338: How Can You Successfully Finance Your Childcare Center? With Dr. Mia Young

In this episode of Childcare Conversation, Kate and Carrie sit down with the amazing Dr. Mia Young, a 27-year education veteran who went from public school principal to childcare entrepreneur! Dr. Young breaks down the real financial journey of opening and expanding child care centers, including navigating SBA loans, building banking relationships, and what it actually costs to build a $57 million facility. She also drops gems about assembling an advisory board, using free SCORE and SBDC resources, and showing your staff genuine appreciation year-round. Grab a notebook, this one's packed! 

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Transcript

SPEAKER_03 0:00

Welcome to Childcare Conversations with Kate and Carrie. We are so glad that you guys are joining us today, and we have 5.7 million reasons why you need to pay attention for the next 20 minutes. I don't know about you, Carrie, but 5.7 million dollars?

SPEAKER_02 0:18

You said reasons. You didn't say dollars. 5.7 dollars is totally different than 5.7 reasons, because that could be 5.7 million blue bonnets. I don't know.

SPEAKER_03 0:28

Well, we are so glad to have Dr. Mia Young. And no, we are not related, but man, if I had a sister, I'd love it for the bee, Dr. Dr. Young. So, Dr. Young, I'd love for you to share with us a little bit about your background in early childcare before we got to the 5.7 million reasons you're on this call.

SPEAKER_01 0:48

Absolutely. And you are my sister from another mother. That's why we share the same last name. Hi, ladies, and thank you for having me today. It is an honor to be a guest on your platform, and we're gonna have some fun talking about those $5.7 million reasons. Not the blue bonnets, Carrie, but the $5.7 million. So a little bit about me. First of all, I've been in education for like 27 years. I know I'm only 18. How is that possible? I know, right? But I started out in public education. I was a middle school and high school English teacher, and I quickly worked my way up all the way to principal. And everything in education that you can think of, I did it. I never liked the little kids. I'm gonna be honest, until I had my first child. And now I'm interested, right, in the little kids. And I fall in love. I start, my husband and I, we started looking for child care options for our daughter, and we wanted Christian-based with academics. And we couldn't find it. Like we would find a Christian-based, but academics may not have been so, you know, stellar. Or we would find the academics, but we weren't allowed to mention the name of God. So we said, hey, when you can't find it, what do you do? You create it, right? And so 2015, we set out on a journey to open our first child care center. Now, I had worked for for one year, I stepped outside of public education and worked for a large franchise brand, a large, well-known. And it was there that I got this desire to have it look like them. But I didn't have the money to make it look like them. So 2016, we opened our school, almost 11,000 square feet, but that was done through a bill to suit. That was a blessing from no one but God. We met a guy who happened to be rich, and we told him what we wanted to do, and he built it for us. And we've been in that building since 2016. We turned 10 years old. And you're not going anywhere. No. We've been in that building 10 years. Come this October. It was built for us as a build-to-suit. So that started our childcare journey.

SPEAKER_03 3:13

Love that. Okay. So that started your journey. We've met other conferences, other, you know, influencers in the industry. We love having the voices of childcare on our episode. That's why we are the convert childcare conversations, right? We want to hear what other people are doing. One thing that you didn't tell us is where are you located?

SPEAKER_01 3:34

I am located in Orlando, Florida, home of the mouse. That's Kate's second house, is the mouse house.

SPEAKER_03 3:40

I'm very familiar with that. Um, you know, it's uh I call it that human trap set by the mouse. Um I have lived on and off in Orlando since I was five. I had grandparents that lived just north of Orlando and Ultimate. During COVID, I lived there for a couple of years. My youngest child went to college at UCF. So, anyway, we can be here all day and talk about that, but we're not gonna go there. Okay. So you're based out of Orlando, Florida. You had this lovely, awesome 11,000 square foot opportunity. And I'm not gonna say, you know, it was blessed to you, right? Like it was absolutely something that somebody knew your community needed, and it showed up. So let's fast forward the 5.7 million reason, million dollar reasons you're on the podcast today.

SPEAKER_01 4:31

Absolutely. So we it started in, so we built our first school through the built-to-suit in 2016. 2018, that same team that built our first school for us bought land to build the second school. And just like you mentioned, COVID then hit in 2020. And we never got a chance to get that school built. They held on to the land and just they got a little bit older because they're older gentlemen, and they told us we're not going to do it. And this was after years of waiting. So in 2000, this is what, 26, 2024, we said we are now positioned. Notice that, people, because we're gonna talk about that. We are now positioned to be able to do this ourselves. Can we buy the land from you guys? So they told us that they would give us the land, well, not give, let me be very clear, sell the land to us for $1.3 million, which is a steal in the area that we are located in, okay? And then we started talking with contractors about how much this would potentially cost. The contractor said, okay, it's going to cost you $3 million to build the building. So we're already at 4.3, right? And I was like, ooh, okay. So then that's before a playground. You got to get a playground, you got to get some tables.

