Why Too Much Tech Is a Drain on Your Daycare's Profitability

There are two reasons ECE leaders get out of bed in the morning: to offer awesome child care to families with young kids and to be a source of community (and jobs) for teachers and staff.

Without one, you can’t have the other.

Today’s leading child care franchises know that if you can improve efficiency while advancing the customer experience, you can maintain healthy margins.

And luckily, there is a whole world of technology designed to help you reach those goals. But before you go signing up for every shiny new tool, beware. Because while the right child care technology can absolutely be used as a force for good, too much tech can drain your profitability.

We know. It’s a minefield. 💣

In this article, we’ll help you break down what profitable child care provision actually looks like and how you can assemble a balanced tech stack for a more streamlined and profitable child care business.

Sound good? Let’s go!

Want to see what MomentPath can do for you? Schedule a free, no strings attached demo and find out how easy it can be to keep your child care business in the green.

Here’s what we’ll cover

The Profitability of Daycare Centers: What should a profitable child care business look like?

How to balance child care tech tools with profitability (and win)

• Don’t become a tech hoarder 
• Don’t give your teachers more than they can chew
• Never lose sight of your tech stack ROI 
• Don’t confuse your clients

Slim down tech to scale up daycare profitability

A quick note before we get started: While we occasionally use the term ‘daycare’ in this article to reach readers who may be searching for help using this term, we know that this word doesn’t always do justice to the massive impact teachers and child care professionals make each and every day in the classroom.

For more on where we stand with this topic, feel free to check out our article Child Care vs. Daycare: 12 ECE Experts on Why Words Matter.

The Profitability of Daycare Centers: What should a profitable child care business look like?

According to a recent Grand View Research report the US Child Care Market is set to grow from $18B in 2020 to a whopping $73.8B in 2027 (and yes, the report was published post-Covid). 

The report attributes this astronomical profit prediction to increased child care demand, new government measures, and service providers’ awesome growth strategies (hats off to you! 👏🏼).

And although there are obvious challenges facing the early childhood education industry, the report shows that technology is the ultimate catalyst for growth.

✨You heard it here first: there is light at the end of the tunnel. ✨

So, what does your child care business need to join the ranks of the most profitable companies come 2027? Two things:

1. A focus on growth strategies. 

💡Need inspiration? Check out how Lightbridge Academy aced their growth plans during the pandemic.

2. The right tech—and the right balance of tech.

💡Need inspiration? Read on…

How to balance child care tech tools with profitability (and win)

When it comes to choosing the right tech for your child care business, there’s a whole lot to consider—from how much time it takes to set up and roll out, to how well it integrates with existing systems. 

But the most important factor is how the tools you choose affect daycare profitability.

Here are a few profitability markers to think about when choosing new tech tools for your child care business:

• Outgoings: How much does the tool(s) cost?
  

• Productivity: How much time would it save your team?
  

• Brand awareness: How might it affect your brand/family engagement?
  

• Company culture: Could it boost the morale of your employees/families? How?

• Return on investment: Can you easily identify the ROI on this tool?

If you’re still unsure how much tech is too much, here are a few crucial do’s and don’ts to put you firmly on the road to success.

#1— Don’t become a tech hoarder 

There are approximately a million and one tech options for every child care function—but do you really need that many tools in your life?

Answer: No, you do not. 🚫

We get it. The temptation to replace outdated systems with sparkly new tools is hard to resist—but remember, the more you shove into your toolbox, the harder it’ll be to organize.

Instead, take your time choosing the right tool.

Ben Blake, CIO of Lightbridge Academy explains how he whittled down their burgeoning tech stack in favor of an all-in-one child care management tool, “I worked with Lightbridge to gather over a hundred and ten requirements detailing our needs in that space… We canvassed the market and looked at many, many different applications out there. We compared those to that set of requirements and narrowed it down to five different solutions.”

Let’s break this tech selection process down:

1. Figure out which functions your tool needs to cover—these are your must-have requirements.
2. Check out the available child care management system options on the market.
3. Compare them with your can’t-miss requirements.
4. Narrow the options down to your top five before drilling even deeper.

DO: Look for one tool that hits as many of your requirements as possible.

#2— Don’t give your teachers more than they can chew

It’s no secret teachers are having a tough time.

In fact, a study from the American Federation of Teachers found that educators have twice as much work stress as the average US employee—and that was before Covid hit.

Teachers have enough to do, so give them a break by cutting down the amount of tech they need to log in and out of. Choose as few tools as you can—preferably an all-in-one tool that integrates with your other systems. 😉

Simple.

DO: Give your teachers a break by finding one central tool to keep everything organized. 

#3— Never lose sight of your tech stack ROI

Successful ECE businesses need to focus 100% on investments that pay back fast. 

That’s why you need to get your ROI figures straight before hitting ‘sign me up’. 

Here’s a quick example of how to work out your ROI on a smart parent engagement tool:

First off, say your average annual revenue per child is $3,000, and the average number of children per family is 2 (this is your potential revenue per family).

$3,000 x 2 = $6,000 per year

With a child care management tool that costs just $3 per child, per month ($156 per year), you could double your revenue and almost 20X your investment. That’s an ROI of 1923% for just one child.

Sounds like a no-brainer to us.

Want to know more about calculating the ROI on your child care management tool? Check out Child Care Management Software: 4 Simple Steps to Calculate the Real ROI.

DO: Take time to figure out whether your new tool is worth investing in before you sign up.

#4— Don’t confuse your clients

The world is a confusing place right now, and more than ever people want stability and familiarity.

That’s why brand consistency is SO important. In fact, it’s been proven to increase revenue by 33% and reduce employee turnover by 28%.

In other words, brand consistency = brand resilience.

To build unbeatable brand consistency, make sure your unique child care philosophy comes through loud and clear in every stakeholder interaction—whether it’s what your parents and teachers see, hear, feel or do.

Here’s how it works:

• See: Make sure all your images and logos are the same across all your channels.
  

• Hear: Roll out consistent messaging to employees, franchise stakeholders and families.
  

• Feel: Build a brand culture that resonates through every part of your business.
  

• Do: Find a child care management tool that seamlessly integrates with your favorite systems, so that every time a parent or stakeholder makes an important move—from paying tuition fees to connecting with teachers—your brand seizes the opportunity to shine.
  

• Bonus tip—Focus on digital: With 1M+ millennials becoming moms every year and millennial tech usage growing daily, going digital pays. ECE pro Dr Erica Vernold Miller explains, “ECE parents, like most consumers, desire—and in the current situation, require—learning/communication/enrollment/payment, etc. to happen online. Some schools have resisted embracing technology… but unfortunately, they no longer have the luxury of doing so.”

DO: Follow the see, hear, feel and do checklist to make sure your brand consistency is always on point.

Slim down your tech stack to scale up your child care profitability

Striking the perfect balance with technology should be top of the agenda for futureproofing your child care business. Get it right, and you can expect a boost in productivity, brand consistency and above all, profitability.

Here’s a final rundown of how to ace that balance: 

• Limit the number of tools you use to manage your child care business.
  

• Give your teachers a break with a central tech hub (no more digging up lost passwords or switching between multiple screens).
  

• Take time to understand the real ROI on your tech investments.
  

• Follow the see, hear, feel and do checklist to make sure your brand is always consistent.

Remember, there are many valid reasons why too much tech is often just too much to handle—so make life easy for your employees and families and focus on providing the right experience with the right tools. From there, the profitability will follow.