the government for answers, for help, right, and no matter what administration is in power, it really doesn't. I mean, it kind of changes a little, but it really doesn't.
Speaker 1:So I know, for me, a lot of my clients and people who are reaching out to me right now are newer owners who weren't around during, like pre-COVID, right, and so this industry has been, honestly, pretty easy post-COVID, because there was so much money thrown at us, all of the ARP grants and all the things coming. It was kind of easy, and now we're back to like 2017 through 2019 type of culture in early childhood education in the private sector, so we're seeing a lot of really scared owners. So, before we got on, though, you were saying a little bit about how the economy goes in cycles. This is normal. These are normal cycles and in ECE, as private centers, we really need to learn how to go through these cycles. So what do you have? What is your take on that?
Speaker 2:Well, in the 36 years that I was in the business and of the 36 years I was, for 32 of those, a multi-site manager and I was throughout my career. I shifted and had supervisory duties over the operation and the financial outcomes in 12 different states, and economies sometimes are very geographical. I mean it could be flourishing in one part of the country and not in another. Right now we're kind of in a time where it's not flourishing anywhere. But at the same time, if you live long enough, you see the ebb and flow of the economy and you have to learn what to do when the economy is high and you're bringing in the money and you have to learn what to do when it's not. And one of the things that I've noted in my career not only with the people that I've worked with and supported, but also being parts of childcare associations in different states and being a part of a group of business owners you know is that a lot of times child care administrators are actually not child care administrators. They love child care, they were teachers, they have gotten, you know, a degree or education in this field and that's exactly what licensing everywhere requires. But they don't require the business side. And if you don't educate yourself on the business side prior to entering the industry, you're going to struggle because, no matter what you did before, it's different If you owned a coffee shop and now you're going to struggle because, no matter what you did before, it's different. If you owned a coffee shop and now you're in child care, it's different. You know we have regulations that we have to stand by and those regulations protect children. And you know there's no industry that uses the kind of labor that we do. But that labor is necessary, you can't avoid it. So it's a different business model. So there can be no waste Right? So I would say to people you have to look at educating yourself on how to manage the business side of the business and then you can determine whether or not that's something you're capable of or even want to do, because we'll be out of business really quick.
Speaker 2:And also, a lot of times people avoid change and what I've noted when the economy shifts, sometimes you have to look at different ways to do business. Sometimes you can raise your rates and it doesn't, and you can build your revenue that way, and other times you have to build it by enrollment. And then there are other times where you have to look at other programs, such as you know. I know that there are providers that don't always want to take a child that is subsidized. But neighborhoods change and when the economy changes, sometimes people go back to work or lose jobs and they go back to school. And now I qualify for subsidy and you're in a neighborhood where maybe that's what's happened and you might want to consider that.
Speaker 2:And then there's also the food program. I can't tell you how many people that I have been acquainted with that have tried to avoid the food program and it really is a wonderful program for children and it saves most businesses 5% to 6% to be able to utilize somewhere else, whether it's teacher salaries or you know, supply needed supplies, and again we have to be willing to make those shifts to keep our businesses strong.
Speaker 1:Oh, I so agree. Earlier today I was having a conversation with some high level owners and that was one of the big things we were discussing is that you have to be willing to pivot and you have to watch the market. So one of the things I'm going through, for example, is I've been running a before and after school program in my area for 18 years, but this year, for the first time, I'm losing a substantial amount of money on it. I can't break even. So now, for the first time in 18 years, I have to look at dropping that program and replacing it with something different.
Speaker 1:As an owner, I have to be ready to pivot, and it does take sustainability, and I know for a lot of leaders and one of the leaders that we were counseling today it's hard, because the other part of us being teachers and loving children and then going into these administrative jobs the other part of that is, our hearts are a little bit different. Right, we don't always have that heart for business and it isn't easy to make these tough decisions on. Okay, I'm going to have to drop my before and after school program. Some of these children have been with me for six and seven and eight years, right, but I also have to take into consideration what is it costing? Where could that money be going? How is it really affecting my business?
