This case examines how a professional couple remotely managing a preschool in South Florida achieved significant growth despite balancing other investments and family life. Initially, their primary challenge was managing the back-office demands of the preschool, all while striving to make the business self-sustaining and profitable.
Radius Childcare Solutions’ mission was to assist in the back-office operations and create a self-sustaining model that would not only keep the business alive but truly thrive.
The Challenge: Achieving Financial Stability and Growth
A professional couple with a close eye on the bottom line. Over 30 employees and 200 families depend on the care provided by our clients. The owners, extremely passionate about early childhood education, understood that the numbers had to make sense to justify staying in early education.
Navigating Payroll and Enrollment Fluctuations
Operating a daycare requires meticulous financial management, especially with fluctuating daycare costs and maintaining adequate enrichment programs. They recall the challenge of making payroll during periods of low enrollment or when parents were slow to pay, leading them to ask critical questions, such as “Are daycares profitable?” and “How do we make our preschool profitable?”
Addressing Marketing and Content Creation Challenges
Specific issues the owners faced included developing content for marketing ads, creating a solid marketing plan, and implementing a monthly close process to make decisions based on data—not hunches.
Time Constraints: Running a School and Raising a Family
All this, combined with the time constraints of running a school, a lack of expertise in marketing strategies for preschools, and raising two young children of their own, made it hard for them to focus their efforts on growing the business.
Maximizing Margins and Reinventing Revenue Strategies
Operating margins were decent, but for every dollar that came in, roughly nine cents was left to reinvest or go to the owners. Despite always having a waitlist, they needed an approach to increase preschool enrollment and ensure their time and money were efficiently invested.
The Radius Childcare Solution: A Dual Approach
From the start, we recommended a plan that tackled the issue on two fronts: income and expenses.
While our approach has been successful in other preschools, we customized it uniquely to this daycare’s needs and the local market. Our method combined innovative digital marketing strategies, community engagement, and precise cost management, allowing us to show a real path toward increasing preschool revenue.
Build a Resonant Brand and Effective Marketing Plan
Our first step was identifying the essence of their brand and crafting a marketing plan that resonated with both parents and staff.
Developing effective preschool advertising ideas allowed us to target their ideal customers, making every dollar spent on marketing work harder. Janel and Laura, Radius’s founders, brought their experience working with large multinational brands to the early education market, offering unique childcare marketing insights.
Streamline Financial Reporting
Our involvement extended to accounting, where we formalized the monthly close process to give timely financial insights. This change allowed Radius’s accounting team to deliver monthly financials in an engaging, actionable format, ensuring financial results were utilized rather than buried in emails.
Optimize Marketing and Accounting with Specialized Expertise
Radius’s approach paired the client with an accountant familiar with daycare software, specific credential requirements for early educators, and the importance of maintaining ratios. By consolidating marketing and accounting data, we provided a clear view of each marketing channel’s cost per acquisition and conversion rates, which is vital for any early-learning business looking to maximize profitability.
Data-Driven Insights for Efficient Advertising Spend
Through data, we identified advertising platforms with excessive costs, allowing for more refined solutions and better spending efficiency. For instance, we highlighted the weekly cost of processing billing versus monthly billing. With office staff focusing on higher-value tasks, this shift helped demonstrate how daycare software can improve overall administrative efficiency.
Reduce Overtime Costs to Boost Morale and Retain Staff
We also highlighted overtime expenses and their impact on the bottom line, which had previously strained a tight budget. Reduced overtime helped to improve morale while providing room to offer competitive wages, attracting dedicated staff members willing to drive long distances to be part of this team.
Tax Planning & Financial Guidance for Lasting Success
Radius also provided formal tax planning, analyzing strategies like rent vs. buy, accelerated depreciation, and owner compensation—all approaches that are typically reserved for high-net-worth clients.
Michael, Radius’s founder, brought extensive experience from the largest public accounting firm and his boutique tax and accounting practice to guide the owners on decisions critical for long-term financial stability, which is essential when determining how to start a daycare and make it profitable.
The Results: 38% Growth in Year 1 and Decade-Long Success
After a thorough market study and several iterations of marketing strategies, the preschool saw a 38% increase in income in Year 1 alone.
Over the past ten years, gross sales have risen by an average of 11% per year. Income has increased by 35%, allowing owners to offer wages up to 15% higher than competing childcare facilities and to offer additional benefits like health insurance.
More revenue meant better program offerings, increased staff retention, and, most importantly, greater satisfaction among parents and children. The staff also felt a real sense of accomplishment, knowing their hard work and dedication contributed to the preschool’s success.
One staff member noted, “Since partnering with Radius, morale has never been higher. The better the bottom line became, the better our program became.”
New Challenges: Tax Strategies, Expansion, & Program Growth
As their success grew, new challenges like higher tax obligations and the need for asset protection emerged. Radius advised the owners to buy their facility outright, utilize accelerated depreciation to offset tax liabilities and build a self-sustaining, customer-focused program.
Today, the school’s facilities have grown by 17% in square footage and have even expanded to a second location. Meanwhile, their classrooms are well-equipped with the latest furniture, an abundant amount of supplies, and more than one set of curriculum per class—setting a high standard for daycare and childcare programs.
Ready to Transform Your Preschool’s Bottom Line?
At Radius, we’ve helped preschools like yours increase their profits, streamline everyday operations, and achieve long-term sustainability.
With tailored financial and marketing strategies, Radius can help you unlock your daycare’s potential, whether you’re looking to increase preschool revenue or enrollment, generate new preschool advertising ideas, or explore how to make a preschool profitable.
Take the first step toward higher profitability and peace of mind. Let us help you build a prosperous future for your preschool or daycare—contact us today to schedule a free consultation!