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

                                Mar 7, 2023 - Biden Administration Leverages Federal Subsidies To Increase Access To Child Care
                                • The CHIPS Act, the federal law aimed at boosting America’s semiconductor manufacturing industry, includes the first of what may be more attempts by the Biden administration to require entities that get government subsidies to provide access to child care for their workers. Congress didn't passed Biden’s child care proposals, and experts say that the administration is now leveraging one of the few tools it does have — a large amount of federal funding — to achieve some of its goals. The $52 billion CHIPS Act includes $39 billion in direct subsidies for new semiconductor factories to boost the production of the computer chips. Applicants seeking over $150 million in funding must provide access to affordable child care for workers building or operating new facilities.
                                • Child care employment was 8% lower in December 2022 than what it was in February 2020, according to the US Bureau of Labor Statistics. Waitlists are longer and the cost of child care is higher owing to a much-needed increase in average pay for workers. Working parents are struggling to return to the workforce either because they can’t find care or because they can’t afford it, according to the US Department of Labor.
                                • More public-health officials and doctors are encouraging masking to protect against respiratory diseases flu and RSV, in addition to Covid-19. Experts disagree, however, on whether masks are enough — and whether people are willing to wear them after the country has largely moved on from pandemic precautions—is another matter. “I’m not optimistic” that people are willing to mask again, says Eric Topol, director of the Scripps Research Translational Institute in La Jolla, Calif. “There’s such a reluctance to go what is considered backward, even though it’s actually forwards in terms of helping one another.” Masks help provide protection against flu and RSV, medical experts say, as do other precautions. RSV, a common respiratory virus, also often spreads through expelled virus particles on surfaces, so frequent handwashing and cleaning of contaminated surfaces can help fight its spread, says Scott Roberts, an infectious disease specialist at the Yale School of Medicine.
                                • 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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