What's Your COVID-19 Business Plan?



Before I begin, let me say that I am empathetic to the owners and employees of preschools during this time because I owned a couple of preschools during the great recession.  Most preschools are also small businesses that rely on parents and governments to pay fees based on attendance.

Typically, if a preschool is not open, both parents and governments will not pay child tuition.  There are short-term exceptions to these rules, however, an extended closure of a preschool or childcare center means that no revenue will come in; as a result, employees and business expenses cannot be paid.

For me, I always carried "business interruption" insurance which provided funding for both my payroll and business profit during disasters and national emergencies.  I only invoked my "business interruption" insurance once during the time I owned preschools and it was during an ice storm that paralyzed the city.

Many small business owners are, typically, unable to claim unemployment because many of them do not draw pay from the business payroll as an employee; many owners take an "owner's draw' or " owner's distribution" instead.  Having gone through a significant financial downturn while owning a preschool, I can say that it will be very difficult. 

The COVID-19 situation is different than the great recession but is onsetting suddenly and uniformly and, as a result, cash flows for many preschools could face significant short-term disruption.  Here are some actions that I would take in the short run:


  • Trigger the provisions of my "business interruption" insurance policy.
  • If the government requires your preschool to close or if the census grows so low that it's not currently cost-effective to be open, I would be decisive and close immediately. I would have my employees claim unemployment and provide any financial relief I could for my employees. Staying open longer will only increase your debt load.
  • Communicate with parents and employees regularly and openly as to the operating status of your preschool and when/if you plan to re-open.
  • Re-tool! Look at your expenses and operations and, decide where you may have both savings and growth opportunities when you re-open.
In addition to our real-time backup staffing technology, Enrollsmart is a full-service preschool management system and we provide our clients with a professional website template under a single service bundle that allows preschools and centers to meet all of their needs at hundreds of dollars less per month than any other preschool technology available. Contact me at jimshields@enrollsmart.net to learn more about what we offer. 

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