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Plenty to learn about finance in the business of child care

The business of child care is one of those economic drivers that seldom seems to make it on to reporters’ radar screens.

Yet the costs, quality, accessibility and availability of child care and early education services affect workers, parents, employers, state agencies, suppliers and many others in our audiences.


A child-care provider helps a young boy do a little imaginary microwaving. Photo by Flickr user familymwr

And according to the U.S. Census Bureau, there were some 52,748 child care establishments nationwide in the 2007 Economic Census – or about twice as many as there were new car dealerships, three times as many as there were credit unions and a few thousand more than the number of bars in the United States.  That’s a lot of real estate and a lot of revenue – about $17.7 billion a year, according to those Census Bureau figures, and jobs for more than half a million workers.  The Department of Labor’s Bureau of Labor Statistics predicts the child care sector will grow 15 percent by 2018, compared to an average of 11 percent growth for all sectors.


As this New York Times article “Cuts to child care subsidy thwart more job seekers,” points out, however, day care costs are proving a stumbling block to families in a moribund economy; it’s a timely story to localize.  Compare and contrast with local employers that offer on-site or subsidized child care as a sidebar or standalone workplace story.

The only difficulty in covering the child care industry – including funding – is its labyrinthian complexity.  In addition to simple day-care centers, you have early childhood education programs, Pre-K programs and other structured systems overseen by or aided by state and local agencies.  Licensing requirements vary by state, funding programs vary by state, nomenclature varies across geography and across the field. You have home day care centers, visiting professionals programs, church-sponsored programs, teaching centers, workplace day care providers – the list goes on and be prepared to spend some time on background research before diving into your story.

The upbeat aspect is there are myriad stories here, from use of government stimulus grants to workplace and career profiles to stories about franchisees and for-profit care.   Keep in mind that these centers are consumers of real estate, construction and facilities services, consumable supplies from food to diapers to TV sets – meaning the economic ripple effect in your community is considerable and also open to many story possibilities.

Helpful resources include the federal National Child Care Information and Technical Assistance Center, the National Association of Child Care Resource and Referral Agencies, The Pew Center on the States Pre-K Now campaign and the National Conference of State Legislatures (NCSL). The Pew and NCSL sites are especially helpful in determine which states cut programs for early childhood care in recent years; most have been spared and some augmented.  Also, Google “child care assistance” and your state name to find the agencies that help parents find aid; they and a search of Recovery.gov may help you trace which companies and centers in your region received some of the billions of stimulus dollars earmarked for child care services. And here’s a link to Cornell University briefs on the effect of stimulus spending on child care.

There are other angles to the business of child care, including:

Baby-sitting screener services. The nationally franchised SeekingSitters.com was started by a private investigator and now connects clients (who pay a membership fee) with sitters who have undergone complete background checks, including financial and criminal histories.  The service tells me it also backgrounds all adults living under the same roof as the sitter AND runs a check on clients as well, for the safety of the babysitters.  The local franchisee told me that her business is far exceeding projections and that she and her husband already have bought another location in the southern tier of states. Nose around your area also for nanny schools and other alternative businesses.

Niche services, like Cubes & Crayons, a drop-in Silicon Valley center that provides workspace for parents and supervised care for kids, so mom or dad can try to get some work done while still interacting with their child and while networking with other telecommuters.  This company seems to be limited to California but look for similar entrepreneurs in your market.

Child care as an investment. Most of the big firms seem to be owned by private equity funds these days, interestingly; some are available as franchises to local investors.  It’s a great second-career, workplace or small-business story, especially when you consider liability issues, the tension between keeping costs down and recruiting decent workers, location problems and other considerations due to the nature of the business.

Personal finance. I once assigned a story comparing rates for various informal (teen-age) sitting services in various communities across our metro area, taking into account number and age of kids, lateness of the assignment, light housekeeping duties, overnight stays and other variables.  It was quite an eye opener to see the range of fees parents were paying for a few hours away from the patter of little feet, and a popular story with readers.   On a more serious note, you can look into the economics of paying for child care, child care tax credits and subsidies, employer reimbursement for child care when workers must travel, alternatives for latch-key kids like web cams and security systems, getting licensed as a day car provider and many other household financial angles to the child care dilemma.

And here’s a Smart Money article on more consumer caveats in the child care realm.


In Beats, Economy, Featured, Personal finance, Small | Private | Non-profit.

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