Speaker 1:And you have to be able to make those hard decisions and I think it's very important for us to acknowledge that they aren't easy. We don't like making them, but you get to a point in business where you realize I have to pivot right now, otherwise we have a choice. We don't like making them, but you get to a point in business where you realize I have to pivot right now, otherwise we have a choice we get to be Blockbuster or we get to be Netflix, and part of the reason Blockbuster is no longer a household name is because they didn't pivot when it was time to pivot.
Speaker 2:Right.
Speaker 2:Yeah that is so true. I can remember I had gotten to a point with some of my centers that I was overseeing that were becoming way too full of school age children, leaving little or no space for younger children. Because, as you said, these children go grow up with you. Because, as you said, these children go grow up with you. And you know, I was licensed in most of my schools in this particular time period for a hundred and as the kids grew up or they maybe joined us, you know, because we had a lot of good, you know word of mouth, you know which is what you want, that's what it's called word of mouth mouth we had to back down and say we are, instead of taking children through age 12, we are going to take them through the fourth grade. And we use grade versus age because, you know, sometimes a fourth grader is nine and sometimes they're 10.
Speaker 2:And that you know there were people that were, you know, really upset by that. But we would have potentially put ourselves out of business because we weren't able to. It wouldn't mean our building's, you know, half empty all day and we can't do that. So you know, again, we use our heart and our head. It has to balance. I always told those that I were coaching and mentoring and supporting is that it's a scale and on one side you have your head and on one side you have your heart, and it can never do this. It can never do that. It's got to stay even.
Speaker 2:But in those scenarios we actually, you know, reached out and because we were's a lot of people doing good things and they may be able to teach you something. Or, in this case, we knew who was doing good things because we were part of the child care associations and the director organizations and we knew that there were some centers that could take. You know that we could say to a parent check out this school. Yes, you know, miss Jane is a wonderful person. I you know. See her at our monthly meetings. I but, of course, use your own judgment, but you know she's only a mile from here. She services the school you go to, and that was, you know, what I would tell you to do first and see what you think and let me know.
Speaker 1:Yeah, I agree on that so much. One of my big things is the collaboration over competition and in our industry it's pretty brutal when it comes to competition where a lot of times it's almost like centers are pitted against each other. And and I have to just say honestly, when you really start learning and building your business acumen, you start to realize that one of the most strategic business moves you can make is to be collaborative. And the most successful companies in the world like McDonald's and Taco Bell, they actually collaborate. It's collaboration over competition is so much more profitable.
Speaker 1:And to what you were saying, sometimes, like for me, I'm dropping my before and after school program Now my collaborator down the street. Her before and after school program may be thriving, so she may take that on, but drop her infants where I will take the infants. So when you are in communication and collaboration you can actually create these intentional collaborations and really enhance each other's business. The other thing on that, I think it's important for us to remember that this is about the children, it's not about us, and every family is going to have a different need and I realize fully my program is not best for every family. Some people are better off in a different philosophical child care program that is more aligned with their family values. Right, and some children are better in home providers because my center is large and it might be overwhelming for them. So I love that you brought up the collaborations and joining these associations and really forming alliances and stop looking at yourself as a competitor but instead start seeing your fellow child care centers as collaborators.
Speaker 2:One of the things that I, you know, used to bring up to any of the teams that I had the opportunity to support over the 30, you know, almost 40 years, is the fact that, when a child care center is on the news, you know something that has occurred that nobody wanted to see happen leaving a child in a box or something of that nature.
