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  #1  
Old 03-20-2019, 09:48 PM
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DaddyDaycare DaddyDaycare is offline
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Default Desperately in Need of Honest Opinions (Starting Daycare in CA)

Hello everyone,

I am thinking about opening a new daycare in Irvine, CA specializing in Mandarin-immersion. However, I am not sure it makes financial sense for someone in my income bracket. I am looking for honest feedback and advice: how feasible is it to make $150K-$200K/year as an owner/operator of a small to mid-sized daycare center?

About Me:
- New father! (I'm 35, my daughter is 4 months old)
- Extensive corporate business experience (MBA from USC, working in tech industry, ~$150K annual income)
- Zero experience in daycare or early childhood development

My Story:
- My wife and I are Chinese, but are both born and raised here
- We both speak fluent Mandarin but cannot read or write
- We want our daughter to learn Mandarin, but are very concerned that we won't be able to provide the same environment we had growing up (Our parents only speak Mandarin; We only speak Mandarin *to* our parents)
- We are also concerned about the cost of sending a SECOND child to this super expensive daycare

My Idea:
- Mandarin Immersion Daycare Center for Ages 2-6
- I believe there is growing demand, not only from second generation immigrants such as myself, but also from non-Chinese parents or mixed-race parents. There is a large Asian-American population in Irvine, as well as Fortune 500 companies and high disposable income.
- There is only one competitor nearby (LePort) with 1-2 year wait list, tuition is ~2300/month
- We visited 6-7 other daycare centers in our area (not language specific) and all had lengthy wait lists as well

My Dilemma:
- I'm great at what I currently do, while daycare is an unknown. It'd at least take time to complete ECD courses and gain experience.
- I have my wife's full support, and we will be OK financially even if we forego my salary
- I currently make ~150K/year and believe I can ultimately clear $200K/year. Our current quality of life is great and money isn't a concern as long as we don't do something stupid like maybe leaving a good paying job to start a business I have no experience in

Money isn't my main motive as I'd love to do something a bit more fulfilling. However, I would be leaving behind a good career and stable income. There is a ton of work ahead if I choose this route and it should at least make financial sense.

What is the likelihood that I will be able to make a similar amount of money

Most of my research doesn't give me enough details - IE national averages doesn't consider California's higher pricing and wages. I am looking at a daycare center and not an at home one, and this would be positioned as a mid-to-premium daycare with the rare focus on Mandarin-immersion.

If you have made is this far, thank you!
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  #2  
Old 03-21-2019, 12:34 AM
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Michael Michael is online now
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Welcome to the forum. I used to live in Laguna Beach. If there is anyplace in California that can earn a good income in childcare, its Orange County. Although I'm not sure a small center will make you $200k a year. We have had many providers from that area. Maybe some will chime in in the morning.
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  #3  
Old 03-21-2019, 07:39 AM
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Blackcat31 Blackcat31 is offline
 
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Quote:
Originally Posted by DaddyDaycare View Post
Hello everyone,

I am thinking about opening a new daycare in Irvine, CA specializing in Mandarin-immersion. However, I am not sure it makes financial sense for someone in my income bracket. I am looking for honest feedback and advice: how feasible is it to make $150K-$200K/year as an owner/operator of a small to mid-sized daycare center?

About Me:
- New father! (I'm 35, my daughter is 4 months old)
- Extensive corporate business experience (MBA from USC, working in tech industry, ~$150K annual income)
- Zero experience in daycare or early childhood development

My Story:
- My wife and I are Chinese, but are both born and raised here
- We both speak fluent Mandarin but cannot read or write
- We want our daughter to learn Mandarin, but are very concerned that we won't be able to provide the same environment we had growing up (Our parents only speak Mandarin; We only speak Mandarin *to* our parents)
- We are also concerned about the cost of sending a SECOND child to this super expensive daycare

My Idea:
- Mandarin Immersion Daycare Center for Ages 2-6
- I believe there is growing demand, not only from second generation immigrants such as myself, but also from non-Chinese parents or mixed-race parents. There is a large Asian-American population in Irvine, as well as Fortune 500 companies and high disposable income.
- There is only one competitor nearby (LePort) with 1-2 year wait list, tuition is ~2300/month
- We visited 6-7 other daycare centers in our area (not language specific) and all had lengthy wait lists as well

My Dilemma:
- I'm great at what I currently do, while daycare is an unknown. It'd at least take time to complete ECD courses and gain experience.
- I have my wife's full support, and we will be OK financially even if we forego my salary
- I currently make ~150K/year and believe I can ultimately clear $200K/year. Our current quality of life is great and money isn't a concern as long as we don't do something stupid like maybe leaving a good paying job to start a business I have no experience in

Money isn't my main motive as I'd love to do something a bit more fulfilling. However, I would be leaving behind a good career and stable income. There is a ton of work ahead if I choose this route and it should at least make financial sense.

