Monday, July 04, 2005

Daycare Business - Non-Profit vs For-Profit

I'm trying to start a daycare. Can someone tell me the different in nonprofit daycare and profit daycare?

Don't think that the irony of this has escaped me! In my own honest (and humble) opinion I think it would be better to operate as a for-profit the main reason being that you are limited in what you can do as a non-profit because there is much more that you have to answer to and for. But one of the many reasons why people operate (and want to operate) as a non-profit is so that any contributions and donations that they get are tax-deductible to those that contribute and donate - a fact that makes it much more appealing to those that contribute and donate. And of course there is more grant funding available for non-profits. (That's not to say that there is no grant
funding available for for-profits there are of course).Talking about daycare specifically starting a daycare center is one of the businesses that is always recommended as a good business for someone to start because there is always such a high demand for it. (And the reason why there are so many grant programs for daycare is because there is such a big need for it!) The basic theory behind running a daycare center is
that there is such a need for it that you may have more business than you can handle and of course more business means more income and more income means more profit. A recent example I read about was about a man that started a daycare
business and he had so much business that he opened a 2nd and then a 3rd daycare center. But unfortunately I have also seen the other side of this and from the people who would know and that is other daycare operators. Their complaints range from parents that don't want to pay all the way to the operator being sick and the parents bringing the children to them anyway (or even worse yet the parents bringing a sick child to them).  So this is another reason why operating as a non-profit would
look more attractive because receiving as much grant money as one can helps the business go more smoothly.

Of course there is always a third option and that is operating  as a non-profit or for-profit and then changing to the other "side" depending on how your circumstances are (or how you want your circumstances to be). Just because you operate as one way doesn't mean that you have to continue to operate that way.

And then there is a fourth option of "splitting" it - which is one of the ways that organizations of all types have been able to do it for years.

And then there is a fifth option of partnering with either a profit or non-profit - again another way that organizations of all types have been doing for years.I hope this explains it a little bit better

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