Speaker 2:I said most people only hear the words child care. They don't even hear the name or the brand and they suddenly put us all together. So if we work together and support each other, I think we would have less situations like that, because sometimes it's a conversation when you're, you know, when you're meeting or together to say, oh, so tell me, what is everybody doing for the summer? What are you doing to? You know, make sure your staff is, you know, fully trained on, you know what they need to know to keep children safe on field trips and from the sun. I work for a large company and we had a lot of tools and we had a lot of collaboration and the centers I managed were close together, but it still didn't mean that somebody in the community because an owner, operator in the community was focused on that community. And I may be in several communities and I want to know what works best here.
Speaker 2:I've been in military communities. You know that you're going to be open earlier and your center is going to be practically empty by four or 430 and everything shifts and I know, when I first started doing business in military towns I had to learn that I was kind of like well, we open at 630, we close at six. This is how we staff the building in the morning and how we're like. And then all of a sudden I'm in a community with military and everything shifts. So the people that were in that community doing business, you know, said oh, this is a little different. Or when you're in a college town, staffing a center in a college town is different than staffing it in a bedroom community where there's a lot of stay-at-home moms that need to work but don't want to leave the community to work.
Speaker 2:Again, it's talking to other people and learning and we used to do what we called competitor visits and it was a requirement of the company I worked for and I would go in and you know, sometimes people were. I would always be forthright and say this is who I am and we're encouraged to get out and visit with, you know, the people in our community, our competitors, you know, just to see how things are going. And if you're struggling with anything and you know what, how's business for you? We're not here to take your business and we want you to come. We want you to come see us because in the end, as a community, we want to do good work for children and families. But I wasn't always received really well because I seemed to be somebody before my time and it was because it was a requirement of my job to report back.
Speaker 1:Right, yeah, now that's some really good points. And kind of, on that, knowing your community and going back to the point of pivoting, I think both of them kind of go hand in hand. So something we're going through in my community and I think we're starting to see this a little bit nationwide. And in our last conversation you were saying to me that you noticed that things start on the West Coast and kind of move nationally, and I'm kind of noticing that now too. And one of the things we're seeing here is this major fear of institutions, right. And going back to what you were saying also about, when people start, something happens at a daycare or a childcare center that is bad, and then it's on the news and it becomes this collective opinion of daycare, right. And now this, well, that's kind of what we're going through right now, where it's this collective opinion of. But it's this collective opinion but it's more anything institutional. It's like the system is corrupt.
Speaker 1:So I just realized, ok, we need to figure something out for this. That's what my community is going through in this time that we live in, that we live in. So basically, I created a new program where it's a hybrid of a mommy and me and a co-op kind of combined, but my marketing is pretty much well, if you don't trust the system, that's okay. Then come to school with your child. Your child still needs the education, they still need the socialization and I get that you don't trust the system and I am open to you being with your child to make sure I'm not indoctrinating your child. Anything else you can monitor, you can learn with your child, you can still oversee and your child gets everything they need.
Speaker 1:So I think it's very important during these tough economic times in order for us to thrive and not just survive. Look at your community. What are the gaps, what are the needs, how can you fill it, what can you do? And don't be afraid to pivot. That is how you're not only going to survive, but you're going to make it through these tough times and not have to really be so stressed out and worried about what is incoming.
Speaker 2:Right and worried about what is incoming Right. I love the idea of what you said about the mommy and me and how you have used it as a way to make people that maybe aren't comfortable leaving their child.
Speaker 2:That certainly serves a great purpose for someone that may later decide to go back to work, so that's a great idea. It is a great example of pivoting. I know for me there's been a couple of pivots in my career because sometimes as neighborhoods change and they age and they become more secondary and you can buy family homes for less money because they're older Then that your market has changed, the and maybe some of your customer base, you know, is different and maybe a little lower income, maybe they're even qualifying, you know, for some kind of subsidy Right.
Speaker 2:And I can remember when I first introduced to some directors in Oklahoma where we had the opportunity to accredit our schools, which I was excited about because I thought, oh gosh, we're, you know, to be nationally accredited and to be able to recognize the work that people do and what they put into this you know, every day and to get as good as we possibly can get for children was exciting, but it was also a way for me to add some dollars to my revenue.
