Financial Sustainability

A successful child care program is one that meets the needs of families and is a safe place for children to learn and grow among other children and trusted adults. However, success also depends on business management practices that will ensure the program’s financial stability. 

  • Business Bank Account 

    Opening a separate bank account for your business may be necessary if you are in a partnership or corporation, but businesses of all structures and sizes can benefit from having a business bank account. A business bank account makes it possible for your business to accept credit card payments, keeps your business and personal income and expenses separate, projects a professional image, and helps to protect your personal identity. You may open your business bank account once you have a federal Employer Identification Number (EIN). (Learn how to apply for an EIN online.)  

    Talk to your personal bank, consult a small business financial advisor or research business bank accounts online to ensure that the banking option you choose meets the needs of your business. 

  • Grants 

    Many child care businesses need additional support to pay for start-up costs, necessary expansions and renovations, materials and supplies, playground equipment, or other significant expenses. It can be beneficial to look and apply for grants. A grant is an amount of money that is offered by a government or private entity for a particular purpose. It does not have to be repaid, but the business or person that receives the grant may need to meet specific eligibility, application and reporting requirements. If you decide to pursue grant funding to support your business, consider the following tips: 

    • Look at local and state opportunities first. You can ask your local Child Care Resource and Referral agency (CCR&R) or check sites like GrantWatch to see if grants are offered in your area that meet your needs.  
    • Conserve time and effort; make sure the grant you’re looking into truly meets your business needs and that you are eligible to apply. 
    • Make sure that your grant proposal is detailed, supported by data, and highlights the impact and value that the funding will bring to your community. Include an evidence-based budget. 
    • Prior to submitting your proposal, check your spelling, double check all calculations and make sure that you have included all the necessary components in your package of information. 

    The U.S. Small Business Administration (SBA) offers information on grants and financing opportunities for small businesses

  • Iron Triangle 

    The “iron triangle” of early care and education (ECE) finance identifies three goals that child care programs must reach to be financially sustainable. Each goal makes up one side of the triangle. The three sides of the triangle are: 

    • reach and maintain full enrollment
    • collect all fees in full and on time 
    • ensure that revenues cover the cost per child 

    Child care programs must do all these things to succeed. Learn more about the three sides of the triangle. The next three sections will provide strategies to help you reach the goals of the iron triangle. The strategies include reducing costs, saving time, automating enrollment and fee collection, and maintaining full enrollment in your program. 

  • Shared Services 

    Shared Services is a concept designed to help small child care businesses along the road to financial sustainability. Shared Services systems identify common needs among small child care programs and create ways for them to share staff, information and resources. This can look like a network of child care centers or family child care homes sharing the cost of a payroll service, curriculum coordinator, maintenance contractor or a human resources specialist that provides necessary services for each of their programs. The result of participation in Shared Services is that child care programs can save money, time and energy on many of the tasks that support their business. This frees up owners and staff to focus on their mission of providing quality care and education to children.  

    Ask your local CCR&R if there is a Shared Services Alliance in your state or area. You can also find a map of existing alliances through the Opportunities Exchange website. (Note: Shared Services Alliances do typically charge a fee to access the many network benefits.) If there is not a Shared Services Alliance or system already established in your area, there may still be opportunities to share resources. Talk to your local CCR&R, contact a local or state NAEYC affiliate, or reach out to other child care programs in your area to see if there is interest in creating a network to connect child care businesses that need similar services. 

  • Child Care Business Automation

    There are many day-to-day business management tasks that can take up precious time and energy from child care owners, directors, and staff. When businesses can find a way to automate some of those time-consuming administrative tasks, they are able to devote more time to supporting children and staff. Child Care Management Software (CCMS) systems are available to accomplish this goal. 

    There are a number of CCMS systems on the market, and many of them offer similar services:  

    • Managing a program’s enrollment and waitlist  
    • Easy attendance tracking 
    • Electronic payment collection and invoicing 
    • Monitoring classrooms daily to ensure proper ratios 
    • Keeping track of staff records and payroll  
    • Family engagement and communication, often through a parent portal or mobile app  

    Research different CCMS systems, talk to your local CCR&R agency and reach out to your child care provider association to learn more about software systems they may be familiar with or recommend. Be sure to compare a variety of programs to learn which one may best fit your program’s needs and budget.  


    FCC Tip: Many of the automation tools are geared toward child care centers, but there are options that have been designed with family child care in mind and others that offer simpler versions of their software with smart phone access.


    Comparison tools and websites are available online to help you find and evaluate CCMS systems. 

  • Marketing

    Child care businesses can benefit from marketing efforts even after they are open and operating. Maintaining a full program is one part of ensuring the financial success of your business. If you have not yet created a marketing plan, take time to make one. The plan should include marketing strategies you are currently using or plan to implement, the budget you need for each strategy, and how you will identify whether your strategies are working. Your marketing plan should include goals that you would like to meet and how often you will revisit each strategy to see if it is meeting the benchmarks you have set.   

Additional resources are available to Child Care Aware of America members! Learn more about CCAoA membership and how to sign up to get access to these resources and others. If you are a member click here to access the resources listed below.

Financial Sustainability for FCC

Financial Sustainability for Centers

Community Child Care Analysis for FCC

Community Child Care Analysis for Centers

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Military Families

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