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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 61,800 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 61,800 companies, employs about 869,000 workers and generates about $48 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

                                Coronavirus Update

                                Apr 25, 2022 - Many Children Are Missing Other Vaccinations
                                • Much of the recent conversation about immunization of children concerns their eligibility for the COVID-19 vaccine. Experts note, however, that the number of kids who’ve fallen behind on immunizations against diseases such as chicken pox and measles has increased during the coronavirus pandemic due to disrupted access to health care. Data from the Centers for Disease Control and Prevention shows evidence of the problem on a national scale, with “a 14% drop” reported in vaccine ordering and a 20% drop in measles vaccinations alone. Busy child care centers may face additional burdens because of this issue.
                                • The Paycheck Protection Program (PPP) is inching toward conclusion as 90% of two years’ worth of loans to small businesses nationwide have been forgiven. As of March 20, $708 billion has been forgiven, meaning that the recipients don’t have to repay the money, according to the latest data from the US Small Business Administration which manages PPP. Of that total, $209 billion — more than three-fourths, or 77% — of the $270.6 billion in PPP granted in 2021, the program’s second round — has been forgiven. For point of comparison, that stood at 63% in late December.
                                • The window to apply for Small Business Administration (SBA) COVID-19 Economic Injury Disaster Loan (EIDL) loans, Targeted Grants, and Supplemental Targeted Grants closed on December 31, 2021. The SBA had $11.8 billion in funds remaining across all of its programs as of December 24, 2021, according to The Business Journals. The SBA has been making billions of loans a week, which means the money could run out soon. The SBA will continue processing loan applications received before the deadline, including requests for reconsideration, and Targeted EIDL Advance (grant) applications, including requests for reconsideration. Small business owners who are still struggling with pandemic-related problems will have to look strategically for other grants and COVID-19 relief programs. Options may include private small business grants, state and local government grants and relief programs, and traditional SBA loans.
                                • Child care expenses have spiked by more than 40% during the pandemic, soaring from nearly $10,000 annually per child to more than $14,000, according to Center for American Progress data analyzed by online lending marketplace LendingTree. “So much more is being required of these centers during the pandemic, and these new, tougher safety guidelines from governmental agencies have forced them to ramp up their spending in order to comply,” said Matt Schulz, LendingTree’s chief credit analyst. Annual costs at center-based care providers for children ages 3 and 4 have increased 57% during the pandemic. Annual costs at center-based care providers for infants and toddlers (children 2 and younger) are up 37%.
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