Speaker 1:Yeah.
Speaker 2:That when I couldn't get a rate increase, I could get extra dollars in a tiered reimbursement program to be able to help cover raises for my teachers, because accreditation typically requires, you know, credentialed or degreed teachers. And it also and then sometimes, when it sometimes it becomes necessary to again, you're taking care of a certain percentage of children. They may not even be on subsidy, but their families qualify for a food program just like they do in school, and I know I had to have many a talk with directors who were afraid to do it, but I would give them an option. Well, here's what we're going to do, because your school is not.
Speaker 2:I had schools that sometimes were barely, you know, surviving, and it's like we can do one of three things.
Speaker 2:We can, you know, look at closing the school, but you have a lot of children and I bet there's a lot more that could utilize this wonderful program.
Speaker 2:Or we can raise your rate, $20 a week, or we can get on the food program. So if you were to ask your parents which one of those three would work for their family at this time, because the excuse was always well, they don't want to fill out the paperwork. You know they have to fill out a form, yes, yes, what can you do for the public school? And I said ask them yeah, you want to fill out this form and we won't raise your rate this year. And oh, and, by the way, we're adding free breakfast because before they were paying. And the director would say, oh well, now that you put it that way. So sometimes it's teaching ourselves to think in a way that maybe we weren't taught to think, or that we don't want to think, and and that's that's what we have to do if we want to be sustainable and be out there, you know, long term, running or administrating our, our child care businesses, because we're needed.
Speaker 1:Yeah, I so agree with you what we did in my food program, because we got the same thing. Parents didn't want to fill out the paperwork, so I basically said, ok, I understand you don't want to put your income information, that's totally fine. So if you choose not to, then we will be charging you an additional $25 a week to cover the cost of food. And but you're right, I had a hundred percent of the parents fill it out after you tell them, like I totally respect your privacy and it's going to cost you $25 a week because that's basically what it's going to cost me. So it's kind of funny when you suddenly change the conversation a little bit, it does change their minds. The other thing, too, I want to point out, in a discussion that came up this morning as I was talking to those other owners, one of the things they said well, we had one of the newer owners and talking with a panel of seasoned owners that I am affiliated with, and she just said well, when you make these changes, doesn't it make your staff and parents angry? And the answer is yes, sometimes it does.
Speaker 1:There's always going to be somebody not happy. Yes, it does, and as leaders we have to make those decisions. We have to look at the health of our business, what is best for the children, what is best for our teachers? And just know that, yes, there are going to be people who aren't happy about it, and that's okay. You still have to move forward and make these decisions and it's not always easy. Sometimes it is hard for us too, because we want to make everyone happy. But people pleasing is not going to get you to be one of that 9% of childcare programs that can survive beyond 10 years. So just know I love to just touch on the psychology behind it and the mindset, and just giving you permission to know that it's not going to be easy and you, it's okay to do it anyway. It's okay not to make everybody happy.
Speaker 2:Well, yes, because you might be saying yes to something that that really could do not only harm to your business a business but the business of children. Yes, I can, you know I can, oh, my goodness I. I, so many parents in my life and times, you know, have wanted to. You know, bring quilts for their the crib, yeah. Or they want them to sleep on their backs instead of their their tummies, and saying yes to those things would do great harm again to a child. But then it would back right into you losing your business too.
Speaker 2:And we have to be prepared to say the why. I think that's the one thing that you know. I'm going to tell you the why behind it. And if you still disagree, the good news is you don't have to choose me to be your provider. As much as I want to be your provider and want to take care of, you know, your little one, I can't be talked into something, you know, that is going to do harm to my business and especially, potentially, to a child, child, yeah. And so, again, they have choices. They don't. They can make another choice, Because if you have 100 families in your center, my goodness, you could be doing things 100 different ways. I can't even imagine what that would be, but I will tell you that's one of the things that in my, in my career that you have, that most, most directors have to be taught how to say no.
