Child Care Centers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 61,500 child care centers in the US provide care for infants and children, and offer services out of dedicated facilities (private centers) or residences (home-based centers). Most child care centers are small, independent operations – 79% have a single location and 78% employ less than 20 workers.
Potential for Liability
Providing care for children is a high stakes operation, where even small accidents and errors can have severe consequences.
High Turnover
Finding and retaining permanent staff is a problem for the child care industry due to low wages, lack of benefits, long hours, and challenging work.
Industry size & Structure
A typical child care center operates out of a single location, employs 17 workers, and generates about $927,000 annually.
- The child care center industry consists of about 61,500 companies, employs about 1,040,000 workers and generates about $57 billion annually.
- Child care centers include nursery schools and pre-schools.
- Most child care centers are small, independent operations - 79% have a single location and 78% employ less than 20 workers.
- Pre-school age children of working parents average 36 hours of care from child care providers per week.
- Unlike other educational service providers, accreditation is not critical to operations: Less than 10% of child care centers are accredited.
- Large companies include KinderCare Education, Learning Care Group (La Petite Academy, Childtime, Tutor Time, Montessori Unlimited, The Children's Courtyard), and Bright Horizons Family Solutions.
Industry Forecast
Child Care Centers Industry Growth
Recent Developments
Apr 1, 2025 - Early Head Start Funding may Be At Risk
- Staffing cuts at the US Department of Health and Human Services (HHS) may negatively impact a federal-to-local program that funds child care and other support for the poorest families in America, according to the Hechinger Report. The staffing cuts are part of a reorganization of the Administration for Children and Families, which administers Early Head Start, the program through which the funding for child care and other support is provided. Regular Head Start serves children three to five years old; Early Head Start is for those under three. A federal funding freeze in early 2025 was the first shock to child care providers, then many Head Start federal support positions were terminated by the Department of Government Efficiency. The Department of Health and Human Services announced on March 27 that it plans to eliminate a further 10,000 jobs.
- The cost of child care now exceeds the price of college tuition in 38 states and the District of Columbia, up from 33 states and DC since the beginning of the coronavirus pandemic, according to the Economic Policy Institute (EPI). EPI used 2023 federal and nonprofit data to compare the monthly cost of infant child care to that of tuition at public colleges. Average costs range from $521 per month in Mississippi to as much as $1,893 per month in Washington, DC, for households with one 4-year-old child, according to EPI.
- Child care facility owners contacted by the Federal Reserve Bank of Kansas City noted increasing liability insurance premiums as an emerging challenge for their business. One provider said that their premiums increased 94% in 2023. Another suggested that a growing informal child care network is operating without insurance due to the rising costs. Increasing operating costs, particularly rent and insurance, result in higher tuition costs for families in the absence of additional public funds, but there are limits to tuition increases, according to the National Association for the Education of Young Children.
- Child care industry employment and average wages for nonsupervisory employees increased slightly during the first month of 2025, according to the US Bureau of Labor Statistics. Child care industry revenue increased 3.5% year over year but decreased 8.9% quarter over quarter during the third quarter of 2024, according to the US Census Bureau. Child care center sales are forecast to grow at a 4.88% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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