If statistics can target profitable ventures, child care would seem a fail-safe way to make it big during the coming decade. Census figures indicate that mothers are the largest group entering the work force, and surveys are naming the industry as a good one to enter because of the demand. The Small Business Administration published a manual that walks potential center operators through their start-up concerns to encourage affordable, quality service.
What the statistics don't say is that the level of business and child-care expertise needed to start a quality, affordable child-care center keeps many out of the business and causes numerous others who enter to falter.
"If the need is so great and still the greatest unmet market and everybody knows about it, why aren't there more day-care centers?" said Jeanie S. Almo, president of Kid's First Inc., which operates three centers in the area.
The answer to Almo's question exists somewhere between the financial risks, the psychological juggling act required to coordinate the interests of parents, staff and children, and the need for educated personnel.
"What's good for the parents, and what's good for the staff, is usually unrelated to what's good for the kids," said Almo. "And none of it is good for business."
Maintaining these relationships and tackling the financial aspects of the business are the biggest challenges an owner faces.
"The main thing in this industry is that many people who get into it don't understand business," said Mark L. Rosenberg, an officer of a national child-care trade group and co-founder of the Kids Place Inc.
Because many people who start day-care centers are leaving careers in teaching or child development, they do not have the background to understand the financial side of the business. With the narrow profit margins that accompany such a highly regulated business, many start-ups fail. Zoning, fire, health safety and licensing codes dictate strict construction guidelines. Almo said her latest center, a 5,000-square-foot space for 110 children, cost more than $300,000 to build.
Personnel costs generally take up 60 percent of a center's income, not including the cost of program development. Another factor that depresses earnings is that new centers do not operate at full capacity,, according to Almo.
A day-care center not subsidized by a community ends up being subsidized by employees, who are generally paid $5 to $7 an hour. Even teachers with degrees in childhood education rarely make more than $10 an hour.
Child-care entrepreneurs who do not want to put together major deals but are interested in taking care of children have other options. The most common is a family day-care home, where a provider takes care of up to six children in his or her own house.
Through zoning and licensing, states and counties regulate the number of children a provider can take in. The most difficult aspect of such a business is that the provider is a lone adult trying to take care of children while also cooking, cleaning and running errands.
Crystal Freyvogel runs a family day-care home in her Woodbridge house and is active in the Northern Virginia Family Daycare Providers Association. She takes care of five children every day, including two of her own. She said revenue is about $17,000 yearly, of which $11,000 is profit.
Freyvogel kept her job in the fashion industry when her first child was born. But after a year, when she decided she would rather be at home, she decided to start a family day-care home.
The main benefit, she said "is that you're in your home with your children. And working with children is easier than working with adults." People who do not share her positive feelings about children would find the business less bearable.
"If you didn't wake up in the morning enjoying it, it wouldn't be worth it because the money is not there," Freyvogel said.
The association, she said, gives day-care providers a link to the outside world, as well as training workshops and guidelines for drawing up contracts. It also provides a much-needed network for members who spend most of their time without seeing other adults. Providers form support groups, bring their children together to play and are available to help each other in a crisis.
While many in-home day-care providers find the paperwork a burden, government officials argue that regulation is essential even though the industry is difficult to regulate because of the widely varying conditions in different households. Still, it is possible in most states to operate a day-care home without being licensed.
Both houses of Congress recently passed child-care bills requiring states to come up with standards for child-care operations and offering assistance to states and poor families. Maryland was one of the first states to set up a loan guarantee program for day care. These elements show that the issue, and the industry, are starting to be taken more seriously.
"The industry is going from a 'Ma and Pa' stage to a more mature, businesslike industry," Rosenberg said. "But the perception out there is this is not a business really, it's just baby-sitting."