Business development

Why you should be checking your child care occupancy every week

And what to do if you’re not meeting occupancy targets
Tracking occupancy is key to financial success in early education
May 31, 2022
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In a rush? Here’s the quick run-down.
  • This article is part of Louise Stoney’s Iron Triangle series, which presents a three-part formula to use as a pathway to better business in early childhood education.
  • In this story, the second of the series, Louise explains why it’s so important that you’re regularly checking your child care occupancy — and the tools that make this process easiest.
  • To read part one of this series, which gives an overview of the Iron Triangle formula, click here. The next story, which focuses on tuition and fee collection, is available right here.

In the first part of this series, we took a broad look at the three elements of the Iron Triangle of Early Care and Education Finance: Full occupancy, full fee collection, and making sure your tuition covers your costs. Now let’s take a deeper look at the first point on the triangle—full occupancy—and explore strategies for tracking progress and leading success.

Having good occupancy is a cornerstone of early years finances, regardless of whether your program relies mainly on government funds, parent fees, grants or a combination of the three. But even if you’re primarily relying on subsidies and government funds, those are often conditional on meeting occupancy targets — so no matter who you are, having healthy occupancy is always critical.

The bottom line is that if children are not enrolled, the funding does not flow.

So how do we make sure our occupancy is as high as possible? And how do we even know what we should aim for, if we’re setting goals for our enrollment? That’s what we will be exploring today.

What’s a good occupancy target for child care settings?

Some experts suggest that a well-run setting can operate at 95% occupancy.

Reaching a benchmark this high might be possible in classrooms that receive contracts or grants, offer services free or at very low cost, or where demand is consistently very high. In most cases, however, the industry standard of 85% occupancy is a more appropriate benchmark.

However, this number isn’t universal. During our recovery from the COVID-19 pandemic, or in classrooms where occupancy has been historically low, it may be necessary to drop the benchmark even lower than that 85 percent mark. It is entirely possible, and in many cases appropriate, for occupancy benchmarks to vary by setting, or even age group and classroom.

That said, it’s essential that you regularly track your occupancy and be prepared to take steps to adjust your staffing or structure, or raise money to fill funding gaps when occupancy levels are consistently low. 

Early education programs that have adjusted staffing patterns, classroom age mixes, unusual hours or other policies to account for lower enrollment (and the consequential drop in revenue) may find it possible to operate in the black at 50% occupancy. However, without modifications to staffing or services, such a significant drop in enrollment on your child care setting will make it impossible to balance the budget.

Tip: To calculate your setting’s real occupancy rates, you’ll need to know your Full-Time Equivalent, or FTE. Learn what that is, and how to calculate it right here.

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Early Childhood Platform - Famly Home

What do you do if your occupancy is going down?

Any time occupancy drops below the budgeted target, an early education program is losing money.

Thus, it’s essential to set occupancy benchmarks that are informed by revenue projections, and monitor your occupancy on a weekly basis. That way you’re better prepared to take corrective action if you’re falling short of your goals, and you can act right when the problems start — not when it’s already gotten way out of control.

If it becomes clear that your occupancy is consistently below your benchmark, changes must be made to ensure sustainability. 

A range of options are possible, for example:

  • You could potentially combine classrooms and mix age groups. Many ECE leaders extoll the benefits of mixed age groups as an effective strategy to strengthen developmental skills, build confidence in younger children and empathy in older children. 
  • You could re-structure staffing patterns. Reducing some administrative positions (where tasks can be handled electronically or virtually) or employing a teacher or director who spends part of the time in the classroom and part on administrative tasks could help. You may also check with staff to see if any would be willing to reduce their hours.
  • You could coordinate with other providers to share supply orders or back-office resources. In the United States, these networks are called Shared Services. Similar networks in the United Kingdom exist as well — consult your network or Local Authority to learn more.

In general, right-sizing your program will require that you revisit previous assumptions about staffing and explore a range of alternative strategies.

How to get a handle on your occupancy 

Early childhood education providers use a variety of tools to track their occupancy and make the most of that data.

Some providers created ‘home-grown’ dashboards that use Excel tables and spreadsheets to monitor enrollment by classroom each week.

Others use an automated early childhood platform like Famly to generate weekly reports. A growing body of early education are learning that automation makes it possible to more easily manage routine tasks, track trends, and benchmark progress.

Famly, for example, has a number of features that can help you manage your occupancy:

  • Attendance forecasting. This can help you get a long-term idea of your occupancy, and match that with your staff schedules to make sure you’re not over- or understaffed.
  • Generating occupancy reports. This feature allows you to track your occupancy both by a percentage of your max capacity, or by your full-time equivalent (FTE).
  • Automated occupancy planning. This helps you see exactly how many open spots you’ll have available, either next week or further in the future.
  • Automatic age group moving. With this feature, you won’t have to track each child’s birthday to move them into a different pricing group as they grow older. The platform will keep track for you, and automatically move children into the appropriate rooms and tuition plans.
  • Custom enrolment forms. These ensure you get all the data you need from every prospective parent. Registration is seemless for parents and for you.

In short, keeping track of your metrics matters. And tracking occupancy — every week, for every classroom — is key to ensuring long-term sustainability of your early childhood program. With early childhood platforms like Famly, you can make occupancy tracking a simple and effective part of your weekly duties.

However, occupancy is not the only metric that should be tracked on a regular basis. In my next blog, I focus on the second leg of the Iron Triangle of Finance: Full fee collection. You can read that story right here.

Louise Stoney is an independent consultant with over 30 years’ experience in early care and education finance and policy. In 2009, Louise co-founded Opportunities Exchange, a non-profit organization focused on transforming the business of early care and education to improve outcomes for children.You can learn more and get in touch with Louise at or

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Please note: here at Famly we love sharing creative activities for you to try with the children at your setting, but you know them best. Take the time to consider adaptions you might need to make so these activities are accessible and developmentally appropriate for the children you work with. Just as you ordinarily would, conduct risk assessments for your children and your setting before undertaking new activities, and ensure you and your staff are following your own health and safety guidelines.

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