Tom Callahan
- Mar 1, 2021
- 10 min read

Change the way you manage your waitlist, and improve the health of your daycare business.

Effective waitlist management is essential to the success of any childcare business. Yet many daycare operators admit that managing their waitlist is an onerous and time-consuming task. Building a better system is an important step to building a more successful and profitable daycare business.

Waitlists are the lifeblood of any daycare business. They represent potential future demand in an industry where customers age out of the market in less than five years. While most daycare managers know this, many of them also report feeling a low-level sense of dread when they think about managing their waitlists. Experienced daycare managers have described waitlist management as “a beast,” “a monster” and a process managed through a chaotic blend of logic and intuition that often resides within a single individual’s brain.

When I purchased a local daycare business after a career as a successful entrepreneur, the way the center director managed the waitlist was one of the first things I noticed. It simultaneously impressed and terrified me. Center directors I have spoken to have described to me processes that involve multiple spreadsheets, binders, Post-it notes and working memory.

As I learned more about the industry, I realized that daycare operators could greatly benefit and improve their businesses by changing the way they view their waitlists. By taking cues from the business world and using concepts that sales teams have adopted to generate and manage leads, daycare operators can deliver an experience for parents that more closely mirrors the purchasing environments they are becoming accustomed to in other industries. In the process, operators can also turn the waitlist into a more integrated part of their business that can feel less like a burden and more like a dynamic tool for growing the health and profitability of their business. All of this helps them spend more time and resources improving the quality of care for children.

My team has put a lot of time into building tools that make waitlist management simpler, easier and a more integral and informative part of daily business operations. It’s part of the set of problems we are trying to solve as we have built the Child Care Seer software platform. Along the way, we’ve developed a set of principles that have guided that work. I believe these concepts can be a guide to improve the way any modern daycare manages its waitlist.

The waitlist is a tool to help build your business

At heart, every business in the world is doing the same thing: matching supply to demand. For daycares, the waitlist is a tangible representation of unsatisfied demand. So the more an operator knows about her waitlist, and the more she is able to view trends and other future needs through the waitlist data, the more that waitlist becomes an effective tool to help plan hiring, scheduling, purchasing and other business moves that can help optimize that center’s profits.

Center directors I have hired to work at Callahan Learning Centers—many of whom have extensive experience at daycares of all sizes in busy markets—have told me repeatedly that one of the biggest obstacles to effective waitlist management is the fact that all of the data rarely resides in one place. And if one person knows the ins and outs of the various spreadsheets, binders and mental notes that comprise the waitlist, the thought of that person not being available when a question comes up can be stressful.

Managing and gleaning information from the list can also take an inordinate amount of time that takes center directors away from other important duties. One member of my team told me that at previous centers she’d worked at, there were times when she would spend an entire day going through the waitlist, seeing which parents were ready for a spot and when they could start. But when her building was full, she hardly touched it—there were just too many other things to be done. This inconsistency is not only inefficient, it also prevents the waitlist from becoming a valuable analytic tool that can help operators see trends and prepare their business to capture demand that is coming.

Imagine if the data from your waitlist could be organized and visible alongside your classroom rolls, signaling which families wanted space in the near future and what specific days and times they needed. You’d be able to plan better, to communicate with your families better and ultimately respond faster to the ebbs and flows of demand in your community.

Some of the best center directors I have talked to say waitlist management should be approached in a methodical, scientific way, because it is ultimately where you build your business strategy. Families move, children age out and things change rapidly in this business. That’s why having a grasp on what is coming in the door is crucial to any operator’s sustainability.

I have turned to the science of software programming to solve this problem through the features my team is building in Child Care Seer. That’s not just a product of my background as the CEO of a successful manufacturing business. It’s a reflection of the fact that families’ childcare needs are so complex that it is nearly impossible for the human brain to solve this problem without help from programming tools. Providing services that respond to that complexity in precise ways is key to building stronger childcare businesses, but it isn’t easy—and that’s why most childcare waitlists are chaotic.

All of today’s consumer-facing businesses are finding they must offer more customized solutions to individuals’ wants and needs in today’s world, and that is why software is driving so much of today’s business innovation. There is no reason we should not also apply this valuable tool to one of the most important services to the health of our economy and the future of our country—taking care of young children.

The waitlist is your first impression on potential customers

In the daycare business, the families who consider becoming our customers are trying to decide whether to trust us with their children and a significant portion of their money. It’s hard to think of two things in that family’s life that are more important. We must remember this in every aspect of our operation, but keep in mind that the first chance we get to demonstrate the quality of our operation is through the experience families have on our waitlist.

One of the first places to start improving that experience is to ask the question: Who should be on my waitlist in the first place? If a family needs space you don’t anticipate having for a year or more, does it make sense to take a deposit from them and put them on the list? The answer to that question depends on how competitive your market is, how large your daycare is and how transient your population tends to be. You should have a clear standard for when it makes sense to tell families they have a realistic chance of getting a spot in your facility.

For example, my daycares are near Washington, D.C., and the frequent movement of military families drives turnover in our business, meaning many of our best customers don’t get the opportunity to experience all the years of our service. But that also means spaces become open at irregular times with high frequency. So for a market like ours, it makes good business sense to add families to our waitlist, even when at first glance we may appear to be at capacity. If we didn’t have a list of families to offer our services to, we’d lose revenue every time a family transferred out of our area. Other communities may have less community flux to consider, or may have other large employers that drive growth or turnover.

