Business development

How to increase your childcare center's occupancy: why data matters

Here's why knowing your full-time equivalent (FTE) can help you boost enrollment.
Increase your nursery occupancy by knowing your full time equivalent
November 30, 2022
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In a rush? Here's the quick run-down.

  • If you're looking for more ways to increase your nursery's occupancy rates, you've come to the right place. We'll explore how a fresh look at your numbers can help increase and track occupancy.
  • The key to this is knowing your FTE: that's your full-time equivalent. We'll help you learn how to calculate this, and how to use it in practice.
  • However, there is more to occupancy than just your FTE. A childcare management software has many automated tools to help you seamlessly get all vital data you need  — more on that down below.
  • Plus, learn 5 ways to boost your marketing efforts to promote your preschool, and increase your occupancy

When you think childcare centers and early childhood, you probably don't associate that with data analysis.

But as it turns out, using a bit of clever thinking and data analysis of your enrollment numbers can help you boost your occupancy, and increase the revenue at your childcare center.

See, by properly understanding past and future occupancy data, you can optimize your staffing and teacher/child ratios. For example, knowing when and where your occupancy dips is the first step to getting more little ones through your center's doors.

And the good news is, this is easier to do than you might think. It starts getting used to a concept called full-time equivalent, or FTE - an important first step into finding blind spots in your enrollment numbers, and where you can bring in more revenue.

Preschool occupancy: are you getting the full picture?

The shortcomings of 'numbers on roll'

Many nurseries still choose to manage their occupancy data using ‘numbers on roll’, and this is a problem.

Why? Well, let's explain it with an example.

Let’s say my favorite ice cream place measured their sales for each month purely based on how many different customers they had, just like you would with numbers on roll. But they wouldn’t have very realistic statistics from this — because each of these customers could have visited multiple times, or bought vastly different amounts of ice cream. This sort of data is critical to understanding your revenue, but it's not so easy to see when you're collecting data with this numbers on roll perspective.

The point is, it can be misleading to assume that each individual customer acts the same, or produces the same amount of revenue for you. This is the risk of counting with numbers on roll, as it can leave you with an inaccurate picture of how much business you're truly doing.

So what's all this talk of ice creams got to do with your preschool occupancy? Well, by only keeping numbers on roll, you wind up with a similar problem as this ice cream shop. Each child at your center might not be there for the same amount of hours. If we're only doing a head count, we don't get an accurate picture of our total occupancy.

Let’s say you have 50 places at your center and 50 children enrolled. At first glance, this might seem like you're fully booked. But, if each of those children is only in two and half days a week, you’re actually only at 50% occupancy, as those 'seats' are empty for the rest of the day. That’s a whole lot of missed revenue.

So let's move beyond numbers on roll, and demonstrate how FTE can help increase your preschool occupancy.

Full-time equivalent (FTE): your key to better occupancy

FTE stands for full-time equivalent, and you'll often see this figure expressed as a fraction or a percentage. In the simplest terms, it displays your occupancy rate as the amount of available hours you've booked, compared to the total amount of hours you could offer. Instead of doing a 'head count,' like we would with numbers on roll, we're thinking of our occupancy in terms of hours of care we can provide.

Instead of one seat, or full day of care, it's eight hours of care. That way, we can really get into detail and see where we might have some empty spots to fill. All you need to work it out it is your registers, a calculator and a spreadsheet — or, a nifty bit of software like Famly.

The big ideas

In the most simplest explanation, FTE is calculated as:

  • If one child goes to school full-time (5 days a week), their FTE is 1.0
  • But if two children attend half days each, their individual FTE is 0.5. When you add them together, though, it's also 1.0. So, together, they're like having one full-time child.

Let's do an example.

Suppose you run a small center, where you have space for 10 children and operate 8 hours a day. To have full occupancy, you'd need 10 children who are there full-time, or you could have 20 children who are there 4 hours a day. Of course, what’s more likely is that you’ll have a mixture of the two.

