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 61,800 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

                                Recent Developments

                                Nov 8, 2022 - Seasonal Respiratory Illness Hits Early
                                • Respiratory syncytial virus (RSV) is increasing among US children. "I've been working in pediatric emergency medicine … for over 15 years now, and this is definitely the most patients that I've ever seen," said Dr. Sage Myers, a pediatric emergency medicine physician at the Children’s Hospital of Philadelphia, the oldest children's hospital in the country and one of the largest with 594 beds. RSV is more of a late fall or winter virus, but cases started ramping up in the summer, Myers added. Experts say that children’s immunity to these viruses may have waned over the last two years due to lack of exposures during the pandemic, which may explain why these seasonal respiratory viruses are hitting harder and earlier than expected.
                                • The Food and Drug Administration authorized COVID-19 vaccine boosters for children who are five years old and above. The Moderna vaccine has been approved for children six years and older, while children as young as five can get the Pfizer vaccine. Both vaccines have been approved in their bivalent form. The monovalent version of the Pfizer-BioNTech vaccine is no longer qualified for a booster dose. A monovalent vaccine has a small portion of the original mRNA strain of the virus, which is often referred to as the “ancestral strain”. The bivalent vaccine contains portions of the newer version of the virus, such as the BA.4 and BA.5, in addition to the ancestral strain.
                                • About 43% of parents of children under 5 say they will not get their child vaccinated against Covid-19, according to survey results from the Kaiser Family Foundation. The US Food and Drug Administration authorized Covid-19 vaccinations in children as young as 6 months in mid-June. Only 17% of parents of children between 6 months and 5 years old said that their child has been vaccinated or will be as soon as possible. Another 27% say they will wait and see how well the shots work in other kids, and 13% said they will vaccinate their child only if required to do so for school or child care.
                                • 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.
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