There's such a shortage of affordable, high-quality childcare in Missoula and Montana that sometimes people spend years on a wait list, then decide to get pregnant only until after they know they've been accepted at their preferred facility.
A pair of Montana entrepreneurs believe they’ve come up with a business model that will empower women to pursue good careers, earn a great wage, stay in the workforce and help alleviate Missoula’s affordable childcare availability crisis. And investors are convinced they've got a good idea, too, as they recently secured $5.95 million in venture capital, the largest seed funding round in Montana history.
Co-founder and CEO Erica Mackey and her business partner, Elizabeth Szymanski,founded MyVillage, a company that helps people start childcare centers in their home and run them successfully.
In exchange for a franchise fee, the company handles all the back-end business headaches that afflict small business owners, such as liability insurance, government licensing, marketing, software, scheduling, accounting, billing, records and client communications. They also provide childcare-specific resources such as curriculum options, local mentors, food recipes, time management, financial consulting and shared best practices.
“We allow them to focus on what matters,” Mackey said. “Spending time with the children they’re caring for.”
And Mackey says running a home childcare business caring for just six kids at a time, full-time, can earn someone around $65,000 a year in Montana.
“MyVillage is blowing up the franchising status quo so that more people — especially women — can earn a great living while providing high-quality, licensed, affordable childcare using their own homes as places of business,” she explained.
A recent survey by the Missoula Area Chamber of Commerce found that child care costs are astronomical in Missoula, because those businesses have lots of labor and real estate expenses. Running a childcare business in the family home drastically decreases the cost of running the business, so if more people did that it would bring down prices for people who desperately need to find affordable childcare.
In Montana, the number of licensed family and group home daycares has grown from 302 in 2010 to 612 this year, but many people say there isn't enough in Missoula to keep up with the population.
“I had hundreds of conversations with people who run home-based childcare and preschools, along with nannies and sitters,” Mackey explained. “I noticed some trends and pain points.
"People got into it because they were passionate about working with kids, but they had to close their doors because they couldn’t figure out how to make the business side work. It can be very challenging to run the front and the back of the house while providing phenomenal childcare for eight to 10 hours a day. Also, there’s not a whole lot of appreciation. They’re not treated like a professional.”
Mackey said that according to the Center for American Progress, 51% of Americans live in a “childcare desert,” which refers to any census tract with more than 50 children under age 5 that contains either no child care providers or “so few options that children vastly outnumber licensed childcare slots.”
In Montana, 60% of people live in childcare deserts, with childcare supply especially low among rural and low-income families living in areas without enough licensed child care providers.
The Missoula Area Chamber of Commerce found that child care costs in Missoula are so high and wages are so relatively low that it often doesn’t make financial sense to place a child in daycare in order to go to work.
“Once you get past one child, it doesn’t make sense to continue working unless you’re making a really high income,” said Clint Burson, the Chamber’s director of government affairs.
The pre-tax median household income for two adults in Missoula is $41,968, he said, while the income needed to afford basic expenses is $57,661. That includes $7,650 per year in child care expenses, on average.
Both Mackey and Szymanski have young kids, and they said finding high-quality, affordable childcare that didn't have a years-long waiting list was extremely frustrating for them. Both are serial entrepreneurs — Mackey ran a solar power startup in eastern Africa before moving to Montana — and they decided they could use their acumen to solve this widespread problem.
MyVillage's recent seed funding round of nearly $6 million in venture capital was mostly from private equity firms that had never invested in Montana or childcare before.
“Acumen America invested in MyVillage because it has the team, strategy, determination and moral imagination to challenge the status quo of child care in the U.S.,” said Catherine Casey Nanda, director of the venture capital firm. “The company has a scalable solution that will work in every state to solve the national childcare crisis.”
The company hopes to use the money to achieve market saturation in Montana and Colorado, the only two states where they operate.
Mackey lives in Bozeman, but there are two MyVillage franchises operating in the Missoula area. Mandy Willis runs Moving Mountains Early Learning Center. She said a MyVillage mentor encouraged her to start a daycare since she wanted to become a mother and spend as much time with her kids as possible.
"I knew I wanted to continue to work and stay at home, so this is a great balance," she said.
Willis is licensed to care for infants ages 0-2, so she can have four at a time in her care. She charges $900 a month and there is a waiting list to get accepted.
"There is a major lack of infant care in Missoula," she said. "There's an extreme wait list. It's really hard to come by, care for infants and toddlers specifically."
She said she's been "absolutely" happy with the support and guidance provided by MyVillage.
"It's a great opportunity for extra support and resources," she said.