Author Topic: Drop-In Childcare (Read 3571 times)

Neo · « **on:** February 25, 2018, 12:37:13 PM »

Hi All. I'm always trying to think of business ideas and came across one that I like. I would love to hear opinions from anyone who has experience in this area or thoughts about starting this kind of business in general.

The Idea: Drop-In Childcare
Summary: Parents can drop kids off for a short amount of time to run errands, go to appointments, classes, date nights, etc. Traditional childcare requires a much larger financial commitment. This is ad hoc, as-you-need-it childcare. Probably would charge $7-8 an hour with discounts for additional kids from the same family. You could run different specials and promotions, host parties, etc. There is an existing business that does this in my metro. They have two locations, one in the extreme north and the other in the extreme south of the greater metro area. They have been in business 9 years. I would open mine on the west side of town.

I'm mostly interested in hearing a) does this seem like a valuable service that you could see being used and b) what do you think the startup costs would be, especially insurance.

Thanks all!!!

Johnez · « **Reply #1 on:** February 27, 2018, 01:05:58 AM »

Wow, first I've heard of this idea. Sounds awesome, something I'd definitely use if there were places around here. Prices sound reasonable as well.

SC93 · « **Reply #2 on:** February 27, 2018, 12:52:54 PM »

I've seen places try this and apparently it does not work or else everyone would already be doing it. I bet the problem is not being able to plan. Monday you have 6 kids and Friday you have 60. Then next Monday you have 15 kids and next Friday you have 3. Never know how much staff to have and probably very hard to keep going financially. I think even the large daycare places have a limited number of drop-ins because of this. But if you have the extra money to spend and can afford to lose the extra cash.... give it a shot. All it can do is fail and then you start over again; or maybe you will become rich from it..... no way to tell until you give it a try.

FIFoFum · « **Reply #3 on:** February 27, 2018, 12:58:50 PM »

Look into the laws in your state/location for maximum ratio of caregiver to child and any total maximum # allowed.

Biggest start-up costs are for staffing to comply with these laws.

How does the successful business manage this? How will you?

Neo · « **Reply #4 on:** February 27, 2018, 01:05:49 PM »

Thanks for the input. I did look at the ratios but don't completely understand it yet. Basically seems like you have to follow the rule for the strictest age group you have. Not sure how this would work since i wouldn't know who would be there day to day. Staffing would be my wife as the primary and then local college students hopefully filling in the gaps. I'm curious to hear if more people find the service appealing before I dive deeper into the research.

SC93 · « **Reply #5 on:** February 27, 2018, 02:26:59 PM »

As a customer it would sound GREAT to most parents. I don't think that will be the problem.

HPstache · « **Reply #6 on:** February 27, 2018, 03:19:04 PM »

This business model exists in my corner of the USA. I believe it's called "perch & play". Seems to be decently successful, though they have changed to a subscription-type service now, so I'm not sure if the "by the hour" was panning out. They also have a little cafe that serves coffee, beer & wine while you watch your kid play... no outside food allowed. It's a good combo and worth looking into.

SC93 · « **Reply #7 on:** February 27, 2018, 03:58:09 PM »

^^^This made me remember, back when the casino first opened in 1995 across the river from Omaha, they offered by the hour child care. After about 2 years or less they stopped offering it.

If it is just your wife that will be doing most of it and she just wants to make a little extra money here and there, it might work out for her. I doubt those college kids work out but for extra money I bet it could work for your wife. My guess is before too long she will get people that want her to watch them on a schedule and she gets full and has no time for drop-ins.

Now over-night care might be something that could add income if you are willing to put up with that. I know it wouldn't work at our house as we have a 0 kid - 0 animal limit. I'm the only kid that gets to stay at our house. :)

cats · « **Reply #8 on:** February 27, 2018, 04:11:08 PM »

Our daycare offers this. A big drawback is that even for drop-in care, parents have to fill out a huge stack of paperwork. Once you have it filled out you are set for multiple visits, but if you're initially just thinking of using it as a one-off it's pretty daunting. I'd check what kinds of documentation your state might require you to have on hand for each child.

