In search of child care solutions, startups turn to home providers

Demand for child care is high and in some places, there are shortages. A number of startups believe the answer lies in in-home child care.

Last spring, Tricia Shields was at work at a kidney treatment center in Denver, Colorado.

“I think I was daydreaming at my desk,” Shields said. She was tired of only seeing her kids at bedtime and her job was getting to her. She’d get close to patients and, sometimes, they’d die.

“It was wearing on me,” said Shields. “I just needed a change. I was looking for a bright start to something new.”

That day at her desk, she was playing music on her phone when ad came on.

“It was like, ‘Do you want to start your own business? Do you want to be with your kids? Do you want to be around kids?’ And I was like, ‘Yes, I do!’” Shields recalled. “It said, ‘Click here’ and I never do that, I never click on ads, but I did.”

The ad was from a company called MyVillage, one of at least three startups, including WeeCare and Wonderschool, that are trying to get more people to start child care centers in their homes.

According to a report from the Center for American Progress, 51% of people in the U.S. live in a child care “desert,” defined as “any census tract with more than 50 children under age five that contains either no child care providers or so few options that there are more than three times as many children as licensed child care slots.”

This unmet need has prompted a few startups to enter the industry, seeing opportunity in areas where demand for child care is high.

“Our mantra is that we make it easy to start, run and grow a home-based child care program,” said Beth Szymanski, co-founder and chief financial of MyVillage, which has about 80 locations in Colorado and Montana.

Her company and others like it are mostly focused on child care in a provider’s home, rather than on nannies or big childcare centers. Szymanski said there’s a simple reason for that: cost.

“Nannies have a really high personalized cost because it’s one person trying to make a living off of your family,” she said. “Child care centers have really high overhead. They have rent and they have utilities.”

But in-home child care is often more affordable for families. The rub is figuring out how to make these small businesses easier to run, which is the idea behind the startups. MyVillage, for example, deals with things like marketing, taxes, paperwork, and setting people up with mentors. It also pays for the child care providers’ insurance. In exchange, the startup gets 10% of the enrollment fees each month.

“When I saw what they were doing, it was like, ‘Wow, yes,’” said Louise Stoney, referring to MyVillage, WeeCare and Wonderschool. Stoney is a consultant in early childhood education and cofounder of Opportunities Exchange, a nonprofit working to make child care more sustainable by, for example, promoting a format known as “shared services.”

“How do we take small settings and how do we help them to succeed? How do we link them together? How do we redefine, in some way, what it means to be a child care center?” she said.

That question may be most pressing in rural areas. The Center for American progress found that three in five rural communities lack adequate child care supply.

It’s important to note that the analysis only looked at licensed child care providers, so it’s entirely possible that in some communities deemed “deserts” the child care need is in fact being met by friends, family or other unlicensed providers. But, said Simon Workman, who directs the Early Childhood Policy group with the Center for American Progress, one thing is clear.

“The child care market is broken,” he said. “Parents can’t afford to pay anymore, but providers are struggling to make ends meet. Child care teachers are making about $10 an hour, on average, across the country.”

Many home-based providers are closing their doors. The National Center on Early Childhood Quality Assurance found that the number of family child care homes has been steadily falling for about a decade, with licensed ones falling 20% between 2014 and 2017.

Home-based child care is sometimes the only option in rural areas. When those close, he said, “That is leaving families in those small communities with no care whatsoever.”

But in-home providers face a tough challenge: child care needs to be high quality and affordable for families while also providing a living wage.

At her home in Parker, Colorado, Tricia Shields says she hopes she’ll be able to do all of that. She put about $15,000 into renovating her basement and jazzing it up with second-hand furniture and colorful decorations.

There’s a reading corner, a box of costumes and play structures outside. Shields is now licensed to work with babies and kids and by November she had only one slot left to fill before she hit the state limit of six children. She charges about $1,000 a month per child. One of the kids is her son. And a few weeks in, things were going well.

“I love it,” she said. “I feel fulfilled at the end of the day. And I don’t have to drive anywhere when I get off work. I love that part.”

But it’s not all rainbows and unicorns. Shields works alone, so she doesn’t get many breaks. And on the money front, it’s stressful.

“The financial hit has been really hard,” she said. “We renovated our basement and that took everything out of us. It drained us and now we’re just kind of playing catchup.”

She expects it’ll take a couple of years to get settled financially.

This story was originally produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, the O’Connor Center for the Rocky Mountain West in Montana, and KRCC and KUNC in Colorado.