There’s a number of reasons why you might be reopening an existing daycare business. Financial troubles, purchasing a previously closed facility, or maybe you just stepped away from your daycare and are now wanting to reopen.
The reopening process is fairly similar to the start-up process, but there are a couple of key factors you should consider to ensure it is a successful relaunch.
To reopen an existing daycare business you should:
- Identify any problems with the previous business
- Revise your business plan
- Rebuild customer base
- Analyze local competition
- Adhere to local laws and regulations
- Hire & train employees
Identify any problems with the previous business
Whether the business was yours when it closed or not, there was a reason it had to close its doors instead of remaining open. The bright side of this means you’ve already got some first-hand experience and can use this knowledge to help your business come back stronger and better.
Some common problems that daycare businesses face are:
Managing & growing enrollment
If you don’t have children at your daycare, you are not going to have enough money to stay afloat. Managing how many kids you have at your daycare, as well as having enough capacity to adequately care for them, are critical for the success of your daycare center.
If your facility had this issue previously, you should start by taking a look at the previous marketing plan. If you aren’t sending the right message to the right people, your likely going to struggle with enrollment. Whether it is a new message, different channels, or just an increase in your marketing budget, making these changes will help get you consistently full classes day in and day out.
Safety & security
Some daycare owners just assume that since they are looking out for the children at their facility, they are going to be safe and not at risk. When your daycare facility lacks the proper safety protocols, it will have an array of negative effects on your business.
First, parents are hyper-aware of the safety of their children. When they walk into your facility they are going to be scanning for anything that looks like it could be a potential hazard. This could be things like children playing too rough, lack of a secure perimeter, or inattentive staff. If parents sense that your facility isn’t safe, they will look elsewhere for childcare services.
Also, if your facility doesn’t comply with your city and states safety regulations, you could face fines or even be shut down for not being in compliance.
If safety & security were a problem previously, do your research about how to put systems and protocols in place to make sure your new facility is not only in compliance, but goes above and beyond to make sure every child is safe.
Some daycare owners are great at childcare but lack the administrative skills to run a successful daycare. Keeping accurate records, paying bills on time, and collecting payments from parents are just some of the things that can cause big problems if they fall through the cracks.
The solution for this is easy, get help. Whether you hire on a full-time employee to manage your business, a part-time employee for certain tasks, or freelancers that specialize in certain administrative tasks, you will need to find help one way or another.
Go back and assess what tasks weren’t getting completed, and then put in a system to ensure that the task will get done on time and completely.
Along with administrative tasks, some daycare center owners aren’t great leaders. Leadership is huge with any business, and the same goes for daycare centers. Some common issues due to a lack of leadership include:
If your staff feels like they are walking on eggshells and always doing something wrong, they will eventually become upset and will probably leave. Adequately training your staff will help you trust them so they can do their job without you looking over their shoulder.
Being a friend instead of a boss
You absolutely can (and should) be kind and respectful to your staff, you can even be friends with them. Daycare owners run into problems when they let their friendships with their employees disrupt their boss-employee relationship.
Be professional, be clear with your communication, and make sure you draw clear boundaries for what is acceptable behavior for your employees while at work.
Gossip can disrupt and demolish any business, team, or crew. This is another item that you should address while training employees and monitor consistently. You can put systems in place so employees can talk openly and freely amongst one another so there is no talking behind each other’s backs.
Letting little problems grow into big problems
Facing problems head-on lets you get it taken care of and move on to more important tasks. Having quality communication amongst your staff is a great way to eliminate problems while they are small and manageable.
There’s an ancient saying, “Crossing a river is easiest at its source”, you can apply this to your daycare business and you will see it is much better to just deal with the problem rather than letting it morph into a huge problem because you chose to ignore it.
Revise your business plan
Once you have identified and addressed the problems with the previous business, it is time to put them onto paper.
As a refresher, remember that your business plan should answer questions such as:
- Is this a viable business?
- Why wasn’t it viable before?
- What’s my target market?
- What will my expenses be?
