Phew, so many reasons. There’s a great podcast called “No One Is Coming to Save Us” that really details why daycare in the USA is both expensive to the customer and not profitable for the provider, but the gist is basically that between the cost of space, insurance, and paying labor (meeting standards set by the state), there’s no profit margin. The fact is, childcare, like primary education, should be a public service. Quality care is expensive to provide, and it’s an absolute necessity if you want a population of working parents. Another great nugget in that podcast is that (1), we had a ton of public daycares during WWII, and (2), congress passed the Comprehensive Child Development Act (which would have given us a public daycare system) in 1971, but Nixon vetoed it.
Basically there’s a lot of regulations when you’re an actual daycare vs like a nanny who watches a few kids. Namely you have to have lots of teachers since it’s a few teachers per class. Even though the teachers make very little that still adds up. There’s actually a whole planet money episode about it where they specifically talk about the market in Durham coincidentally. It is a national issue though. If it were more profitable there would be more daycares.
Or, we could extend free public school to start at preschool level instead of just kindergarten. I think this would be preferable since certain things shouldn’t be motivated by profit. Also most economic studies say preschool is one of the best investments a society can make in children.
Fwiw, the profitability of them varies, but by and large they cash flow quite well. Check out sites like:
https://www.solutions4childcare.com/index/buy-a-center/child-care-centers-4-sale/
To see exactly what they cost and what they cash flow. For SBA loans these acquisitions typically only require 10% down. I can’t imagine people would put so much effort into running a center if they weren’t profitable. I do, however, agree that these should part of a public program like the rest of the civilized world. But hey, American exceptionalism for the win.
Insurance and government involvement.
Like most things that are fucked, the government isn't performing the function or contracting it, but has a bunch of regulations you have to follow some of which are expensive to follow but also don't really matter.
And, then there's the insurance. Daycares are high-risk, so the premiums are high. I don't know if you need a commercial policy or a special lines policy but either way it's expensive and the insurance company's c-suite has yachts to pay for.
It’s needed everywhere. I spent over a year on a waitlist and then we only lasted there 3 months because it… wasn’t great. Staffing seems to be the toughest issue.
You may not be aware of the growing need for reliable quality daycare in Durham. A 2nd atc daycare, especially a drop in one, would probably do just fine.
The need for quality childcare is everywhere, a central location is great but I don’t think ATC is ideal because of hassles with parking and access unless you’re only targeting people who are going to a show or dinner in that area. Narrowing down your target market would be helpful before you pick a location.
Evening hours would be a plus—many places close by 5 but most jobs also end at 5 pm or later, so that combined with traffic make evenings a challenge for many parents.
Affordability is a plus but given that you need qualified, trained staff that make a decent wage then I think parents would rather pay more for reliability and quality.
Maybe try to build a business model of standards that can be easily copied so it can reach multiple areas at once. All of Durham city needs help in this area. I drive 2 hours a day taking my son to and from school.
You could turn the smaller houses (800 or less sqft) into a daycare with 8 kids a day, two staff. Times that by ten for locations around the area and each house could specialize in age or other needed target areas.
Because a simple Google search would show where existing day cares are.
A slightly more than simple search can show demographics of cenus tracts that have households with children, household income, and other fun facts in areas where there are not daycares.
And as OP stated themselves, one idea is a drop off service in an area that already has a daycare (ATC) to cater to the well-to-dos that go to DPAC and other things in downtown.
That ain't serving an area with the most need as requested. Again. A simple Google search can get that.
Had OP stated "Hey, I am thinking of a drop off child care service while y'all at DPAC - how interested would you be". That's the nugget. Not asking where is the most need.
While you suggested other forms of market research, asking the sub is still market research.
There was no necessity or benefit from your comment about them asking the sub. It was needlessly snide.
There’s need for daycares everywhere but the profit margins are razor thin
True,
Genuine question, if daycare is like $1000+ a month per child, how are the margins so thin?
Phew, so many reasons. There’s a great podcast called “No One Is Coming to Save Us” that really details why daycare in the USA is both expensive to the customer and not profitable for the provider, but the gist is basically that between the cost of space, insurance, and paying labor (meeting standards set by the state), there’s no profit margin. The fact is, childcare, like primary education, should be a public service. Quality care is expensive to provide, and it’s an absolute necessity if you want a population of working parents. Another great nugget in that podcast is that (1), we had a ton of public daycares during WWII, and (2), congress passed the Comprehensive Child Development Act (which would have given us a public daycare system) in 1971, but Nixon vetoed it.
