Increasing revenue can be a challenge for any business, especially during a pandemic. Childcare centers across the country have been hit hard and are struggling to navigate the reopening process while maintaining enrollment and increasing revenue. With help from childcare industry experts, we’ve compiled a list of considerations and ideas to take into account when looking to improve your childcare center. This could range from reassessing current business practices to offering new programs or expanding marketing efforts. By implementing these ideas, you can improve your center, increase revenue, and weather this economic downturn.

In a recent webinar, Kathy Ligon, CEO and Founder of HINGE Early Education Brokers, joined us to discuss creating opportunities for your childcare center. To begin, she offered a recommended breakdown of your center’s finances in a healthy and normal environment:

  • Ideal Occupancy: 70-90% 
  • Staff costs: 50-55% of your income
  • Operating costs: 11-13% of your income
  • Facility costs: 22-25% of your income
  • Admin costs: 2-4% of your income
  • Profit: 15-30% of your income

Use this breakdown as a reference when implementing changes to your childcare center. Again, these are recommendations based on normal circumstances, so don’t get discouraged if your center doesn’t meet these percentages. With this outline in mind, let’s get started on how to improve your center and increase revenue. 

1. Reassess and Redefine Your Budget

Building or redefining your budget can help alleviate financial stress by having a clear overview of your center’s cash flow. There’s a variety of tools available to help you outline your income and expenses. This will allow you to make informed decisions on where to allocate your spending. This Kanagrootime blog post outlines important considerations when building a budget along with helpful tools and resources. Reassessing and redefining your budget will not only help you see where you can save money, but also where you can reinvest it in other projects to grow your center. 

2. Take Advantage of Grants and Subsidies

The COVID-19 pandemic has caused financial strain on businesses all over the country. Because of this, there are a variety of grants and emergency funds available to help ease the financial burden on businesses. Child Care Aware has pulled together a list of resources for centers that may be struggling financially because of COVID-19. Additionally, there are subsidy programs your center can get involved in to alleviate certain costs such as the USDA Food program and the Head Start program. These grants will save your center money and reduce financial stress so you can focus more on rebuilding your center. 

For additional resources on the grants and subsidies mentioned, see out the links below. 

Office of Child Care: Resources for Providers 

Think Small: Grants and Financial Opportunities

USA Grant Applications: Grants and Financial Opportunities

Child Care & Development Block Grant

USDA Food Program

Head Start – Early Childhood Learning & Knowledge Center

3. Increase Tuition Rates

Increasing tuition rates can be a sensitive and difficult topic to approach. Although parents will expect a tuition increase year over year, they won’t always know what amount to expect and need to be conscious of what they’re being charged. However, Kathy Ligon advises, “Now is the time to be very very bold in your tuition rates. It is not the time to act in fear. It is the time to set your tuition rates where they need to be.” Sometimes centers offer higher quality services than what they’re charging for, so make sure you know your worth and charge what’s fair. When approaching this subject, you can be as transparent as possible and let parents know why you need to charge more and how you’re trying to offset costs. For example, to lessen the tuition increase you can explain to parents that certain discounts will be reduced or no longer available. You could also ask parents to provide their children with their own food to alleviate the spread of germs and reduce costs for your center. Being honest will give parents more confidence in your center as well as more incentive to be receptive to these changes since they do want to continue being a part of your center.

 4. Offer New Programs

A good way to increase revenue is to increase your program offerings. Most commonly, centers are expanding to offer a Kindergarten or afterschool program. This makes your center appeal to a wider range of families as you offer additional support and services. Parents are looking for safe and healthy ways to send their children back to school so doing so in a more controlled environment could be a huge selling point. If these types of programs don’t seem feasible for your center, there are smaller support options your center can offer as outlined below. 

5. Offer Distance Learning Support

Parents are having to navigate both working from home and homeschooling. Many have struggled with a lack of childcare and are eager to put their kids back in your care. Offering additional support to these families can help increase your revenue while alleviating the stress on parents. Many childcare centers are beginning to offer educational and emotional support for children involved in distance learning. This could include a mix of daily care, after school programs, tutoring, relaxation, playtime, etc. A distance learning support program can be a successful way to increase revenue for your center without having to expend additional resources. 

6. Invest in a CCMS

Implementing a Childcare Management System  (CCMS) will help save your center time and money. This software will be able to automate and simplify processes that take you or your staff hours every week including billing, payroll, scheduling, daily notes, etc. With a CCMS, you’ll spend less on administrative costs like paper supplies and won’t need to schedule staff to cover time consuming tasks like billing and invoicing. Many software programs also come with parent connectivity, increasing the quality of your center and appealing to more families. For an overview of how Kangarootime can help improve your childcare center, see our case study with Magic Memories Early Learning Schools here.

7. Improve Your Marketing Techniques 

Marketing has changed over the years and has become increasingly affordable and accessible. Social media is a popular and free way to promote upcoming events, promotions, daily activities, and news about your center. When it comes to Facebook alone, surveys show that 83% of consumers use the platform and 66% of those consumers follow a brand. (Sprout Social) There is huge value in improving your social media presence as it allows you to reach a wide range of people and showcase your center. Other marketing techniques could include paid social media advertising, Google Ads, email marketing, or direct mail. By taking advantage of these marketing opportunities, you can get your center recognized by more families leading to higher enrollment and more revenue for your business. For additional marketing tips, see this webinar here by Chris and Jenna from Parkway Digital. 

By implementing some or all of these changes, you’re setting your center up for success. Although these times are challenging, there are ways to use the circumstances to your advantage and prepare your center for a better future. 


Kangarootime is the leading all-in-one childcare management software for daycares and preschools. With billing and invoicing capabilities, parent communication and staff management tools and classroom automation, Kangarootime helps childcare centers grow and scale. To learn more about optimizing your center with Kangarootime, visit kangarootime.com

Marissa Schneggenburger

Author Marissa Schneggenburger

More posts by Marissa Schneggenburger

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