What is the likelihood that I will be able to make a similar amount of money

Most of my research doesn't give me enough details - IE national averages doesn't consider California's higher pricing and wages. I am looking at a daycare center and not an at home one, and this would be positioned as a mid-to-premium daycare with the rare focus on Mandarin-immersion.

If you have made is this far, thank you!
I have zero advice as I am way across the country in MN so I know nothing about child care needs in CA but I did notice these two statements in your post (red text above) and wanted to ask if you knew if the lengthy waitlists were for infants (as your daughter is under 12 months) or if the waitlists were for all ages?

In most areas of the country, infant care is in HIGH demand and waitlists of 2 or more years is not unheard of (even in my very rural area) but spaces for those children in the 2-4 yr age range varies whereas there are multiple providers in my state with empty spaces for that age that they are unable to fill so I am just wanting to mention that in case you didn't research or mention that the waitlists were age specific.
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  #4  
Old 03-21-2019, 10:23 AM
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LittleExplorers LittleExplorers is online now
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I am not familiar with your area, but If a center could clear that kind of income, there would likely be more of them. The over head tends to be quite high and getting quality staff to stick around is tough. The center nearest to me is always advertising preschool openings as well as staff openings. This is an area with very little centers around.

If you can really go without your income, can you take a short term leave of absence and work in a center to see if you enjoy it or possibly work second shift part-time? I know that is different from owning one, but would give you an idea of the ins and outs. I came from a corporate position and opened my inhome daycare. It is vastly different. I know it's not the same as a center, but it was a huge adjustment.
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  #5  
Old 03-21-2019, 02:17 PM
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DaddyDaycare DaddyDaycare is offline
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Location: California
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Quote:
Originally Posted by Michael View Post
Welcome to the forum. I used to live in Laguna Beach. If there is anyplace in California that can earn a good income in childcare, its Orange County. Although I'm not sure a small center will make you $200k a year. We have had many providers from that area. Maybe some will chime in in the morning.
Thank you for the reply and for this forum filled with great knowledge. Reading through the threads gave me some really great insights into the day to day challenges of running a daycare that I had not thought of!

Yes, where we live is affluent enough that I didn't think looking at national averages would be a fair apples to apples comparison. I have been researching daycares in Silicon Valley instead to get a better feel for potential market.

Quote:
Originally Posted by Blackcat31 View Post
I have zero advice as I am way across the country in MN so I know nothing about child care needs in CA but I did notice these two statements in your post (red text above) and wanted to ask if you knew if the lengthy waitlists were for infants (as your daughter is under 12 months) or if the waitlists were for all ages?

In most areas of the country, infant care is in HIGH demand and waitlists of 2 or more years is not unheard of (even in my very rural area) but spaces for those children in the 2-4 yr age range varies whereas there are multiple providers in my state with empty spaces for that age that they are unable to fill so I am just wanting to mention that in case you didn't research or mention that the waitlists were age specific.
This is a very good point, and one that I had not considered but will certainty look into. I think the language offer will be unique enough and I *think* ~2 years is an ideal time for that type of immersion.

Quote:
Originally Posted by LittleExplorers View Post
I am not familiar with your area, but If a center could clear that kind of income, there would likely be more of them. The over head tends to be quite high and getting quality staff to stick around is tough. The center nearest to me is always advertising preschool openings as well as staff openings. This is an area with very little centers around.

If you can really go without your income, can you take a short term leave of absence and work in a center to see if you enjoy it or possibly work second shift part-time? I know that is different from owning one, but would give you an idea of the ins and outs. I came from a corporate position and opened my inhome daycare. It is vastly different. I know it's not the same as a center, but it was a huge adjustment.
Yes, it always comes back to "Well, if there's a need, why aren't more people doing it?" My uneducated guess is that it is hard work, and not for everyone. I am also hoping that my previous business experience will give me some operational advantages.

Getting quality teachers with Mandarin fluency will be the toughest thing to do. I think a lot of these teachers will be fairly "old school" and may not buy into newer, more progressive concepts for child development. That's a potential conflict that I'm, aware of... I believe this may be the bottleneck.

I have considered working at a daycare, but it feels disingenuous to work for someone's daycare with the intent to one day be their competitor.

Unfortunately, the field I am in (analytics) is so fast moving that a few years away would put me at a disadvantage trying to get back into the corporate world.