Here's how to crunch the numbers. We'll focus on the scale of a single day of care.

  1. First, find your max capacity. Take the hours you're open each day (in this example, 8), and multiply that by the number of spaces you have (in this example, 10). 8 times 10 gives us 80, which represents the maximum hours of care we can offer in one single day. You can then multiply that to represent a week's FTE, or for a whole month.
  2. Then, calculate the hours for your full-time children. Take the number of children enrolled in full-time care, and multiply that figure by 8 (to represent the 8 hours of a full day). Hang on to this number for now.
  3. Now, calculate the hours for your part-time children. Get the number of children enrolled in half-days of care, and multiply that by 4 (representing 4 hours, or a half day at your program).
  4. Add your results from steps 2 and 3 together. This gives you the total hours of care you're providing for your full-day and half-day children. Remember, for this example we're just looking at a single day.
  5. Divide that sum by your 'max capacity' number. The result represents a percentage — your full-time-equivalent, compared against the total number of hours you could provide.

Now you can now optimize your marketing and awareness to push your occupancy rate much closer to your real full capacity.

How to use this occupancy data over time

Now that we have a better idea of how to understand your nursery occupancy, what can we actually do with all this data?

The best thing about past occupancy data is that you already have it ready to use from your registers and your child plans. In a perfect world, it’s better to work off a plan here rather than a register, as you can look at vacant places rather than just attendance records, including holidays and sickness.

The best thing about having records going back in time is that you can make comparisons year on year. Are there certain times of the year that are always quiet?

Once you have this kind of understanding of your own childcare center, and you can prove that it’s happened multiple times over the years, you can start to work out why it’s happening. Importantly, this keeps you prepared for that same time next year, and leaves you with enough understanding to do something about it.

Suppose you've found some opportunities to book extra enrollments. Here are a few things you could do:

  • Let existing parents know that slots will be opening up, in case they have more children, or are interested in more care
  • Alert your waiting list, if you have one, to see who could use the hours you have available
  • Boost your marketing efforts (more on that below!), to connect with new parents to fill the spots
  • Consider offering cheaper rates to fill these sessions, if they're quiet or in odd hours

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Trust projections, not predictions

While understanding past data can be useful, projecting your occupancy rate going forward is where the real benefit lies. It's one thing to know what happened — but it's even better to know what will happen.

This goes beyond FTE, and toward more advanced methods of using your data to boost enrollments. By accurately projecting based on plans rather than just predicting using past data, you have a much more precise framework to work around. Yes, it can be slightly more difficult to collect this data, but it’s worth it.

Early childhood platforms like Famly include forecasting tools that automatically analyze your data, and generate these projections for you.

These forecasts can give you a clear insight into things like:

  • What your attendance will look like in the coming weeks and months
  • Attendance for each classroom so you can accurately schedule staff and stay in ratio
  • When you can expect open spots in classrooms, so you can optimize your enrollment
  • How much tuition income you can expect in the busy months, as well as the slow periods

When you’re able to know things like that, you can start to plan your budget months in advance. This can make for huge peace of mind, and help you make sure your child care program’s finances are secure and healthy for the future.

Now that you are getting the full picture and more accurate data about your preschool’s occupancy, you may realize that you have some open spots to fill. 

How to boost marketing efforts for your nursery or preschool

We are going to share with you 5 ways to boost referrals to your childcare center and increase your occupancy rate.

There's nothing like a referral from a trusted source.

Asking a friend if they know someone for a job or service is often our first step before we even think of Googling it. And, many parents start their search for childcare providers exactly the same way - through referrals from friends. So how can you make the most of referrals for your center?

It starts with running a great setting, where children are happy and thriving. The better the early education you provide, the more parents and carers will want to recommend you. But there are plenty of other steps you can take as well.

Here are four of the best ways to increase your referrals and get that occupancy rate rocketing.

