Key Takeaways
- Licensed capacity is a legal ceiling under stated conditions, not proof that every slot can be staffed or sold.
- Use paid full-time-equivalent enrollment rather than a raw child count when schedules share slots.
- Weight tuition by age, schedule, payer, discounts, and actual realization.
- Reconcile subsidy service months separately from cash-receipt months.
- Test classroom constraints because an 80% site average can conceal an infant waitlist and empty preschool rooms.
How the calculation works
The calculator multiplies capacity by occupancy to estimate average paid enrollment, then multiplies that enrollment by weekly tuition and billable weeks. It produces a clean gross tuition run rate, but intentionally excludes registration fees, meals, transportation, late fees, refunds, bad debt, and operating expenses.
| Input | Use this evidence | Do not substitute |
|---|---|---|
| Licensed capacity | Current license and approved room configuration | Marketing capacity or design drawings |
| Paid occupancy | Invoice-backed average FTE enrollment | Peak attendance or raw registrations |
| Weekly tuition | Weighted realized rate by cohort and payer | Highest published rate |
| Billable weeks | Contracts and operating calendar | Automatic 52 weeks if closures are unpaid |
The 80% field value is only an editable illustration. It is not presented as an industry benchmark. Replace it with the center's verified average for the same period as the tuition and calendar inputs.
Define enrollment before measuring occupancy
Enrollment can mean signed children, active accounts, scheduled seats, daily attendance, or paid full-time equivalents. Those measures answer different questions. Transaction analysis should define the numerator and denominator in writing and apply the definition consistently across periods.
A child attending two days and another attending three days may fill one weekday slot if schedules align, but the center still has two contracts and two family relationships. Conversely, two part-time schedules that overlap can consume two licensed places. Build the calculation by classroom and daypart when schedules are material.
The denominator also needs care. A license may allow a total number of children while room dimensions, age-specific ratios, restroom access, outdoor space, fire approval, or available teachers create a lower operating capacity. Use the binding constraint for forecasting, while preserving the legal licensed capacity as a separate fact.
Build a weighted tuition input
Published tuition is not necessarily realized tuition. Weight the actual billed amount for infants, toddlers, preschool, school-age, full-time, part-time, employee discounts, sibling discounts, scholarships, and payer arrangements. If registration fees or annual supply fees are recurring and collectible, model them separately instead of blending them into a weekly rate that another reviewer cannot trace.
Subsidy-heavy centers require service-month analysis. Agency remittances may arrive after care is provided, and family copays may follow another collection pattern. Match authorized children, attendance, claims, adjustments, denials, and deposits. A cash-basis month can look weak or strong merely because the payment calendar shifted.
Why classroom mix matters more than one site percentage
Sitewide occupancy is a useful summary but a poor staffing plan. Age groups carry different ratios, group-size limits, tuition, room sizes, teacher qualifications, and demand patterns. An infant classroom at capacity cannot automatically absorb preschool demand, and an empty room may require licensing or build-out work before its use changes.
| Review layer | Question | Transaction implication |
|---|---|---|
| Center | What is average paid occupancy? | Frames the revenue run rate |
| Classroom | Which rooms constrain growth? | Reveals sellable versus theoretical capacity |
| Weekday | Are part-time schedules complementary? | Tests whether headcount uses slots efficiently |
| Payer | How much comes from private pay and subsidy? | Changes realization and receivable diligence |
| Cohort | Will children age into another room? | Exposes near-term capacity and retention risk |
Calculate at each layer, then reconcile the sum to invoices and the general ledger. If the classroom build does not match recorded revenue, find the definition or timing difference rather than forcing the model.
Convert the run rate into a diligence schedule
For each month, preserve beginning enrollment, starts, withdrawals, ending enrollment, billed tuition, credits, subsidy claims, cash received, and aged receivables. Tie child-level records to the ledger without circulating unnecessary child or family identifiers. Redacted identifiers can support confidentiality while maintaining reconciliation.
A waitlist is evidence only when it is current, age-specific, de-duplicated, permissioned, and linked to expected start dates. It is not earned revenue. Similarly, a signed enrollment for a future start belongs in a forward schedule, not historical occupancy.
Common mistakes
- Dividing enrolled headcount by licensed capacity without adjusting part-time schedules.
- Applying the highest infant rate to the whole center.
- Treating agency deposits as the service month that generated them.
- Assuming every licensed slot can operate with the existing staff and rooms.
- Counting registration fees in weekly tuition and again as ancillary revenue.
- Forecasting waitlisted families as certain starts without timing or conversion evidence.
Frequently asked questions
Is licensed capacity the same as enrollment?
No. Licensed capacity is the maximum authorized under defined conditions. Enrollment is the children contracted or attending, and paid full-time-equivalent enrollment may be lower.
Which occupancy percentage should I enter?
Use average paid occupancy for the period being modeled, supported by invoices and rosters. Do not use a single peak day, raw registration count, or unverified waitlist.
How should part-time schedules be handled?
Convert schedules into a consistent paid full-time-equivalent measure or calculate each schedule separately. A headcount can overstate revenue capacity when children share slots.
Does the result include subsidy revenue?
Only if the weighted weekly tuition input includes verified subsidy reimbursement and family copay amounts. Reconcile service months, attendance rules, denials, and payment timing separately.
Does this calculator estimate profit?
No. It estimates gross tuition run rate before payroll, occupancy cost, food, supplies, insurance, bad debt, discounts, capital spending, and other expenses.
How can a buyer verify tuition revenue?
Tie classroom rosters to signed contracts, billing-system exports, subsidy authorizations, deposit records, bank activity, and the general ledger by service month.