Thanks again to everyone who has responded. It is not a decision I take lightly. Not for my family, and not for the many families that I would ultimately be responsible for.
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  #6  
Old 03-21-2019, 03:17 PM
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Blackcat31 Blackcat31 is offline
 
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Quote:
Originally Posted by DaddyDaycare View Post
I have considered working at a daycare, but it feels disingenuous to work for someone's daycare with the intent to one day be their competitor.
Not necessarily. I hired a girl I knew full well was planning on opening her own child care. I don't view others as competition as child care is an ever changing world so there is a right fit for every parent and family. But I did know ahead of time that she was simply working to gain experience and knowledge of the inner workings of owning a child care so I don't feel slighted or fooled by her quest for employment.

So, with that said you could consider volunteering at a child care center....perhaps offer language lessons to centers or programs that don't offer it or volunteer to be a chaperon on field trip days. Or you could simply work in a child care and share with the owners etc that you are looking for first hand knowledge of the field. Planning on opening your own daycare wouldn't be viewed as competition if you are transparent from the get go. Know what I mean?

It's definitely not a super high income profession but it's rewarding ways many high paying jobs are not. It's definitely something each person must weigh carefully as to how it works for them, individually.

Good luck in your plans!!
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  #7  
Old 04-17-2019, 02:11 AM
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Vanka Vanka is offline
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One thing I would like to draw your attention to, is that CA has specific requirements for who can be a director or a teacher at a large day care center (outside your home).
You say you have 0 background in EC. That means you can't be a director and you would need to hire someone qualified to be a director at your center. That means paying salary to that person before you get paid yourself
In home day care providers do not have this qualification requirements, but you can care for less kids. If you are on your year 1 it's 4 infants. You already have a daughter, which means you can take only 3 more. So unless you find 3 people who would pay you 50k annually, I say your estimates are unrealistic.
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  #8  
Old 04-22-2019, 12:48 PM
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TwinKristi TwinKristi is offline
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I think this is possible for a large family daycare, but you would have to work up to it. You’d need your small daycare license for 1 year and then you’d need a FT assistant when you go large. I would say you could clear (before taxes and expenses) $900-1000/day in tuition once you’re full, maybe more depending on your area.
So if you have 22 days in a month on average that’s over $250,000 BEFORE taxes, expenses, employee costs... that’s why a lot of husband/wife teams exist. No payroll! LOL
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  #9  
Old 04-22-2019, 12:51 PM
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TwinKristi TwinKristi is offline
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Quote:
Originally Posted by Vanka View Post
One thing I would like to draw your attention to, is that CA has specific requirements for who can be a director or a teacher at a large day care center (outside your home).
You say you have 0 background in EC. That means you can't be a director and you would need to hire someone qualified to be a director at your center. That means paying salary to that person before you get paid yourself
In home day care providers do not have this qualification requirements, but you can care for less kids. If you are on your year 1 it's 4 infants. You already have a daughter, which means you can take only 3 more. So unless you find 3 people who would pay you 50k annually, I say your estimates are unrealistic.
Yeah but he may be able to find 2 other infant families and 3 toddler families to pay a normal tuition of less than $17,000 and that times 5 is $85,000/yr. after 1 yr he can go large and over double that.
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  #10  
Old 04-22-2019, 01:13 PM
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DaddyDaycare DaddyDaycare is offline
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Quote:
Originally Posted by Vanka View Post
One thing I would like to draw your attention to, is that CA has specific requirements for who can be a director or a teacher at a large day care center (outside your home).
Thanks for responding! You're spot on: it'd take me 4 years of experience to become a director, so unless I found a suitable partner the ramp up time is simply too long. (My home isn't an option due to zoning)

http://www.cdss.ca.gov/Portals/9/CCL...-16-143049-453

For those who come after me, I approached this in 4 steps:

1. Timelines & Milestones

- This is where my research of the process found out about the director / site admin requirements
- If I started the process today, how long before the daycare is up and running and what are the major milestones along the way?
- How long does it take to build out a daycare from an empty commercial building?
- At what stage should I apply for permit? How to juggle lease agreement w/o license and vice versa?
- What can be done concurrently vs must be done consecutively?

2. Customer Surveys

- Main assumption: if I could magically have a daycare approved and ready tomorrow, it'd fill up without issue due to significant existing demand
- Is this a realistic assumption? What might go wrong or make my day care undesirable?
- How do parents choose daycares and what do they value? (Price, Hours, Location, Curriculum/Philosophy, Reputation/Brand, Teacher/Child Ratio, etc)
-Where does language immersion fit into the overall picture?

3. Financial feasibility

- Cost to start up (capital requirements, tenant improvements)
- Operating P&L (estimated gross using teacher/aide to toddler ratios and indoor/outdoor SF requirements)

4. Partner Compatibility
- List of questions for potential partner to figure out if a long term partnership makes sense
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