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Sharing is one of the most important skills taught by early educators, so it’s ironic that the early education sector is just getting around to embracing sharing as a strategy to make small businesses more sustainable.
The latest Hunt Institute Early Efforts webinar, “Shared Services: Sharing Resources to Maximize Opportunities for Children and Families,” offered a glimpse of realistic solutions for early education entrepreneurs. The panel featured Louise Stoney of Opportunities Exchange (OppEx), Monique Reynolds of Quality Childcare for Children (QCC) and Paula Drew of the Wisconsin Early Childhood Association (WECA), with the Hunt Institute’s Lauren Zbyszinski, Ph.D., LLM, serving as moderator.
Here are our takeaways:
1. (Purchasing) power to the people! Shared services save money and time on expenses including:
Substitute teachers (which Drew referred to as the Relief Squad)
Fiscal management, including billing
Human resources (for both recruiting and retention)
Social services (also referred to as family support)
These supports, Stoney said, can help providers achieve what she called the Iron Triangle—staying full, collecting fees in full and understanding costs. Reynolds said her program, which supports providers in the state of Georgia, addresses the “whole business owner, making sure they have every single thing they need. We are not working in silos. We are working across the sector.” QCC alumni cohorts share services and staff, including an administrative assistant. Drew said that by banding together in negotiations with a credit card processor, WECA has been able to lower fees for providers.
2. Business skills count more than ever.According to Child Trends, about 30% of young children in early education settings attend home-based care and 12% attend center-based care. Both types of providers operate on extremely narrow profit margins. The webinar participants agreed that the typical entrepreneur who enters the field is a woman of color with a passion for teaching children, but not necessarily experience or expertise in bookkeeping, staffing and so on.
Unless we equip providers with the tools to run these businesses, Stoney argued, we’re setting them up for failure. In the comments section of the Zoom, Laura Kohn of Mission Driven Finance, a B Corp in San Diego, concurred: “As a field, we’ve been so focused on quality supports and completely shortchanged business and operations support.”
Reynolds provided one example: “We want all of our providers to be full enrollment.… Let’s start with just one classroom. Don’t open another class where you may have one or two children and it doesn’t cover the cost of the teacher. Our strategy is to say, ‘Let’s set up a waiting list, so when you get to a break-even number, then we open up the classroom.’”
3. Technology is getting better every day. Child care businesses can now be run from a smartphone or a tablet. Off-the-shelf child care management systems, Stoney explained, can cost nothing for the most basic versions, but most cost around $100 per month. These platforms can be tailored to a provider’s needs, and states are catching up, too, rethinking processes to automate things like billing and subsidies.
4. Networks strengthen individual providers. As WECA has expanded across the state of Wisconsin, the services it offers have also grown, and the network has become even more valuable to its members. Coaches, for example, help providers to understand business principles such as “Every policy has a financial implication.”
“State the policy, and the parents will fall in line,” she advised. Reynolds noted that her network amplifies provider voices so that not just the usual foundations, but also banks and other business, are joining efforts to preserve and expand child care in Georgia.
5. Power with beats power over. The partnerships that arise through shared services represent a shift in mindset, Stoney said. Instead of a dynamic where one entity has power over another—to monitor, to judge—this is about building one another up.
She added that there are lessons to be learned from co-op arrangements, though these legal structures, which involve profit sharing, may not always be appropriate (especially when there is no profit to share).
Stoney argued that the post-pandemic era represents an exciting opportunity “to deconstruct and reconstruct what it means to be a child care provider,” with potential for building systems that will foster reflective teachers and directors who aren’t constantly overwhelmed.
Early Learning Nation columnist Mark Swartz writes for and about nonprofit organizations. Author of the children's books Werner Herzog Eats His Shoe, Lost Flamingo, Magpie Bridge and The Giant of the Flood as well as a few novels, he lives in Takoma Park, MD, with his wife and two children.