Revenue Growth Ideas For The Daycare and Childcare Industry

The pandemic was not kind to the childcare industry. The ripple effect that came from the widespread capacity limits and closures of facilities essentially crippled an already hurting service sector. In this article, we will look at how severe the damage was from COVID-19 on service providers and revenue streams and review growth strategies that can assist in bringing the market back into shape.

COVID-19 And Childcare – By The Numbers

According to Demanding Change/Repairing Our Child Care System, a report recently released by Child Care Aware of America, a total of 8,889 licensed childcare centers and 6,957 licensed family childcare home daycares closed permanently across the US. The report states these closures occurred between December 2019 and March 2021. 

Most disturbing about these statistics is that a shortage of childcare services existed before the pandemic caught the country. At the time, a total of 51 percent of young children in the US lived in regions identified as childcare deserts. A childcare desert is a community or region with few or no childcare services. 

Post-Pandemic Problems

Although more childcare centers opened for business soon after the pandemic peak had passed and ease of protocols, enrollment levels have not reached pre-COVID totals. Much of this can be attributed to parents either finding alternate care for their children or are hesitant to let them return with the fear of future closures resulting from COVID variants gaining momentum. Other causes are parents have become comfortable with working from home and providing care for their children and neighbors pooling resources so they can share a caregiver.

Child Care Revenue – How COVID-19 Hurt

When the pandemic hit, about one-third, or 300,000, childcare professionals lost their jobs. To date, all but around 125,000 have returned to the industry. However, according to the Childcare Benchmark Report, 41 percent of childcare centers state they recorded a drop in revenue. 

However, they opened in the last half of 2021. With growth projections aiming skyward for the next few years, the lack of childcare providers will cause some issues. Without adequate staffing, many childcare centers will encounter problems with providing enough room for the additional children projections are suggesting will require these services in the next few years.

What Makes Childcare Services Important

US lawmakers learned two things during the pandemic related to childcare. First, without childcare services, other employees cannot go to work. As a result, this makes childcare workers an essential service. Second, revenue decreased with fewer children attending childcare facilities. The pandemic created a dire financial situation in the childcare industry, compounding its already fragile state in pre-COVID. 

US Congress enacted the American Rescue and Relief Plan (ARRP) from these realizations. The plan provides childcare stabilization grants totaling $24 billion and feeds the Child Care and Development Fund an additional $15 billion. This history-making move expects to bring the childcare industry back to life, removing it from life support as it enters a rapid growth trend.

Strategies For Revenue Growth

So, what strategies will bolster revenue in an already fragile industry? Three identifiable main priorities by childcare service providers as key to success in 2022 and beyond. They include:

Customer Satisfaction

The old saying goes that a happy customer is a repeat customer. Providing childcare that makes parents and caregivers pleased with their service translates into repeat business, referrals, positive reviews, and additional spin-offs that enhance a revenue stream.

Employee Retention

Without employees, childcare services become severely cut. Employee retention goes far beyond the need for fair and equitable income. It includes benefits ranging from healthcare to educational opportunities to keep employees thoroughly trained and capable on the job.


You can have the best facility and the best employees working at that facility. However, if the programming provided has little substance, everything else does not matter. As a result, this is why childcare services must offer programming that enhances growth and development.

Revenue Growth Strategies For 2022

So far this year, childcare service providers in the US have chosen four strategies to increase revenue. They are innovative and unique and are as follows:

Price Increase

Of the childcare providers surveyed for the Childcare Benchmark Report, 57 percent indicated they were seriously considering updating their pricing structure to include an increase. As a result, this is the top revenue strategy identified.

Additional Products and Services

A total of 21 percent of childcare centers in the US are either in the process of or have completed adding new products and services. These include various things ranging from before and after school care to other childcare-related services.


As 51 percent of childcare-aged children live in childcare deserts – regions with few or no childcare services – 17 percent of existing service providers are looking at expanding into areas that are currently underserved. As a result, this would also address future growth demands. 


A total of 11 percent of childcare providers are looking at this year as the time to seek new business locations. Maybe there has been an increase in competition in some areas, and considering there is such a demand for childcare, a move to a place with more demand may help.

Risks In 2022 To Childcare Services

There are also many risks to increasing revenue streams. For example, childcare service providers surveyed identified seven main risks. They include financial (the cost of doing business), labor (attracting and retaining employees), operational, liquidity, regulatory (rules and regulations governing the industry), reputational (integrity threats, rumors, bad reviews on social media), and macroeconomics. 

Final Thoughts

Bouncing back from the damage sustained by the pandemic has not been easy for the childcare industry. However, it was already in trouble before COVID-19 kicked it when it was down. In addition, this has led to innovation to address the growing demand for quality childcare services. 

Revenue growth strategies and in 2022, many new ideas have introduced childcare services back on track for the future.

Sandra Chiu works as Director at LadyBug & Friends Daycare and Preschool.

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