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Childcare Referral Business Idea

Learning how to start a childcare referral service can be a great business idea that helps match highly qualified, screened childcare providers with parents in need. In addition to the profit potential, starting a childcare referral business provides a great deal of personal satisfaction knowing that you are helping parents find the best and most trusted care possible for their children.

A study conducted by the National Institute of Child Health and Human Development (NICHD) found that young children who were placed in superior childcare facilities scored higher in academic and cognitive skills when in their teens. Finding excellent childcare is often difficult for working parents. In nearly every community, childcare referral services are in demand.

How to Start a Childcare Referral Service

Sound judgment and a commitment to excellence is required to own and run a childcare referral service. Understanding the services that parents need and being able to identify and screen potential providers will be the core of your business. Parents trust you to refer only the most reliable and skilled childcare providers.

Planning a Childcare Referral Service

When getting started, conduct research into childcare referral services that already exist. Check local and online resources. Investigate the various services offered and how much they charge. Learning about the current market and services gives you a basis from which to devise competitive strategies.

Consider the following when planning your referral business:

  • What system will you use to match childcare providers with parents?
  • What methods will you use to ensure that childcare workers are high caliber?
  • Will you run your business from a home office?
  • Will you focus on your local area or provide online services for a larger group?
  • How will clients find you? How will you advertise your services?
  • What type of pricing strategy will you employ?

Planning for your childcare referral service requires writing a business plan. Business plans are required if you need funding to start your business, but they are also essential tools as you plan your strategies. The research you conduct while writing your plan will give you insights into ways to compete in the current market. Of particular importance will be the competitor analysis portion of the business plan. Your competitor analysis details your competitor’s methods, strategies, strengths, and weaknesses. It then outlines ways that your new childcare referral service will compete against them.

Preparing to Start a Childcare Referral Service

Between learning how to start a childcare referral service and opening for business, numerous preparations must be made. You’ll need to take into consideration the lead-time involved in identifying your core group of childcare providers before you open your service. You’ll also need ample time to develop and test the system you plan to use for matching providers with parents.

Determining the number of providers you start with is a fine line. On the one hand, you’ll need enough providers in your database to cover your subscriber needs and geographic locations. On the other hand, you’ll want to get started as quickly as possible to start bringing in revenue while you continue to build your referral network. Identifying the appropriate size of your starting network will be one of your more important decisions as you get started.

Running a Childcare Referral Service

Running your business properly after the start-up phase is essential in order for your business to succeed. A major portion of running a childcare referral service is keeping a full database of qualified providers. Another important aspect is getting the word out about your services. Reaching parents who are potential clients is an ongoing process. Spend advertising dollars wisely by targeting parents. Local newspaper ads, posting fliers on public bulletin boards, and becoming involved in local events are all ways to let parents know about your services.

Matching parents with highly skilled providers will illicit favorable word of mouth advertising. Periodic review of each provider’s record and qualifications should be done in order to maintain the highest quality list of providers. Success as a childcare referral service depends on your ability to match parents with the best available providers. Gaining and maintaining trust with parents is paramount.

The more you learn about how to start a childcare referral service, the more you realize that owning a business involves many responsibilities. As a business owner, your focus must be on keeping your business strong and making it grow. Taking care of the accounts, handling correspondence, and carrying out all of the clerical duties can take time away from actually doing business. If they become overwhelming, look into hiring help for administrative or other routine tasks.

Succeeding in a childcare referral service business involves several factors. These include:

  • Maintaining a solid list of highly qualified childcare providers
  • Pricing your referral services competitively
  • Being accessible to both parents and providers
  • Providing superb customer service
  • Using targeted marketing so that you don’t waste advertising dollars

Expanding Your Childcare Referral Service

Learning how to start a childcare referral service, achieving success, and becoming profitable can lead to even bigger rewards. If you decide to expand your services, here are some ideas to consider:

  • If you serve a local market, broaden your scope. Building upon the success of your system you can even effectively target a nationwide market.
  • Hire employees to assist you in handling a larger workload.
  • Begin other types of referral services, such as senior daycare providers or certified contractor referrals.
  • Develop your own certification program through which childcare providers will apply.

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