Your cost structure is written in O. Reg. 137/15
Most businesses design their cost base; a licensed centre inherits its own from a schedule in a regulation. Ontario's ratios set how many adults each room requires, so the wage bill, the dominant cost in childcare, is fixed by law relative to enrolment, and profit is decided by how well the mix of rooms carries it. Our Fractional CFO engagement starts by rebuilding the numbers at room level, because the centre-wide average is where childcare economics goes to hide.
| Program | Ratio | What it means for the room |
|---|---|---|
| Infant, under 18 months | 3 staff to 10 children | The costliest spot in the building, often below cost on its own at capped fees |
| Toddler, 18 to 30 months | 1 to 5 | Carries itself when full; fragile the month it is not |
| Preschool, 30 months and up | 1 to 8 | The margin engine that funds the infant room |
Seen this way, a centre is a portfolio of rooms cross-subsidizing each other, and choices about which programs to license, grow or wind down become portfolio decisions with numbers attached, including the RECE requirement that puts a qualified educator in each group.
Enrolment is the entire revenue model
With fees capped and funding following a formula, revenue per spot is close to a known quantity, which makes childcare unusual: forecasting is not about price, it is about fill. We track licensed capacity, enrolled children and actual attendance as three separate numbers, watch the part-time spots that fill fractions of a space, and treat the waitlist, which Ontario law says you cannot charge for, as the pipeline it is. Conversion from waitlist to enrolment, by program, is a number a centre can manage. Subsidized days under a purchase-of-service agreement add a payer whose approvals and attendance rules decide which spots are truly sold, so they get tracked as their own stream, not folded into the parent line. The September wave of preschoolers leaving for kindergarten repeats every single year, so the plan for backfilling those spots belongs in the spring, not the fall.
Staffing moves in steps, not slopes
Because the ratio is a hard line, the cost of one more child is either almost nothing or an entire educator. An eleventh infant does not cost an extra snack; it costs a new group with its own staff. That step function sits at the centre of every growth decision we model: break-even per room given its staffing step, when a room can absorb one more enrolment at no cost, and when saying yes to one family means hiring ahead of revenue. The same lens prices the RECE wage floor that rises each January, and the supply-staff pool that keeps you compliant on sick days without carrying idle hours all year. Casual rates, statutory premiums and the floater who keeps three rooms legal over lunch all belong in the loaded hourly cost we model from, not in a mental average of posted wages.
Cash timed to funders and paydays
A centre's cash calendar runs on three metronomes: payroll every two weeks, funding advances from the service system manager on their own schedule, and an annual reconciliation that can pull money back. We keep a rolling 13-week cash view with all three on it, alongside the exempt-business reality that renovations, toys and rent are paid with 13% HST embedded and unrecoverable, so capital plans are cash plans at their gross number. When the plan calls for a buildout or a second site, the case goes to lenders through Business Financing Advisory, argued from room-level statements a credit committee can actually follow.
The cadence, sized for one centre
The rhythm stays deliberately light: a monthly close by room on books kept through daycare accounting, a monthly enrolment-and-margin review, a quarterly funding and wage-grid check, and an annual budget built for reconciliation rather than surprised by it. Between those, decisions come in as they arise: whether the infant room earns its licence, what a new preschool group does to the whole portfolio, how a purchase-of-service change lands on next quarter's cash. For operators across Mississauga and the GTA, scope and fee are quoted in writing after a free 15-minute discovery call.
Source: Ontario — O. Reg. 137/15 under the Child Care and Early Years Act.
