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How a mother of eight built a daycare empire Add to ...

As an entrepreneur and mother of eight, Victoria Sopik, 49, easily understood the needs of working parents when she co-founded Kids & Company Ltd., a Toronto-based childcare provider, in 2002. But she also had an idea of how to turn high-quality childcare into a profitable business, generally considered impossible given the cost of proper staffing, toys and equipment.

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Her unique approach asks companies to pay to be corporate clients so that profit doesn’t have to come from the childcare centre’s operation. In return, Kids & Company guarantees full-time, part-time and emergency back-up childcare to the employees of those companies. The age range covers babies up to 12-year-olds and includes before and after school programs. The centres also offer perks such as a professionally designed fitness program for kids, called Munchkinetics, as well as art, music, French and sign language (for infants). Plus, anxious parents can log onto a secure website to check on how their kids are doing from anywhere in the world.

The formula has been a winning one for Kids & Company, as well as their corporate clients, parents and the kids. Over 11 years, the’ve grown from a single childcare centre with two employees to 50 centres coast to coast across Canada with over 1,000 employees. This year’s revenue are on track to reach more than $50-million, says Ms. Sopik. Due to demand from clients who have branches in the United States, Kids & Company will open its first American centre in Chicago this summer and plans to continue its expansion into New York, Boston and other major U.S. cities.

Question: What’s your strategy for deciding where to set up childcare centres?

Answer: We have a few centres that are specifically on the campuses of a particular employer, like the Ford site in Oakville, but our strategy is more like Good Life Fitness where they open up fitness facilities anywhere they think people would come to them and then you have to have a membership. What we do is build child care centres in places where we think parents want to use them. Then if the company becomes a corporate client, their employees can access those centres. When we opened up in Halifax, we went to the local hospitals like IWK Health Centre children’s hospital and Dalhousie University and asked if they wanted to be a client if we opened up a centre there, and they said yes. We kept asking companies if they would like to be a client and got more and more clients. It’s very low cost for a company to become a client [$5,000 annually for the whole company if you’re only located in one city and $10,000 nationally], so it’s pretty easy for companies to decide to become a client. We have hundreds of clients. Their employees have a guaranteed space. We don’t have waiting lists.

Who pays for the actual childcare?

The individual parent.

Was that the business model, right from the start?

Yes. The only difference was at the beginning, our focus was more on backup childcare – that’s childcare that’s available when your regular childcare is not. We still do that but parents asked us to do full-time childcare. What also morphed from full-time childcare is something called flexible childcare, which is care that’s available when parents need it. For example, if you were a nurse and worked eight days a month, you could come to us for child care on Monday, Tuesday one week and Thursday, Friday the next and maybe three days the following week. It doesn’t need to have any rhyme or reason. That really helps parents because nobody else does that. Often parents have flexible careers – maybe a police officer married to a nurse – so they cover child care for each other part of the time, or maybe grandma or a nanny does some. We find that many families don’t want the traditional five day a week childcare.

Is it difficult to adjust to what parents want?

No,we figure it out. We’re very technical and have lots of software with scheduling and attendance programs so we can make it work.

How do you know what they want?

We do massive surveys with our parents to determine their needs. One of the things that came up through our focus groups was that families didn’t have access to night-time baby sitting so we started a thing called date night which is free for our families. Three times a year, we’ll open up our centres so parents can go on a date and we pay our teachers time and a half to stay later. Parents are thrilled with that.

When did you become a working mom?

I’ve always had a business. I started a business – a summer camp – when I was 17 years-old. I got married at 20 but people got married earlier then. It wasn’t unusual. My husband and I were just finishing university and wanted to live together, so we got married. It worked for us but I encourage my kids to live together first.

You’ve experienced very rapid growth since you opened, but posted a seven-figure loss in 2007. Is the company profitable?

We’re definitely profitable now. We make our profits from our corporate clients. It’s very tricky to run a high-quality child care business and have the business itself be highly profitable because then you’d be taking money away from the needs of the children. We developed our growth and profits through our corporate relationships.

What have been your biggest growing pains?

Just making sure we’re opening centres in the right locations, hiring the right staff and that the marketing efforts are working with our corporate clients. It’s a constant battle to stay on the right track. My business partner Jennifer Nashmi and I are lucky that our partnership has worked out. We have complimentary skills and delineate duties in the business. We’re very good at letting one person do one thing and not be jumping in on the other. We’ve also chosen right for investors in the company.

Why did you and your partner decide to accept capital investment from an angel investor?

We needed capital to grow, When you start a business, it’s very difficult to borrow from the bank when you don’t have a tried and true product or profit. We did it pretty early on, about 2005. Jennifer has three children and I have eight so we had limited personal resources. We still have the same investor, a high net wealth individual and a number of other individuals who’ve invested their personal money. That’s been the right fit for us because they haven’t been anxious to sell the company in any way. They think it’s a great investment. They’re happy. Now we have a very good relationship with our bank and lots of access to capital to grow.

Are unions an issue for you?

We’ve been unionized with CUPE for five or six years now. Child care teachers, just like those in the school system, like having greater job security and an organized pay scale. It’s also been good for us in terms of attracting employees. Teachers like to work in a union environment.

What’s your advice on handling the kind of rapid growth you’ve had?

Be confident but careful, and really understand your competition. Lots of times people go into business and just consider what they think is the right thing to do. But you have to figure out what your competition is doing and figure out if people like it or not.

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