1. Hold an open house, or event

Traditional marketing methods have their place in getting your name out there but, for prospective families, there's nothing like seeing your setting live to really get a feel for it. Why not hold a special event, where your current children and parents can invite their friends and families with younger children?

Your target audience is families with nursery or preschool aged children, so consider what kind of event would attract those parents. The aim is to show off the best of your setting but without the pressure or perceived commitment of a show-around. Consider relaxed and fun events like:

  • A craft event
  • A messy play session
  • An outdoor picnic
  • Let the children sing and perform their favorite songs

Consider what makes you special. You’re giving new parents an opportunity to see your nursery at its best, with people they’re comfortable around. Just make sure you have some leaflets and contact details to hand for curious prospective parents.

2. Make information about your setting clear and easily accessible

‍Have plenty of information on your notice board that parents can pass to potential customers.

You may already have plenty of happy parents, who're willing to recommend you to their friends, but perhaps you're just not making it easy enough for them.

Have a supply of leaflets in a high-traffic place, such as near your main entrance, so parents can easily pick one up to give to a friend. You could also create a one-page PDF with some basic information about your setting. This should include:

  • Your center's basic information, like name, address, opening hours, and contact information
  • Some strong selling points, like what makes your center unique, special services, or facilities.
  • What the next steps are and how to complete them, such as how to book a show-around or register online.

The easier it is to find this information, the easier it is for parents to sell you to their friends.

3. Make your website simple and easy to navigate

A website is almost essential for any business and can be incredibly valuable, but you've got to do it well.

You certainly don't need a degree in digital marketing but you should make sure that your website has easy access to information about your center, including how prospective parents take the next step. That might be a sign-up form for a show-around or an open day, or simply making sure that all your contact details are easy to find.

You can also attract parents through social media, such as via Facebook advertising, or simply posting on local groups.

4. Meet your occupancy goals with word-of-mouth

It’s ok to simply ask parents to spread the word.

Word-of-mouth marketing is as old as business itself and is a great way to increase your occupancy, so don't be afraid of asking parents directly for referrals.

Simply tell parents that more sessions have recently become available, and if they know anyone on the hunt for a great childcare center, let them know. This approach might even lead to your existing parents signing up for more sessions throughout the week.

However, do consider the timing of your request. For example, if you've just let your existing customers know you're going to be increasing fees, they might not be as willing to sing your praises. 

What’s more, if you’re asking people directly, see if you can make it worth their time. A small, one-off discount on fees could be a good incentive for parents.

Also, to make sure that you are able to tap into word-of-mouth marketing, you should encourage regular feedback from your existing customers.

If you’re asking for referrals you need to be open to feedback too. After all, if your parents aren’t recommending you to their friends, it's better to know the reason why. You might not be able to resolve the problem immediately, but it can be just as powerful to explain why your center does things in a certain way.

Giving parents a clearer view of day-to-day life at the nursery, keeping them updated on events, and opening up better channels of communication could make all the difference when that friend asks “What nursery does Emily go to again?”

5. ‍‍Leverage local businesses to help you increase your occupancy

Working together with your community to help other local businesses is a great way to promote your center.

Referrals don’t have to come from parents. Chances are, there are loads of other opportunities in your area to set up complimentary referral schemes.

Libraries, museums, or children's activity centres may allow you to leave some flyers with them if you pop some of theirs on the notice board at your setting too. And, when the children from your center visit these places on an outing, don't forget to let them know who you are.

It might be worth getting friendly with a local estate agency too. Estate agents regularly advise new families to the area, who may be looking for a home near good schools (yours being one of them). Not only that, but estate agents could give you the inside scoop on any new housing developments, bringing an influx of families with them.

All in all, putting your name further out there into the community is unlikely to ever be a bad thing.

For more occupancy advice, why not check out our complete guide to marketing your nursery.

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Official Danish Government Reopening Advice

Guidance from the Danish Health Ministry, translated in full to English.

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UK Nursery Covid-19 Response Group Recommendations

The full recommendations from a working group of over 70 nursery chains in the UK.

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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