First 90 Days After Buying a Child Care Center

Key Takeaways

Protect cash first: your thirteen-week forecast is the document that runs the quarter.
Stay visibly inspection-ready, because ownership changes often draw agency attention.
Watch labor hours weekly against the staffing grid, not monthly against the income statement.
Hold visible changes until you understand why the building works the way it does.
Compare actual results to your underwriting model every month and write down the variance.

Days one through seven: cash, compliance, and presence

The first week has three jobs. Keep the money controlled, keep the program lawful, and be in the building where people can see you.

Cash control means confirming that every dollar in and out runs through accounts you control. Verify the first tuition draft posts to your operating account, not the seller's. Confirm the merchant processor settled correctly. Check that no vendor autopay still points at a closed account, and that nothing important was set up on the seller's personal card. Reconcile the operating account daily for the first two weeks; it is tedious and it catches things that would otherwise surface in week six.

Compliance means walking the building as an inspector would. Posted license and capacity, current inspection reports where the state requires them displayed, emergency plans, allergy and medication documentation, immunization records, staff credential and clearance files, and playground condition. Playground surfacing, fall zones, and equipment spacing follow recognized public playground safety guidance (Source: U.S. Consumer Product Safety Commission, retrieved 2026) as well as state licensing standards, and a worn fall zone is one of the easiest citations to earn and to prevent. Accessibility obligations also apply to child care centers under the ADA (Source: U.S. Department of Justice, retrieved 2026), so note anything a parent or staff member with a disability would struggle with.

Presence means showing up at drop-off and pickup every day of that first week. Learn names. Say very little about strategy. New owners who spend week one in the office reading spreadsheets and week four announcing changes lose the room; new owners who stand at the door for five days and announce nothing buy themselves a quarter of goodwill. The relationship work is covered more fully in retaining staff and families after purchase.

Weeks two through four: get the numbers honest

By the end of month one you should be able to reproduce your own P&L without help. That usually requires cleaning up three things.

First, the chart of accounts. Sellers often run tuition, registration fees, late fees, and food program reimbursements through a single revenue line. Split them. You cannot manage collections if you cannot see what was billed versus what was collected, and the split feeds directly into tuition pricing and collections.

Second, the enrollment system. Verify that every enrolled child has a current agreement, a correct rate, a correct schedule, and a payer of record. Diligence rosters are snapshots; the live system is what bills. If your childcare management software does not produce a clean weekly report of enrolled children by room, contracted rate, and balance owed, fix that before you fix anything else — see enrollment software and reporting.

Third, the staffing grid. Rebuild room-by-room coverage against required ratios and group sizes for the ages actually enrolled, using the state's standards rather than a rule of thumb, because those requirements and their economic effects vary considerably (see ratios and group sizes and what they mean for economics). Then compare scheduled hours against the grid. The gap between them is your overtime and agency-substitute exposure.

A variance example worth running every month

Underwriting assumptions fail quietly. Force them into daylight with a simple monthly comparison. Suppose you modeled 74 children enrolled at an average of $1,290 per month, with labor at 47% of revenue.

Line	Underwritten	Month 1 actual	Variance
Children enrolled	74	71	(3)
Average monthly rate	$1,290	$1,268	($22)
Tuition revenue	$95,460	$90,028	($5,432)
Collections rate	98%	94%	(4 pts)
Cash tuition collected	$93,551	$84,626	($8,925)
Labor cost	$44,866	$47,910	$3,044
Labor as % of revenue	47.0%	53.2%	6.2 pts

The enrollment miss of three children is small. The collections miss is not: four points of uncollected tuition on this base is roughly $3,600 in month one, and it compounds if the cause is a broken autopay migration rather than a handful of struggling families. The labor overage of $3,044 usually traces to one unfilled position covered with overtime. Together, the cash-collection shortfall of $8,925 and that labor overage move about $12,000 in a single month — enough to matter against a loan payment.

Diagnose each variance to a cause, not a category. "Collections were soft" is not a cause. "Eleven families were never re-authorized in the new payment system after the merchant account changed" is a cause, and it has a fix you can execute this week.