Speaker 1:Yeah, absolutely, and it's not easy. I don't want, like sometimes I feel like I can come up here and say these things and make it seem easy. So I want you to know that this is still a struggle for me, to going through these seasons where you have to undo something you did once before and make these uncomfortable changes and and sometimes we don't like it, but we understand that in order for us to have a sustainable business. I love what you said earlier about telling the directors well, we could close our doors, because sometimes it does come down to that we could close our doors or we can make this change or we can make this pivot. So it's just know that it isn't easy, but we have to do it anyway.
Speaker 2:We do. We do because we want to continue doing what we love, what we're good at and what we know makes a huge difference. Yeah, and I think that one of the things that always comes up on. I have a top 10 list of things directors and owners have to do if they're going to be long-term successful, and again, one of them is learning to say no, but, and also learning to collect your money, because it's really hard to have to say I can't continue without you know payment, and once your family is able to get back on track with paying us weekly, then we will welcome you back.
Speaker 2:I think it's learning how to say something I used to tell people to don't say policy, it's our policy. Don't say policy, just say it is what we do here. You know, whatever the name of the center is, this is what we do and this is why we do it. Yeah, it might be a regulation and it might be a policy, but this is what we do and this is why we do it. And, by the way, it's in our handbook, and so I don't. You know we try very hard not to make anything a surprise Again. You're still going to have people that are unhappy. You're going to have people that get mad, that cry, and again it's dealing with different emotions, but trying to keep yourself in check while you're dealing with those yes.
Speaker 1:Yes, yep, and just know it's not you and it's okay for them to be angry. They have that right to be angry and you have a right to disagree, that's okay. But standing in your power and just not allowing your staff or the parents to steal your power when you're just doing what you have to do to make your business sustainable, that is so very important and it is okay to do that.
Speaker 2:Because the needs of the many will always outweigh the needs of the few, and catering to one family if it jeopardizes, you know, 25 other families, you know, then, really, that it doesn't make sense.
Speaker 1:It's detrimental Absolutely.
Speaker 2:I would say, too, that directors and administrators and owners should always have in their back pocket places that they can reference parents to. Like you know, most cities and counties have child care aware referrals, yes, or carecom, or child care licensing may be able to provide a list of licensed child care homes or you know something, so that you're giving them something, information that can help them make the you know, to make the move to something that may work better for their family. I'm all about trying to. You know, cut ties when that happens needs to happen in a way that allows for everybody's dignity to remain intact and to give them a little bit of guidance without holding their hand or doing it for them.
Speaker 1:I agree 100%. When we let a family go, we'll do the same thing. We'll just help place them somewhere else first and just let them know, and sometimes, like with the payment issue, we have to let them go. That's okay and we can still help them through it and not burn a bridge. So but, cindy, thank you so much for giving us your time. I really, really appreciate you and I'm hoping that we get to hear from you more often. This has been an awesome conversation.
Speaker 2:Well, and we look forward to having you in the near future on one of our national child care podcasts, and I'm happy to know that the West Coast is, you know, well represented with someone doing great work for children, and let's definitely stay in touch.
Speaker 1:Definitely, thank you. Thank you, evelyn, you're welcome. For those of you listening, I will put Cindy's contact information, just more information on where you can find out more about the National Child Care Association. And, by the way, they are also an accrediting body that, cindy, you do represent.
Speaker 2:So NECPA National Early Childhood Program Accreditation, and if you ever have any questions about NCCA or NECPA, please don't hesitate to contact me. I am passionate about accrediting centers and making sure that our child care businesses have support and resources, and that's what we do at NCCA have support and resources, and that's what we do at NCCA.
Speaker 1:Well, thank you so much for that work. So all of the contact information will be in the show notes. Thank you everybody. Thank you everyone Bye-bye, bye-bye.