Neo · « **Reply #9 on:** February 27, 2018, 04:16:48 PM »

Yeah i could see that. Maybe a one time registration would suffice. You have to know who the parents are, allergies, emergency contact info, etc. Good call out. I would also incorporate an app at some point for payments, scheduling, etc.

SC93 · « **Reply #10 on:** February 27, 2018, 07:00:26 PM »

I'm sure it's not up to YOU what questions will be asked. I bet they have mandatory questions. Pay app would be a good things.

cats · « **Reply #11 on:** February 27, 2018, 07:09:56 PM »

Quote from: SC93 on February 27, 2018, 07:00:26 PM

I'm sure it's not up to YOU what questions will be asked. I bet they have mandatory questions. Pay app would be a good things.

Yes, a big chunk of the paperwork at our daycare comes from the state.

SC93 · « **Reply #12 on:** February 27, 2018, 09:56:41 PM »

I'm sure that will be gone over when she becomes certified through the state. They do it every day. To be such a low pay job it takes a lot of hoops to jump through. Hopefully they find a cheap but good insurance so it doesn't take all of their profit.

Neo · « **Reply #13 on:** February 28, 2018, 04:35:51 AM »

Cats - do you mind giving me some guidance on what insurance might cost? Google led me to believe I could get insured for as little as $1k a year. But that seems super low to me.

cats · « **Reply #14 on:** February 28, 2018, 05:54:32 AM »

Sorry, by "our" daycare I mean the daycare I use, not the one I run. No idea on insurance.

littlebird · « **Reply #15 on:** February 28, 2018, 06:28:08 AM »

It's a good idea, but I think difficult to implement. It's highly dependent on the state, but in MA where I live you can't have more than 3 infants per 1 provider. The ratios go up with age, but with how unpredictable your clients would be how would you know the number of providers required? Without a schedule of who and when will be using your service how will you know to have the college kids show up? It would basically be like being on call all the time and for low pay.

Is $7/8 an hour really the going rate for childcare in your area? I'm paying more like $13 and that's for a full-time spot at a daycare (so presumably somewhat of a discount). Damn, childcare is expensive where I live...

Neo · « **Reply #16 on:** February 28, 2018, 06:30:21 AM »

I agree the unpredictability is a hurdle. Our ratios are a little more lax but not much.

Yes, that rate is competitive for my area. Maybe a little low. I think I could probably charge more in the $10 range for the flexibility and then more in the $8 range for any full timers.

Cpa Cat · « **Reply #17 on:** February 28, 2018, 06:43:10 AM »

I think the major hurdle to the plan is the overhead. You'd be looking at renting a fairly nice commercial property, carrying insurance, dealing with licenses and inspection.

There's a reason that most childcare places go for the more consistent income of traditional, full-time child care.

How many kids would you need in there per day to break even?

It seems like if your wife was really interested in doing childcare as a job, an in-home daycare might work out better to start.

Neo · « **Reply #18 on:** February 28, 2018, 07:01:02 AM »

I would likely buy the building. One I had my eye on is a duplex on the busiest road in town. Half is rented for $850/month by a print/copy store. That would greatly reduce my "rent" cost. $200k in excellent shape. I own several rental properties so I would fold this into my existing portfolio. Honestly the building is a good buy even if I don't do the daycare center.

I would love to start at home but we have a GSD. He is an amazing dog and great with our kids but idk if many parents would feel comfortable leaving their children around him just based on his looks. I wouldn't want the liability either, no matter how well behaved I think my dog is.