The thirteen-week cash forecast

Monthly financials arrive too late to prevent anything. Build a thirteen-week forecast in a spreadsheet the week you close, with one column per week and rows for tuition receipts by billing cycle, subsidy and food program reimbursements with their actual payment lags, payroll by pay date, rent, debt service, insurance, and one line for the deferred repairs you already know about. Include the exact dates, not monthly averages, because a month with three pay periods is the month that breaks people.

Two rows do most of the work. Subsidy and reimbursement timing is the first: those payments arrive on an agency schedule, not yours, and a lag you did not model becomes a payroll problem. Debt service is the second, particularly if your loan carries a short interest-only period that ends inside your first year. Update the forecast every Monday with what actually landed, and keep at least one week of rolling cushion visible. The moment that cushion disappears, you have found a real problem while it is still small.

Days 31 through 60: fill the room that actually pays

Once cash is controlled and the numbers are honest, turn to enrollment. In most centers a small number of specific vacancies drive most of the gap — often infant or young toddler spaces, because they carry the highest rates and the tightest ratios.

Work the sequence in order. Call the existing waitlist and find out whether it is real; inherited waitlists are frequently stale. Check whether any room is capacity-constrained by staffing rather than by licensed capacity, since hiring one qualified teacher can open revenue faster than any marketing spend. Audit your inquiry response time — many centers lose families to whoever answers the phone first. Only then spend money on demand generation, guided by marketing and parent acquisition.

This is also the window to complete any program-level registrations you deferred through closing: food program agreement under the new entity, subsidy provider enrollment, and quality rating participation. Quality rating systems are state-administered and an ownership change can affect a center's standing or require re-rating, which in turn can affect rates and parent perception — review QRIS ratings and transactions and confirm your state's treatment directly with the agency.

Days 61 through 90: make one durable improvement

By day sixty you have watched the building long enough to have an informed opinion. Pick one improvement and finish it rather than starting five.

Good candidates are the ones that pay recurring dividends: a reliable substitute bench so a single call-out stops generating overtime, a clean billing and late-fee policy consistently enforced, a documented opening and closing routine, or filling the one role whose absence forces everyone else to cover. Weak candidates are the visible ones — new signage, a rebrand, a curriculum change — which cost goodwill and money without touching the economics.

Then run your first real board-style review with yourself. Three months of actuals against the model, the thirteen-week cash forecast refreshed, the staffing grid versus scheduled hours, licensing status, and enrollment by room. If something in the underwriting turned out to be wrong, write down what and why. That record is what makes your second acquisition better than your first.

Practical guardrails for the quarter

Do not change tuition in month one, whatever the model said.
Do not terminate the director in the first sixty days without an alternative who can hold the license-required role in your state.
Do not let a corrective action plan inherited from the prior owner lapse; confirm in writing what remains open.
Do not defer the fire, health, or playground item you noticed during diligence — it becomes a citation with your name on it.
Do not run payroll without checking hours against the grid first, every single cycle.

Frequently asked questions

What should I change in the first week?

As little as possible that families and staff can see, and as much as necessary behind the scenes. Cash controls, banking, payroll, and compliance documentation need immediate attention. Curriculum, schedules, room assignments, and tuition can wait until you have watched the building run for a few weeks and know why things are the way they are.

How much working capital should I expect to use?

Enough to cover payroll and rent through the gap between your first payroll and your first full tuition cycle, plus the deferred items diligence found, plus a buffer for attrition. Build a thirteen-week cash forecast from your own numbers rather than a rule of thumb, and update it weekly.

Will the licensing agency visit after the ownership change?

Often, yes, though the trigger and timing vary by state. A new license, an ownership change, or a new director can each prompt a visit. Treat the first ninety days as inspection-ready at all times: posted documents current, files complete, ratios covered, and corrective actions from the prior owner closed out.

When can I raise tuition?

Not in month one. Read your enrollment agreements for required notice, check what the purchase agreement permits, confirm any subsidy or contract-rate constraints, and only then plan an increase with clear notice. Raising rates before families trust you is the most expensive thing a new owner can do.

What is the most common first-quarter surprise?

Labor cost running above the model. It usually comes from overtime covering an unfilled position, substitute agency rates, or a floater the seller's payroll summary never showed as a separate line. Track hours weekly against your staffing grid, not monthly against the P&L.