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Strengthening Child Care Small Businesses in Mississippi

The Committee for Economic Development (CED) hosted a meeting in Indianola, Mississippi on Saturday, June 25th, to focus attention on the business needs of local child care providers and to share potential business and financial tools that can make these care providers more effective business owners. Partners in the meeting included the Mississippi Center for Education Innovation, the Delta Council, Southern Bancorp and Mississippi State University's Extension Office.

Mayor Steve Rosenthal, a local business owner and the Mayor of Indianola, opened the meeting and welcomed the group. Mayor Rosenthal shared his own challenges as the owner of a retail sales company and what it takes to be successful - particularly in the current economy. He commended the participants for the role they play in changing the lives of children and emphasized how important their work is to the future of Indianola and Mississippi.

Shannon Griffin, with the Mississippi State University Extension Office, talked about a survey that had been done that focused on child care business needs and concerns. The providers that completed the survey indicated that some of their key challenges included:

  • Developing a budget
  • Affording mandatory insurance such as liability (No one provides health insurance.)
  • Getting good prices on supplies and learning materials
  • Maintaining full enrollment
  • Tax issues
  • Finding qualified staff and providing development to staff

As Shannon noted, these are typical business challenges but, for child care providers who have a very narrow profit margin, it's an even bigger challenge. Another issue relates to the fact that often they are going into the business because they love caring for children - not because they want to run a small business. The talents of a small business person versus a child care provider often seem incompatible to them. The market-based nature of the business also makes it a challenge. As one participant noted, in order to cover all their costs, they need to go up on their prices but then parents will go somewhere else and they will lose business.

Betty Burkes, a consultant for CED, shared some examples of how these small businesses could work together to share costs and services such as a common payroll system, bulk purchasing of supplies and insurance, staff development programs, etc.

One child care provider explained very succinctly the challenges they face, saying "If we don't have children then we don't make money and that is the only way we can pay our bills. We love children and we work hard, starting at 6:30 in the morning. We don't work at this job to get rich but we need to pay our bills. We need help. We can't get a loan. The bank doesn't want to see us because we don't make enough money." She continued by saying that "There is not a lack of children that need to be served. There is a lack of money to pay us to look after the children. Parents don't have enough money. Now that the child care subsidies have been cut, they don't have any money to pay us to look after their children."

When asked about the idea of a shared services alliance, the child care providers said that they liked the idea and that "anything that will help us stretch our resources further is a good idea." There was much discussion about how this concept would work in their region. Brainstorming began about how it might be feasible. Mayor Rosenthal shared his own experience in the retail business, talking about how he and some other small businesses joined together to do more bulk buying so that they could get special discounts. That was an excellent real-life example of how it could work for the child care providers too. He suggested they could start small in their work together and then grow to bigger savings later.

Barbara Washington, with Southern Bancorp, followed up the discussion on shared services with a conversation on the services that her organization provides to support small businesses and low-income communities. (Southern Bancorp is a bank with a nonprofit component which allows them to offer special services that a regular bank would not.) She particularly shared information on the IDA and VITA programs. VITA provides tax preparation services at no cost. IDAs are special bank accounts that help save money for things like starting or expanding a small business, buying or repairing a home or paying for college or job training. As part of the account, your savings are matched on a 3:1 basis, providing a $2000 match on a savings of $666.67. The participants had numerous questions about this opportunity and how to access it.

Frank Howell, Economic and Community Development Director with the Delta Council, the economic development organization for the Delta region, wrapped up the discussion. He emphasized the importance of the work of the child care profession and their ability to educate the future workforce. He also emphasized the economic importance of the child care industry. Their economic success is tied to the whole community. As he stated, "We need to be huddled up to improve our lives individually and as a community." He further pledged to come back together and think more strategically about how we work better together, how we communicate better and what next steps are needed to do a better job for the people of Indianola.

Click Here to see the Event Agenda

Click Here to read the Speakers' Biographies

Click Here to see Shannon Griffin's presentation