For breakeven I'm not sure. I played with the math a little just to see. If I operate 6 days a week for 15 hours a day (6am-9pm) and average 3 kids per hour at $10/kid/hour that's $11,700 a month. Subtract $100 for insurance, $400 for "rent" (to myself), $500 for utilities, $2600 (10 hours a day at $10/hour x 26 days) for other employee wages, $500 for miscellanous supplies...that's $7,700 after expenses. Of course you'd have taxes as well, but that's $92,400 pretax profit. These are VERY rough numbers obviously, so don't get too hung up on the specifics. Is there any major expense I am missing? I think the numbers can work. This would also be a woman-owned business so we would look for any benefits that might provide.

Freedomin5 · « **Reply #19 on:** February 28, 2018, 07:11:04 AM »

Don’t forget that children are considered a vulnerable population which means background checks and a more extensive criminal background check for anyone employed by your center. Also may be required by your state to only hire people with CPR/First Aid certification, etc.

This type of model works in China. We used it for DD when she was around 1.5 years old...but that’s only because of lax laws. Well, the laws are quite strict but are rarely enforced. We stopped using the service when we showed up one day to find over 40 kids ranging from 2-6 in one large “classroom” staffed by 4 untrained “teaching interns” (basically Bachelors of Education college students) while DD lay on the floor with a high fever. They didn’t know she was sick because she wasn’t crying; she was just listless. And they ignored her because she wasn’t bothering the other kids.

I don’t know what minimum wage is in your state, but in Ontario, you can make more working as a cashier at McDonalds. Why would I want to be paid only $7-$8 per hour to take on the huge amount of risk involved in watching other people’s kids? As a parent, you can bet I would sue if anything disasterous happened to my child while she was in your care.

I’m not saying don’t do it. I am saying do your due diligence and know what you’re getting yourself into.

MrsDinero · « **Reply #20 on:** February 28, 2018, 07:24:02 AM »

I think one of the problems you will encounter is consistency. You might have 5-10 parents that want to use it 1 day and you would have to staff accordingly for that day, then another day where no one will use it. How would you plan for that? You said you plan to use college students to fill the gaps, but you would have to check your states laws if that is even allowed. Some states require all daycare providers to have some sort of licensing.

I would recommend starting with in-home services at first and see how it goes. You can confine the dog to an area where there will not be any contact with the kids.

If you are set on buying this duplex building and doing something kid-related with the other side, maybe open a drop in playgroup. Something for rainy days, homeschoolers, SAHPs, Nannies, etc. You can have a coffee station, snacks, story time, craft time, and sell punch cards for visits. Change out the toys and stations, etc. Provide a changing area, comfortable seating for nursing moms, etc. You wouldn't have to worry about state ratios because the parents would supervise their own kids, then you could hire a college student to lead various group activities, or act as a mother's helper.

ETA Option: You can also talk to the other facility on the other side of town about opening another location on your side. Think of a franchise model. They have already done the leg work and know the ins and out, plus pricing. Figure out how to use their knowledge and expertise instead of trying to recreate the wheel.

PoutineLover · « **Reply #21 on:** February 28, 2018, 07:56:43 AM »

I used to work at a drop in childcare centre at a gym, which also served the grocery store in the same building. Some days we were crazy busy, other days we had 1 or no kids. I think that's a big risk you'll have, especially since the number of children per adult is limited. We had some paperwork to fill out for each child and most of our customers were regulars.
It is a pretty cool idea, and you might also want to consider being open late evenings for date night babysitting as well. You could probably charge a premium for that. And having an online or app based booking system so people can reserve a spot, with additional drop ins allowed if there's room. That would make your staffing easier to plan.

Proud Foot · « **Reply #22 on:** March 02, 2018, 09:31:50 AM »

I like the ideas others have mentioned about having a way to schedule or have a live number of openings on your website. Something that might help smooth out your income and encourage parents to use it more would be to have a minimal monthly fee. Target it specifically to stay at home parents and you could limit specific parts of the day to those parents. Keeping a monthly fee could also help out with consistency and minimize the repetition of paperwork.

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Author Topic: Drop-In Childcare (Read 3571 times)