by Natasha Ashenhurst
Lynnette McCarty, owner of Serendipity Children’s Center, Inc., has worked in Early Education and has owned her business for 32 years, and has never encountered a crisis even close to COVID-19.
The margins for Early Education facilities are small. Break-even runs between 82 to 84 percent. This break-even point assumes no debt service other than a mortgage for a building or rent.
When COVID hit, Serendipity Children’s Center was operating at maximum capacity — 99.9 percent full. McCarty’s reputation, excellent management and tenure in the community meant that spots in her center are hard to get. Staff accreditation, competitive salaries and benefits also meant she could attract top talent and maintain low turnover. Her business success is the result of years of hard work, careful growth and shrewd management, all threatened by COVID.
When COVID hit, and the community was instructed to shelter in place, Serendipity was considered essential and was allowed to stay open to serve essential workers.
“Although we were grateful that we were not closed completely, working for essential workers came with stress. Some employees were afraid to work. Many parents decided to keep their children at home, and overnight, our enrollment dropped to 46 percent. It took some time to process what was happening, and the reserves that I had saved were staring me in the face as I calculated the short potential future of my business,” said McCarty.
It took time, money — and brave and dedicated employees — to stay open. McCarty applied for and received the Paycheck Protection Program SBA (PPP) loan, which allowed her to stay open despite rising costs in food, cleaning supplies and protective equipment. When school was canceled for the rest of the 2019/2020 school year, she lost another $12K in revenues. A short time later, she heard about a grant program administered through Thurston Strong — Thurston County’s economic recovery task force.
“The grant from Thurston Strong allowed me to fill the deficit gap and purchase much-needed supplies to expand our school-age program,” she said. “As a result of the schools not going back in September, we opened a school-age program to assist those working parents with online learning and care.”
Since then, she has continued to adjust to make sure the business is staying within a tight budget to limit dipping into reserves. By September, they were able to grow back to 72 percent capacity, narrowing the gap.
Nationally, experts predict that 49 percent of childcare facilities in America will close by December 31. Much of the loss comes to those who lack the reserves necessary to fill the gap needed to run programs. Even before COVID, the deficit in childcare openings in the State of Washington was at around 27 percent. With another 49 percent predicted to close, this will put our lack of childcare for those wanting to get back to work in trouble.
McCarty said, “I am worried about that, along with the overall quality in general. Quality costs money. When there isn’t enough money, potential shortcuts can take place, leaving a lower health and safety concern as well as lower wages for employees and leaving our industry as a whole at risk.”
McCarty says that she will, “…fight the good fight and will mentor those that need help. I have trained nationally for over 20 years, teaching Directors of Childcare facilities how to manage. It is a job that is thankless much of the time. Those of us in the industry LOVE what we do and find the children and what we give daily our biggest reward. However, because of the stress our industry takes to run…I fear that many will give up and run out of resources without money.”
She also said that she is humbled by the grants she received, adding, “The new grants that just came out will further assist my business’s longevity and the longevity of many in our community. We all need to work toward growth for “full” thriving centers. I, for one, won’t let COVID beat me. My staff is committed to an ongoing fight for our facility to remain a vibrant helper in our community!”
