Part
01
of five
Part
01
Daycare Financials
After an extensive search through industry-related websites, government databases, and regional news sources, financial details about operating a typical daycare facility in Ontario do not appear to be available in the public domain. However, the research team was able to gather valuable insights about the childcare space in both Ontario and Canada as a whole.
USEFUL FINDINGS
ONTARIO
- According to the Ministry of Education in Ontario, there were 5,437 licensed child-care centers in Ontario as of March 31, 2018, with a total number of spaces of 427,032.
- As per the above data, the average number spaces in each of these childcare centers were 427,032/5437 = 78.54 or approximately 79.
- The median daily fees for one full day in these childcare centers were $66 for infants, $53 for toddlers, $47 for preschool, and $41 for kindergarten which averages to $1,552.50 for a month. [($66+$53+$47+$41)/4] = $51.75 for a day and (30X $51.75) = $1,552.50]
- With approximately 79 spaces per center and average monthly earning per space being $1,552.50, the average yearly revenue earned by these centers can be estimated to be $1.47 million. [($1552.50*12*79) = 1,471,770]
CANADA
- As per the statistics published by the Government of Canada, the annual revenue earned by a small and medium-sized Child Day-Care Service in Canada ranged between $30,000-$5,000,000 in 2017.
- The exact average for the annual revenue earned by a small and medium-sized Child Day-Care Service in Canada, in 2017 was recorded at $153,600.
- The average value for operating expenses incurred by a small and medium-sized Child Day-Care Service in Canada, in 2017 was recorded at $109,000.
- The average net profit recorded by a small and medium-sized Child Day-Care Service in Canada in 2017 was recorded at $33,000 which is ($33,000/$153,600) = 21.48% of the average revenue earned.
- According to a December 2018 report by IBIS World, the daycare market for Canada earned a revenue of $9 billion from 40,881 businesses, implying each business to have earned an average annual revenue of $220,151.17. [($9 billion/ 40,881) = $220,151.17]
INITIAL CAPITAL COST
- Although the initial capital cost figures were not available specific to Canada or Ontario, the cost estimates for starting a home-based daycare business ranged from $10,000 to $50,000, while Daycare center franchise startups ranged from $59,000 to $3 million.
RESEARCH STRATEGY
While we found various insights into the childcare space in Ontario, child daycare services in Canada as a whole, and initial capital cost estimates for starting a home-based daycare business or similar franchises, we could not find the exact financial statistics around the operation of a typical daycare facility in Ontario, Canada.
We began our research by looking into the registration process for a daycare facility in Ontario, hoping to find some financial data like operating cost and initial capital cost. We focused on federal and provincial government portals. Our aim was to locate data presented on the average financial metrics or benchmarks that an entity may have to meet while going through these processes. Ontario's Ministry of education website had some data regarding the number of registered daycare facilities and average fees charged by them, which we used to calculate an estimate of the average revenue. Most of the other information was limited to the process of beginning one of these businesses and there were no specific financial figures mentioned which could have helped us present specific financial statistics for the operation of a typical daycare facility in the province of Ontario, Canada
We then looked into the top childcare companies in Ontario. In doing so, we intended to check the companies individually and look for any public financial data. We also hoped to take the top five companies and present their average estimated operating expenses, revenue, initial capital costs, and EBITDA. However, after looking through a lot of companies found from various industry-specific sources, it became evident that most of these providers are either not-for-profit or are privately held, so none of them disclosed any financial data. We also did not find any blogs or similar sources that ranked companies by their financials, so we relied on review-based rankings that generated a list of 10-20 companies in the childcare space in Ontario. We also checked for licensed daycare centers in Ontario from the Ontario Ministry of Education, though none of the companies we found provided any financial data. Therefore, we could not present any data based on these findings.
We also checked reputable news sources based in the region, as well as local associations and their publications. By looking through these sources, we hoped to find information on the existing daycare facilities in Ontario and the growth of specific companies or the overall market in the past few years. By growth, we were specifically looking for revenue over time.
Finally, we consulted resources that assist individuals in starting a business, such as a daycare company or facility. We hoped to, through these resources, find an example or approximated information on the proposed expense benchmarks or projected return benchmarks, in addition to things like operating expenses, revenue, initial capital cost, and EBITDA. While we were able to find some metrics on starting a daycare business, none of the information was specific to the Ontario region.