Child-care centers fight high turnover, low margins

Anyone who thinks the child-care business is a big money maker had best think again, according to local child-care providers.

While care is not cheap, neither is the cost of doing business. The result is profit margins that, in most cases, range from slim to none.

Most people stay in the child-care business because they love children and love what they do, according to Laura Lockwood, director of Joyland Learning Center at 1301 N. Boonville. "It's hard to make any money in child care," she said.

Joyland has been in operation since 1974. Lockwood attributes good leadership and staff for the longevity of the center that cares for 117 children ages 2-5 with a staff of 25 people.

The center is affiliated with Central Assembly of God Church. As a result, it benefits from lower rent on its facility, helping it stay within budget.

The child-care industry is not a high profit business, Lockwood said.

People sometimes go into it because they perceive a high income, but they often fail to take into account the expenses involved.

"In my experience it is usually a break-even situation," Lockwood said.

Since going into business in 1996, Vickie Simpson and Ann Tucker, co-owners of A Touch of Nature, have found out first-hand that it is difficult to balance affordability with the need to maintain quality programs, Simpson said.

A Touch of Nature operates at two locations; one at 1446 E. Lark and the other at 622 S. Pickwick.

Fifty children are enrolled at the Lark Street location, while 30 children attend the programs at Pickwick. There are 16 to 18 employees to handle the work at both centers, which are always at capacity and have waiting lists.

"My goal is to provide what I want for my own children," Simpson said. She added that the business is stressful and exhausting, but also rewarding.

Simpson's two preschoolers are at the center daily, participating in the programs along with the other children.

When it comes to the cost of doing business, national operations often have an advantage in terms of deeper pockets and greater bargaining power for necessary purchases.

La Petite Academy, with approximately 750 centers nationwide, is one such operation.

Brenda Obeidat, director of La Petite in Springfield, said the franchise is a big help, with a support system in place, but the center still faces the same problems other local facilities do with the high staff turnover rate intrinsic to the business.

"It is difficult to find good staff," Obeidat said. "The pay is pretty low, and it is not easy to take care of small children."

The local La Petite is licensed for 121 children, which requires a staff of about 30 people, according to Obeidat.

The center takes infants as well as preschoolers. Infant care radically increases staffing requirements: a staff-to-children ratio of 1-to-4, as opposed to the 1-to-10 ratio for toddlers and older. Also, with infant care there are additional expenses for equipment and supplies.

Until recently there were two La Petite facilities in Springfield, one at 3540 S. Culpepper and one at 1714 S. Enterprise. The centers were recently combined at the Enterprise location.

"Culpepper never was profitable," Obeidat said.

Simpson noted that the child-care business is a constant financial struggle, adding that she and her partner sometimes fail to pay themselves to make ends meet for the business.

As for the industry as a whole, the situation may get worse in the future.

"There are many problems facing the industry today, not the least of which is universal (pre-kindergarten) programs which do not include the private sector," said Lynn White, director of the National Childcare Association.

Staffing shortages have caused some centers to close classrooms, White said. Also, "We are anticipating a hardening of the insurance market soon, and the bar is being raised on minimum licensing requirements," she said.

White pointed out that national centers have greater staying power, since they can absorb losses at individual centers because of their broader base.

They can also take advantage of buying in quantity to save on equipment and supplies. But they face the same problems finding qualified staff as independent local centers.

White said she believes some individuals jump into the business without a clear picture of all that's involved. The industry is difficult, she said, with a generally low profit margin.

"More effort and resources spent to educate the potential provider would be beneficial," she said.