How to Grow Your Childcare Business: 3 Growth Options for ECE Owners
Every successful early childhood education business owner reaches a crossroads: stay the course or take the leap and expand your childcare business. The right path isn’t always obvious if you haven’t grown a business in the childcare industry before. Growth comes in many forms, and each step forward opens new opportunities. Whether you’re looking to maximize the potential of your existing school or expand your footprint with new locations, understanding your options is the key to making smart, strategic moves.
At HINGE Advisors, we’ve worked with hundreds of childcare business owners across the country, helping them navigate the opportunities and complexities of growth in every type of economic market imaginable. No matter where you are in your journey, you have options.
1. Organic Growth — Maximize What You Have
If you’re not ready to acquire or build, growing from within can be a powerful strategy. Many owners overlook just how much untapped potential exists inside their current operation. Before you explore external expansion, ask yourself if you are making the most out of what you already have.
Maximize Enrollment – The financial sweet spot for most centers is to be at 70–90% of your licensed capacity. If you’re sitting at 70%, that’s just the beginning of financial health. Pushing towards 90% can be transformative for your bottom line.
Expand Age Groups or Offerings – Adding an infant room, a new curriculum focus, or unique extracurricular activities (like music, STEM, or foreign language) can attract new families.
Partner with Outside Entities – Local businesses, community centers, and organizations can provide new revenue streams, like corporate childcare partnerships or shared programs. This option requires strong relationships and a solid reputation but can be a cost-effective way to grow.
Expand Your Facility – If demand is there, adding classrooms or repurposing space can be a high-return investment.
After-School Programs – Public school partnerships can bring a steady influx of students needing extended care.
2. Acquiring Another School — Growth Through Purchase
If you’re considering acquiring another childcare center, remember that the most valuable asset in any acquisition is the people — the team running the school and taking care of the families enrolled. A smooth transition is key to preserving the school’s cash flow and making the acquisition a predictable, profitable move.
The Price of Acquisition – Understand that you’re buying a business with existing revenue and operational systems, not just a building. The purchase price of a school is based on cash flow. A careful valuation can give you an accurate view of what a school and its real estate is really worth.
Success Comes Down to Transition – The way you transition staff and families into your culture determines the long-term success of your investment. When done right, an acquisition can provide stability, scalability, and access to great team members.
Learn how you can gain an early education growth partner with HINGE Advisors.
3. Brownfield vs. Greenfield: Building a New School
If you’re ready for a big leap, developing a new location gives you ultimate control over how you grow your daycare or childcare business. Whether you repurpose an existing building or start fresh with a custom build, both offer unique advantages and come with their own set of challenges.
Brownfield Development – Taking an existing building and converting it into a childcare center can be more cost-effective than starting from scratch. However, adapting an old space to meet licensing and safety requirements can come with challenges.
Greenfield Development – Building on undeveloped land gives you complete freedom to design the perfect school, but at a higher cost. Construction prices are high, so you must ensure your tuition rates can support the investment.
A well-planned new location can meet demand while also strengthening your brand and operations in key ways:
A brand-new facility attracts families looking for the best environment for their children.
You can place your center exactly where you want it — expanding into new, high-demand areas.
Modern layouts and features help streamline operations and improve staff efficiency.
Weighing the Pros and Cons of Growth
As your early education business grows, understanding the advantages and potential challenges can help you plan more effectively.
Finding the Right Growth Strategy for You
The best strategy for expanding your childcare business depends on your goals, resources, and risk tolerance. Whether you’re maximizing your current center’s potential, acquiring another school, or building something new, having the right plan (and the right advisors) makes all the difference.
At HINGE Advisors, we specialize in helping early childhood education business owners navigate growth with confidence. If you’re ready to explore your options, contact us so we can help you learn more!