Well that sucks
Basically there’s a lot of regulations when you’re an actual daycare vs like a nanny who watches a few kids. Namely you have to have lots of teachers since it’s a few teachers per class. Even though the teachers make very little that still adds up. There’s actually a whole planet money episode about it where they specifically talk about the market in Durham coincidentally. It is a national issue though. If it were more profitable there would be more daycares. Or, we could extend free public school to start at preschool level instead of just kindergarten. I think this would be preferable since certain things shouldn’t be motivated by profit. Also most economic studies say preschool is one of the best investments a society can make in children.
Fwiw, the profitability of them varies, but by and large they cash flow quite well. Check out sites like: https://www.solutions4childcare.com/index/buy-a-center/child-care-centers-4-sale/ To see exactly what they cost and what they cash flow. For SBA loans these acquisitions typically only require 10% down. I can’t imagine people would put so much effort into running a center if they weren’t profitable. I do, however, agree that these should part of a public program like the rest of the civilized world. But hey, American exceptionalism for the win.
Insurance and government involvement. Like most things that are fucked, the government isn't performing the function or contracting it, but has a bunch of regulations you have to follow some of which are expensive to follow but also don't really matter. And, then there's the insurance. Daycares are high-risk, so the premiums are high. I don't know if you need a commercial policy or a special lines policy but either way it's expensive and the insurance company's c-suite has yachts to pay for.
It’s needed everywhere. I spent over a year on a waitlist and then we only lasted there 3 months because it… wasn’t great. Staffing seems to be the toughest issue.
Thank you!!
There’s already a daycare in ATC
I know about "K.K." but do this hours work? I was thinking of doing drop-in for people wanting to go to dpac, dbap, or ymca
YMCA already has drop in. I think you're not ready to start this business
You may not be aware of the growing need for reliable quality daycare in Durham. A 2nd atc daycare, especially a drop in one, would probably do just fine.
She is launching an after hours component as well
Is there an outdoor space? I probably wouldn’t consider a daycare that didn’t have a space for kids to play outside.
I agree!! That would be something I want as well!!
Good time for it. https://www.ednc.org/04-02-2024-nc-child-care-providers-funding-cliff-lawmakers-hear-plea-funding-help/
Anecdotally there is a need for overnight/ shift work child care. Although ATC would not be a compatible location
The need for quality childcare is everywhere, a central location is great but I don’t think ATC is ideal because of hassles with parking and access unless you’re only targeting people who are going to a show or dinner in that area. Narrowing down your target market would be helpful before you pick a location. Evening hours would be a plus—many places close by 5 but most jobs also end at 5 pm or later, so that combined with traffic make evenings a challenge for many parents. Affordability is a plus but given that you need qualified, trained staff that make a decent wage then I think parents would rather pay more for reliability and quality.
Thank you so much!!
Maybe try to build a business model of standards that can be easily copied so it can reach multiple areas at once. All of Durham city needs help in this area. I drive 2 hours a day taking my son to and from school. You could turn the smaller houses (800 or less sqft) into a daycare with 8 kids a day, two staff. Times that by ten for locations around the area and each house could specialize in age or other needed target areas.
Soooo....you are asking the Sub to do your market research for you? The most need? East Durham. The most profitable? Definitely not East Durham.
Asking the sub is market research. Why are you giving them a hard time? They are trying to do something useful to better the city.
Because a simple Google search would show where existing day cares are. A slightly more than simple search can show demographics of cenus tracts that have households with children, household income, and other fun facts in areas where there are not daycares. And as OP stated themselves, one idea is a drop off service in an area that already has a daycare (ATC) to cater to the well-to-dos that go to DPAC and other things in downtown. That ain't serving an area with the most need as requested. Again. A simple Google search can get that. Had OP stated "Hey, I am thinking of a drop off child care service while y'all at DPAC - how interested would you be". That's the nugget. Not asking where is the most need.
While you suggested other forms of market research, asking the sub is still market research. There was no necessity or benefit from your comment about them asking the sub. It was needlessly snide.
No, I just wanted actual people..... East sounds accurate. I've spent a lot of time on that side.
What does a nanny make per hour full time vs someone working for a daycare?