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 61,400 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 14 workers, and generates about $777,000 annually.

    • The child care center industry consists of about 61,400 companies, employs about 956,900 workers and generates about $50 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
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Apr 3, 2024 - Moderate Sales Growth Expected
                                • Child care center sales are forecast to grow at a 5.35% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry labor costs increased during 2023 as employment and average wages for nonsupervisory employees increased slightly, according to the US Bureau of Labor Statistics.
                                • Childcare benefits deliver returns of up to 425% of their cost for companies across the US, according to a report from Moms First and Boston Consulting Group. Retaining as few as 1% of eligible employees because of childcare benefits can cover the cost of offering them. The case for offering childcare benefits grows even stronger when ancillary and intangible effects are taken into account, according to the report. Parents miss far less work when they can count on reliable, available childcare, for example.
                                • Some 56% of companies surveyed said that child-care benefits are their most pressing issue this year, up from 46% in 2023, according to the 2024 Future of Benefits Report from More than half of US employers are prioritizing benefits that help their staff manage and pay for the demands of family and work. The new benefits — from an extra bank of paid time off when a child is sick to cash stipends for a babysitter — beat out paid family leave and mental health benefits as being top of mind for corporate human resources departments, according to the report.
                                • The average household spends more than $700 a month on childcare across the country, 32% higher than 2019, according to Bank of America Institute. The largest increase was for those making $100,000 to $250,000 a year. That’s already hit other areas of consumer spending: Families with childcare payments have been spending at a slower pace than the rest of households since May and are dipping into savings at a faster rate.
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