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Maureen Conway, Executive Director of the Economic Opportunities Program, recently sat down with two Shared Success grantees—Jataune Hall, Director of Special Projects and Partnerships at Micro Enterprise Services of Oregon, and Lamont Jackson, Director of Technical Assistance, Black Business Investment Fund—to learn more about the challenges of and opportunities for small business childcare providers. The critical service childcare businesses supports the entire family, community, and workforce. Low job quality in the childcare industry has negative impacts on the childcare workforce, which is overwhelmingly female and disproportionately women of color, on childcare businesses, which struggle with turnover and staff training costs, and on the availability and quality of care in a given community. In the absence of a national policy, Shared Success grantees like MESO in Oregon and BBIF in Florida are leading the way.This interview has been edited for length and clarity. Listen to the full podcast interview here. 

Maureen Conway: Welcome Lamont, Jataune. Thank you so much for joining me to talk about Shared Success and how to build job quality into small businesses generally, but in particular, childcare businesses. Jataune, why did you all choose to focus on childcare in your job quality work at Micro Enterprise Services of Oregon (MESO)? Jataune Hall: We work with several different entities and businesses, but we chose to focus on the childcare industry because there’s so much need around that area right now. In Multnomah County, Oregon, we have a program called Preschool for All, and they’re providing additional taxpayer funding to really pour into the childcare need because we know it’s needed, especially for essential workers—if you don’t have somewhere you can take your kids, you’re not going to work, and you want an establishment that can really meet the needs of your child in order to feel confident leaving them for nine hours a day. There was a very urgent need to really pour into the childcare providers and for them to understand that they are a business in addition to being selfless caretakers, and they must also follow protocols to be successful and create the best environments for the kids. And for you, Lamont, at the Black Business Investment Fund, how did the focus on childcare come about?Lamont Jackson: One of the things that really kind of drove us to focus on childcare early on was that we were noticing 10 to 15 years ago that most of the businesses that were coming to us for loans were childcare providers and there was explosive growth in childcare providers in the Central Florida community. We assessed our monthly client meetings by industry, and childcare daycare is our biggest group of clients. We were also able to connect with some of the organizations that provide ancillary services to childcare providers like serving as the Early Learning Coalition (ELC), and the Distance Learning Institute (DLI), which serve as training vehicles and resource partners that help our childcare workers grow their business and tackle industry challenges.When you start to segment how you provide services to business owners, especially from a technical assistance standpoint, you want to understand how to drill down to what is really specific for the business and connect it to the industry. As we started to build these relationships with the ancillary service providers, we saw significant growth in that industry, and the majority of those owners were Black women and other minorities.Jataune, how did you think about the importance of supporting childcare businesses in the context of the broader business community?JH: Similarly, we’ve seen a lot of growth. When we started with childcare, we had around 40 or 50 clients. Today, we have nearly 100 clients in the childcare industry.   We had to step back after reviewing and evaluating the clients that we have been serving under our contract, to understand their needs, but then there was still a huge knowledge gap for those who want to start in the childcare industry with what to do and how to get started. That led us to open up our very own MESO Child Care Business Academy, where through a six-month cohort, we now can walk someone who is brand new in the industry through what it means to be in the world of the childcare business. By the time participants finish the program, they are expected to be up and running their business, which now feeds into the Preschool for All pipeline, which is constantly in need of more providers. Childcare is not going away. We can make sure the new providers coming into the industry are on the same playing field as those who have operated in the industry for more than 20 years, with an understanding that it’s about your desire to help kids grow and make an early impact on them. That’s what makes it worthwhile for us. Can you share more about what I imagine must be a challenge in that childcare providers are doing this for noble reasons, to serve families, but also must succeed as a business? JH: We start at the beginning. In order for you to say you’re a business, you should be licensed as a business with the state and have a separate bank account, which allows you to be taken seriously for a loan application. From there, it’s about understanding what it takes to scale if that is what they want—though not every business wants to grow and would prefer to remain in-home child care. We offer “each one, teach one” opportunities for providers to share with up-and-coming providers how they’ve scaled from running the business out of their home to a separate center with staff and support, which requires more capital but can be passed down as a business to their own children or grandchildren. We also have providers share their experiences and challenges directly with state regulators who are making decisions, so policies are informed by the real-world experiences of those providing care. What do you see as the particular job quality issues in the childcare industry? What can be improved?LJ: Childcare businesses experience heavy turnover of staff. Often that is because staff receive low pay and no benefits, so we have conversations with childcare businesses around how they might provide benefits and higher pay. We also talk about what the developmental path can be for their staff to improve their skills leading a classroom, and what their professional growth can look like at the organization. It’s about becoming a better business owner. One of our clients started out with us with a $15,000 microloan about eight years ago but had reached a point of frustration where she almost quit. We worked with her to go from being a good care provider to being a good business owner, which can remove stress, and now she has expanded to three locations. JH: Very similar to Lamont, we put our HR hat on to help them understand procedures and dive into some of the issues that we’re hearing providers say that they have. Financing is one of the most challenging aspects. A lot of traditional lenders have a very hard time funding childcare businesses because of their structure. It becomes complicated, especially if they’re in-home, and they want to do repairs to the home that they own, and a lender looks at it as not really a business because it’s out of your home. For a CDFI, we can fund it, but we need to make sure the business is stable. We spend time to ensure they have their financials in place, above-board payroll, and how money is being spent or will be spent. In evaluating their loan application we work with them to understand what makes sense. Sometimes, they just need parents to pay what they owe. Sometimes, they only need a smaller loan amount. Is there anything else you would share with other CDFIs from your focus on job quality? LJ: One of the critical things is to make sure that childcare providers understand that this is a business, which requires understanding how you’re going to provide your service, who you need to bring on to enhance your ability to achieve your mission, and how you’re going to evolve and elevate your employees to give your business staying power.  JH: I love that. I would add the importance of having a pathway for your employees. Employees want to be heard. When an employee is not heard, they feel isolated and disconnected, and they question why they are with your business. By providing them with opportunities for their voice to be heard, they can be a part of the change that happens within the organization, and it makes them more invested and retains them as employees.I love how you both, in different ways, talked about the need to engage and listen to employees, and how that can be a strategy for growth. Thank you both so much for the important work you do in your communities.The Shared Success Demonstration is managed by the Aspen Institute’s Economic Opportunities Program and supported by a four-year investment from the Gates Foundation. See as.pn/sharedsuccess to learn more. Views expressed here are based on the implementation, experience, and findings of the Shared Success demonstration, and do not necessarily reflect positions or policies of the foundation.

About Shared SuccessShared Success

, a project of the Economic Opportunities Program, works with community lenders to integrate job quality programming into their small business support services, demonstrating that improved job quality can support the needs of employees while helping small businesses succeed.

About the Economic Opportunities Program
The Aspen Institute Economic Opportunities Program hosts a variety of discussions to advance strategies, policies, and ideas to help low- and moderate-income people thrive in a changing economy. To learn about upcoming events and webinars, join our mailing list and follow us on social media.