If you are currently weighing options and trying to decide if you should shut down your daycare or preschool, here a few important questions to ask yourself:
1. How long have you need in business and are you profitable?
The general rule is that if you had a business for 5 years and have not, at least, broken even then you should close up shop. However, if you recently opened your child care center or preschool, and are having a hard time getting the word out to prospective parents, then what you need is child care marketing. Here are the top 5 online marketing strategies for child care providers, and don’t forget to create your free profile on CareLuLu to get parent referrals.
2. Is there still a need for child care in your area?
When you started your business, you likely saw a need for quality child care in your area. However, over time, demographics change. Are there still a lot of working parents with young children? Or are you in a market which is now mostly composed of college kids or retirees? The NEED for your child care services is key to your success, of course. If you initially made money but have gone an extended period of time without turning a profit, then it might be a sign that market conditions might have changed.
3. How much time are you investing in your child care or preschool program?
Hard work is, of course, essential to running a successful business. However, working nonstop, spending all your evenings and weekends trying to keep your home daycare going, or lying awake at night trying to devise ways to save it are all emotionally and physically taxing. So, work hard but don’t put your own well-being on the line. If you can’t run your business and achieve a (somewhat) balanced personal life, then you may need to re-assess your priorities.
4. Can you cut costs in your preschool?
Do you have an assistant or a cleaning service? Do you spend excessive amounts of money on supplies? Are you serving meals that are outrageously overpriced for your children? Take a look at your monthly costs and see what you can cut while still running a quality early childhood education program.
5. Have you collected past due payments?
If you have parents who are past due and owe you money, then you need to collect it NOW! Perhaps you have been trying to show kindness and compassion because they are struggling. Maybe you are not as assertive as you should be with these issues. Whatever the case may be, allowing people not to pay is allowing them to take advantage of you. When you are facing closing your business, you can’t afford to let anyone off easy with payments.
6. Are you still motivated to make your child care business work?
This is a huge factor. You cannot run a successful business if you are not motivated, interested and engaged. If your business is suffering, there can be a sense of dread when walking into work each day. The anxiety of trying to figure out how to pay the bills and keep the business alive can easily suck the joy and fulfillment out of business ownership. A child care facility with a lackluster owner who would rather be at home in bed will not succeed. It may be time to jump ship.
Again, deciding whether or not to close your daycare is something that you’ll need to decide on your own. No one can tell you for sure what the right thing to do is. However, if you’ve been suffering mentally, physically, and/or financially for a long period of time, you may need to reassess if your child care business is worth it. If and when you decide that it is time to close please read this information from the IRS to make sure you handle it appropriately and legally.