FAQs: Child Care Business Feasibility Estimator

What does the Estimator do?

The Estimator provides default information on staff compensation and tuition based on averages for the selected county. You can override these defaults by inputting your own compensation and tuition rates. The Estimator also provides fields for costs related to paying staff benefits, program management and administration, education program expenses, additional costs related to quality, and tuition collections rate. Guidance for each of these categories are also provided in the Estimator.

What information will I need to use the Estimator?

The Estimator is designed to be completed in less than 10 minutes, and only requires that you know the type of facility you’d like to operate (licensed center or family-home), the estimated square footage for use by children, your rent and occupancy costs, and your current and aspiring Early Achievers level (if applicable).

What other factors should I keep in mind?

• If a provider is using Early Achievers Tiered Reimbursements, these are included in the Results page calculations.
• When estimating square footage of your space, be sure to only include square footage usable by children. According to the Washington Administrative Code, this does not include hallways, entry ways, changing tables, space for staff and administrative functions (breakroom, office, janitorial). If you do not know the usable square footage for children, we suggest multiplying your total square footage by 70% to create an estimate for space intended for children.
• Some users may want to know monthly costs per age group in order to show profits for that age group. We recommend running separate scenarios that focus on one age group.
• Estimator results can be exported to a spreadsheet for continued analysis.

What are the Estimator’s limitations?

• Agnostic on business ownership structure: This Estimator does not take into consideration the structure of your child care business, for example, a sole proprietorship vs. a limited liability corporation (LLC), because costs and taxes vary widely depending on the business structure.
• Revenue estimates from a facility expansion: Because of the extreme shortage of child care, many existing child care businesses may be interested in estimating the return on investment on an expansion. This tool does not provide guidance on expanding an existing business—it is only designed to provide a cost estimate for a new business.
• Not a budgeting tool: This is not a budgeting tool for existing child care businesses. However, we invite you to export the Results page to an Excel spreadsheet to continue your analysis. You may also want to do a more in depth analysis of your business expenses using the Department of Commerce Cost of Quality Calculator for Child Care Centers or Family Child Care Homes.
• Seasonal cost fluctuation: Costs can rise during the summer months as staff schedules and children’s attendance increase, specifically for school age children. To consider seasonal costs, run those in a separate scenario.
• Discounts for staff and siblings: Child care programs may offer discounts to staff who bring their children, or for siblings from the same family. This Estimator uses average costs and doesn’t account for discounts for individual children.
• Staff overtime: This Estimator does not calculate overtime. We suggest you adjust Full Time Employees to make sure you have appropriate coverage for paid time off.
• Complex labor costs for individual teachers/staff: These may vary based on education and experience. We provide wage estimates by county (minimum, median, living wages) but the Staff Compensation field as an open so users can adjust wages as needed for their business. This Estimator does not break down individual pay rates by staff role.
• Cost of changing Early Achiever tiers: This Estimator does not calculate the cost of moving up in Early Achiever tier. A comparison of Early Achiever tier operating costs can be viewed by running those scenarios separately through the Estimator.
• Complex revenue streams: This Estimator does not account for complex revenue streams, such as privately paid tuition, Head Start contracts, grants, and increasing reimbursements from WCCC tiered rates.