- What’s my budget?
- When will I begin to turn a profit?
- How will I find customers?
- What type of business will this be (Sole proprietorship, partnership, LLC, or corporation)
Your business plan is meant to be a dynamic document that evolves as your business grows. Make sure you are updating your business plan regularly so it aligns with your goals and current status.
Rebuild your customer base
Whether the daycare facility was closed for 2 months or 2 years, you are going to have to do some serious work to rebuild your customer base. The best way to grow your customer base is to:
- Contact previous customers
- Offer an introductory deal
- Revise and pivot marketing campaign
- Offer exceptional service
- Offer incentives for referrals and reviews
Using your previous marketing plan as a template, analyze what worked and what went wrong in order to point you in the right direction for your relaunch. Once you have a handful of customers, make sure you are offering exceptional customer service and are asking for referrals in order to build a solid customer base.
The competitive landscape may have changed a lot or a little since you closed your doors. You should do a thorough analysis of the competition, even if things haven’t changed much. Analyzing your competition helps you find areas that are being underserved that you and your daycare business can profit from.
Adhere to local laws and regulations
Just like when your daycare was launched, you need to make sure you comply with all of your local laws and regulations.
Some things you need to do:
- Register your unique business name with the Secretary of State’s office
- File your federal tax identification number with state and local revenue offices
- Choose what type of business to register (Sole proprietorship, partnership, LLC, or corporation)
- Obtain a federal employer identification number from the IRS office and register the number with state and local agencies
- Obtain a business license from the Department of Revenue
- Obtain business insurance
- Join the National Child Care Association (NCCA) and any other associations you want to be apart of, you can find a list here
- Join your local chamber of commerce
If you need more information here are some more resources on the legal side of starting a small business:
Hire & train employees
The last step in relaunching your daycare business is to hire and train your staff. As you know, hiring the right employees can be the difference between a successful daycare business and another shutdown.
Training is something that often gets overlooked because owners feel that if an employee knows the basics of child care or has worked in the industry before, they know everything they need. Training employees properly is beneficial because it makes sure you and your employee are on the same page, they understand their expectations and responsibilities, and it builds confidence in them.
Performing a more thorough training costs more of your time upfront, but will help retain employees and keep customers and their children happy which will save you a lot more down the road.
Some areas where your employees need to be trained:
- Basic child care
- Safety and first aid
- Educational teaching
- Documentation/record keeping
- Customer service/interaction
Another great way to help out your new employee and make sure they are completing all their tasks are checklists. Checklists are a simple tool that can save you from big mistakes. Have a couple of essential tasks for each employee throughout the day so they can be productive and helpful.
- Do I have to register my business name if I am using the same name?
Yes, even if your business was never officially shut down, you should register your business name with local, state, and federal agencies such as the chamber of commerce, Secretary of State, and IRS.
- Do I need to tell previous customers why the business shut down?
No, if you are contacting previous customers to see if they are still interested in your services, you don’t have to openly advertise what went wrong previously.
However, if someone asks specifically what happened, it is best to have a truthful response ready for them. It doesn’t have to be detailed, but you can say things like “we had some financial issues” or “we needed to adjust our business plan”. This will give them enough information without getting into the details.
Please note: This blog post is for educational purposes only and does not constitute legal advice. Please consult a legal expert to address your specific needs.
Looking to re-start a business, this startup course and documents are what you need.
Meet Shawn Chun: Entrepreneur and Childcare Business Fan.
I’m a happy individual who happens to be an entrepreneur. I have owned several types of businesses in my life from a coffee shop to an import and export business to an online review business plus a few more and now I create online daycare business resources for those interested in starting new ventures. It’s demanding work but I love it. I do it for those passionate about their business and their goals. That’s why when I meet a childcare business owner, I see myself. I know how hard the struggle is to retain clients, find good employees and keep the business growing all while trying to stay competitive.
That’s why I created Daycare Business Boss: I want to help childcare business owners like you build a thriving business that brings you endless joy and supports your ideal lifestyle.