Growing your business

One of the most important factors for growth is having customers.

Do you have a waitlist? 

The first sign that it might be a good idea to expand your program is if you have more people wanting to enroll than you have spaces available. If all your current spaces are filled and you keep getting requests from families who want to enroll, this means there is enough demand to support your expansion.

Is there demand for the type of care that you plan to offer? 

While a waitlist will give you a good idea of how much demand there is, it may not tell you everything about the types of services people want. Talk to your current families to see if they'd be willing to join your expanded child care program. For example, maybe you're adding spaces at your current location and could easily fill them using your waitlist. However, if you're opening a new location in another part of town or are moving from a family care setting to a center-based program, these could be reasons for your families to leave if the location isn't convenient or if they prefer family care over a center. 

Does your growth plan align with the needs of your community? 

Talk to current families, those on your waitlist, and others in the community to help you understand who needs child care in the area you are thinking about growing in. It's helpful to learn about the area and the other types of child care programs are available. For example, are there special services or features about the location and families that you need to consider? What hours and other services, such as before and after school care, are families looking for? What about the ages of kids that you plan to serve? Making sure your growth plan fits the needs of the community you want to grow in will help give your expanded business the best chance to succeed.

Talk to your current employees about whether they are interested in working at a new location (if you're adding one) or if they know anyone who might want to work in the program. If you are expanding into a new area, it's helpful to ask people who know the area about ways to find employees, such as a local workforce board. You don't need to have every position filled before you start to grow, but you should have an idea of what your staffing needs will be. For tips on hiring, visit the Hiring webpage. 

If a provider tries to grow their business when they're not in a good financial position, it can harm the business or even cause it to close. Make sure you have a budget for the current year to guide your growth and planning. To review budget and finance resources, visit the Budget and finances webpage.

A budget tells you how much you think you'll spend and how much you are spending over a year. Cash flow tells you how much money you have coming in and how much you have going out each month. 

Assume you have $5,000 in expenses over the year, and you have $6,000 in revenue against it. You see that and know that you're going to make a profit of $1,000 for the year. Now, assume that you'll have $5,000 in expenses in January, but you don't get paid the $6,000 until March. Using cash flow, you see that you have a problem because you must pay the expenses before the cash comes in. Can your business withstand floating expenses like these before your revenue comes in? 

When you plan to grow, you'll need additional funds to make it a reality. Whether you're adding a classroom to your current facility or building a whole new center or a family care business, you'll incur additional costs. In these cases, accessing capital can be helpful because it provides money to help you grow to then make more money. However, you should make sure that you are able to handle any associated costs with accessing capital. To learn more about creating a business plan, visit the Operations webpage.

Disclaimer

The information contained here is for educational purposes only and is not intended to constitute legal, tax, or financial advice.