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In our newly revised Exchange book, Managing Money: A Center Director's Guidebook, Robert Siegel offers a new way of looking at the business we are in....

"Over the years I have provided management training for child care directors on fiscal performance. One of the first questions I ask is, “What is your business commodity?” and then, “Give me a verb for what we do with it.” This generally perplexes a group of directors who want to answer, “We educate children.” In that case, is our commodity children? No, they do not belong to us. Educating children is one of the (many) services offered in our business, but it’s not our business commodity. Could it be that “we serve families”? Sounds like a dinner offering. . . but no. Again, the families are not our property to trade upon. In fact, each family is, in reality, the customer. Let me suggest that, financially speaking, we are in the business of leasing slots, which is not the generally acceptable way that we typically think about what it is we do.

"Given the challenges of operating a fiscally sound child care business, I recommend we begin to change the way we think about what we do — at least in financial terms. Look up at the state license on the wall and see where it states your legal capacity, telling you how many children can be enrolled at the same time. That number, in effect, has defined the maximum number of slots you can lease at any one time. Why call it leasing? The reality is that we don’t sell them. A parent makes a decision to enroll her child for a specified amount of time, which in effect means she has leased one of our slots. The more slots we can lease for the greatest number of weeks per year, the better."

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