Being able to set the right standard requires having a waitlist that you can look at and make a reasonable estimate of how long it will be before you can provide the kind of care a family wants. Center directors have told me that the biggest complaints parents have about their experiences on waitlists are the length of time they must wait for a spot and the uncertainty they feel when they have a deposit on the line and need care for their children. If you can manage your waitlist in a way that allows you to give parents more accurate information about how long their wait can be, you can build positive relationships with new customers, while also demonstrating that your center operates at a high level.

Smart daycare operators take cues from the world of sales, using customer relationship management, or CRM, software, to manage all of their families—from those who have just called in to inquire about availability, to the long-term customers. While there are great CRM software programs out there, few of them integrate with childcare management software, and many directors admit having CRM information separate from the waitlist, which is often kept in spreadsheets or binders. This can leave operators using multiple login credentials, or searching through multiple drawers or desks, to access all of the information they need to communicate with waitlist families.

At Callahan Learning Centers, we plan to implement a system in the next few months that will allow our center directors to look at a room and give a parent a range of time, such as 1-2 weeks, in which we expect to have space for their children. This system is made possible by the features my programming team has built into the Child Care Seer software. This not only helps the parent move forward with better information, but it also saves time for the operator, who can give this estimate with a single glance at the software.

If you think about services daycare parents are using in other areas of their lives, they are becoming accustomed to specific and dependable time estimates for when a product or service will be delivered—whether it’s package delivery, seating at a restaurant or the arrival of a hired car. By providing this kind of experience to potential families, daycare operators can present themselves as modern and highly competent businesses worthy of parents’ trust.

Effective waitlist management balances fairness and profitability

Why are daycare waitlists so complex? First of all, no two childcare providers are the same. Large centers attached to government or military installations may have to keep detailed records to show they are admitting children from employees of specific entities or working on specific contracts. Centers that receive grant funding may need to show that they have serviced a certain number of families paying with government subsidies. Some centers offer discounts for siblings, and some make it a priority to admit the children of their own employees. Nearly every center aims to be fair—and to ensure that families don’t feel others are jumping the line for reasons they don’t understand.

You can quickly see how this could create added stress for a center director. But while we are talking about all of the factors that should go into admitting families, let’s add another one that is often overlooked: How profitable will that family be to your center?

I fully acknowledge that may be an uncomfortable question for many in this industry to consider. But why is that? If you are operating a business, profit is the only thing that keeps you alive. It doesn’t matter how much people like what you do—if you can’t make money doing it, you can’t call it a business, and it won’t last long. That is unacceptable in the world of childcare, where demand currently far outstrips supply in pandemic-ridden communities. Working families need reliable and safe places for their children to be during the day, and children need healthy environments in which to spend some of the most crucial years of brain development. Our country needs daycares that are built to last.

So, in addition to sorting families by how long they have been waiting and all of the other factors you need to track, don’t shy away from asking yourself how profitable that family would be to bring into your center. Take the time to consider policies such as sibling discounts—not only can they leave you with lower revenue for a filled spot, but when a larger family leaves, there will be more empty spaces to fill—to make sure they support your business objectives. It is critical for a daycare operator to treat every spot in the center as the valuable resource that it is. Instead of using a somewhat arbitrary “squeaky wheel” or “first-in, first-out” approach to filling spots, operators can better serve their families, staff, business and community by adopting a more strategic approach.

The waitlist can help you develop a more flexible program that better matches the varying demands of modern families

My experience in the child care industry has convinced me that modern daycares must innovate by offering care options that go beyond the typical full- or half-time childcare arrangements. The road to creating a flexible childcare business that can sell hourly blocks of care customized to parents’ needs starts with the waitlist.

If managed effectively, the waitlist should allow an operator to more precisely match supply to demand. Collecting the right information from families when they are added to the list can let you see trends in market demand, identify where you have extra supply that could meet some of those specific demands and sell that supply at a rate that gives you more profit, the ability to pay teachers more and provide better care as a result.

This starts with letting parents tell you more about their needs than just checking a box for full or half days. Which days do they need care? Which specific parts of those days? When do they really want to drop their kids of and pick them up? Being responsive to these kinds of needs in a high-quality center setting will distinguish a center within its community.

In the years to come, this will increasingly be what daycares—and any business—must do to be competitive. Giving daycare operators these kinds of high-level business capabilities is a prime objective of the work I am doing with both Child Care Seer and Callahan Learning Centers.

The dedicated professionals who work in America’s daycares didn’t get into the business because they love managing waitlists. Their work is driven by their passion for children. But by adopting a more strategic approach to building and managing your waitlist, you can build a stronger daycare, create a better experience for the families you serve and start to cater more precisely to the needs of today’s working parents. These are wins for everyone, and they will ultimately give you more time and resources to put toward the goal that really matters—providing the highest quality care to children.

About Tom Callahan

Tom Callahan is a serial entrepreneur and seasoned executive with a track record of starting, growing and leading companies of all sizes. He is the owner of Callahan Learning Center, a Virginia-based child care management company that operates centers providing high-quality and highly flexible child care. He is the founder of Child Care Seer, an all-in-one platform that can make child care a more manageable and profitable business. He came to the child care industry after more than two decades in the software and technology industries, where he invented multi-million-dollar product lines and guided multiple startups from cradle to exit, including his last startup selling for over $200 million in 2019. Learn more about Child Care Seer at childcareseer.com.