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Childcare Industry News

Why Do Daycare Centers Fail?

April 12, 2021

Frustrated Daycare Administrator for failing daycare center

In today's business environment, a daycare center seems like a stable enterprise. As parents return to work, children need to be looked after.

Daycare centers provide an all-day reliable service for busy parents. And, these facilities help children learn and socialize in a safe environment.

In the United States, the childcare industry creates a combined revenue of more than 21 billion USD. And, there are more than 54,000 daycare facilities across the country. Even with this promising data and need for the service, why do daycare centers fail?

Failing daycare centers can happen to new or old businesses. This is the result of many factors: lack of expertise, unwillingness to change or grow, or financial issues. Read on to learn (and avoid) these reasons why daycare centers fail. 

Lacking the Expertise: How to Run a Daycare Center 

Like any business, a daycare center's priority (besides childcare safety) is profitability. To be profitable and avoid daycare center mismanagement, business leaders must be knowledgeable.

Management needs to have the know-how to run your center. This includes accounting, marketing, and much more. Daycare centers can fail because of this lack of business acumen.

Consider investing in yourself or your employees to improve expertise. Books, podcasts, or business coaching can add value to your business and help maintain profitability. 

Failure to Adapt 

In times of COVID-19, daycare centers have faced tremendous strain on business operations and contracting new clients. You may have shifted your business model and adopted new hygiene processes that weigh on your bottom line.

But, some poorly run daycare centers are not taking these changes and new restrictions seriously. In turn, parents are not willing to trust these facilities to take care of their children.

Consider COVID-19 restrictions as a way to instill trust and reputability in your clients. Adapting to this "new normal" helps you avoid the disappointment of a closed-down daycare center.  

Lack of Quality Inventory 

Are you buying inventory for your daycare business? To avoid a business failure, it is important to buy quality products.

For example, The Ground Level Inc. toddler cot sheets are affordable but do not sacrifice quality. These sheets are made of excellent fabric and are long-lasting.

Quality inventory can help differentiate your business in terms of marketing. And, long-lasting items will save your business money over time. 

Financial Issues 

Do parents pay you on time? Have you missed a monthly bill payment? Do you have a budget for your business?

Managing your finances is key to avoiding a daycare business failure. While a business advisor or accountant can help, it is important that you are tracking your own balance sheet and cash flows. A monthly business audit can help reveal impending financial issues like overspending, missed payments, or invoices. 

Why Do Daycare Centers Fail? Avoid These Missteps to Maintain Your Business 

So, why do daycare centers fail? It comes down to making poor business decisions. Whether you have been in business for years or just opened, bad decisions like financial mismanagement will cost you clients and stability.

Remember, the daycare industry is a booming industry. Avoiding these missteps can help you maintain your business and profitability long-term. 

If you are looking for more ways to add value to your business, contact The Ground Level Inc to learn more or purchase our products. Our Made in America childcare items can add quality to your daycare center. 



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