SPEAKER_03 5:56

You're gonna have to switch that parking lot. I mean, I think the one that always blows my mind are parking lots. I'm like, it's a parking lot. You want what for a parking lot?

SPEAKER_01 6:05

Anyway, okay, go ahead. Absolutely, all those things. So now, playground. People have no idea how much artificial turf costs. So the playground is $200,000. And then, you know, we got to furnish it. All these things. Long story short, once we get to where we need to be, it comes up to I I go and ask for about $5 million. I initially partnered with the bank in Alabama. I'm in Florida. Why Alabama? Because I had done a separate deal with them, and it was not child care. It was actually a pediatric urgent care. That was my other life, okay? So they were going to do this deal, but they were like, you know what? There's some issues with your land, wetlands in Florida. Go figure. So they said, No, it's Orlando. It's a swamp. It's a swamp. We are swamp land for sure. So, long story short, they decided they didn't want to do it because they they're like, you need someone right there in Florida. Because of wetlands, you they were gonna have to look at the property ongoing. So they partnered me with a local bank, which is Valley Bank. I'm gonna give them the shout out. Valley Bank, they took on the project, and that's how it got to 5.7 million. And we can talk about how, because there's some additional fees that go into an SBA loan that people don't really know. They don't talk about that part. But one of those is contingencies because construction always costs more than you, something is going to happen. Yes, twice gonna take longer than you expect.

SPEAKER_02 7:38

Absolutely.

SPEAKER_01 7:39

I don't care how much you pray, something is going to happen. And that something will cost thousands. It's never like, oh, it's $5, right? No, that never happens. So you have a contingency and then you have what they call an interest reserve. Now, Kate and Carrie, this is a piece I want people to understand because I've heard it talked about where they're like, but how are you gonna make the payments? Because my construction will probably be between 12 to 18 months. Well, they're making the payments for me with that interest reserve. So my loan is an interest only during the construction period. Now I'm still paying for it, but I'm not physically writing a check. So they'll say, here's a line item. That line item will be $300,000. And every month we will pull your payment from that. So I'm not paying for it up front, but you know I'm paying for it, right? On the back end.

SPEAKER_02 8:29

How it's just like when you get a credit card and they say, no, you know, interest free for the first 90 days. That doesn't mean that if you haven't paid it off in 90 days, you don't have to pay, you know. Absolutely. Yeah. You're the same kind of thing that everybody is familiar with. They've heard about that.

SPEAKER_01 8:46

Yes, absolutely. So those are just things I like people to really understand because sometimes they'll get afraid, like, well, how am I gonna make payments when I'm not even making money? It's built into the loan for you.

SPEAKER_03 8:58

A little bit about that. Because I think one of the things, so some of y'all know and you've heard a little bit about my story, and I'm gonna pull in Carrie's story as well, because it works perfectly with this conversation. So back in the early 90s, um, I actually was a certified business analyst with the SBA. Over the course of the last 30 years, I've been a mentor with SCORE or an SBA Women's Business Development Center staff person. Like I've had my foot in the SBA door for most of the last 33, 34 years. Now, also what some of you may or may not have actually known is that Carrie actually turned a good old-fashioned Texas ranch, cattle ranch, into a real, no-kidden, neighborhood complete with elementary school and parks and houses and all of that. So we have a unique and kind of backwards on some levels, level of experience to come into this conversation. So we are excited to have somebody else in the conversation who understands a little bit about what's going on. Now, you mentioned that you had had a previous business loan that was SBA backed, which also sounds like you probably had a fairly good business foundation and that you had the infrastructure in place personally to be able to get this loan. One of the things that breaks my heart are folks who come in who don't even know their own credit rating and they don't have cash reserves to even handle their own personal finances during that build, during the construction. And, you know, the starting your first school is very different than starting the second one. Because the first one probably has enough money going to help a little bit with the second one. But if you're listening to this and you're thinking, oh, I'd love to do this, I love this story, this is inspirational. Right now, you have got to make sure that you have got your own finances in order. What you got all your ducks in order?

SPEAKER_02 11:00

And I think another thing to really be aware of, and we've talked about it a couple of times on the podcast before and in our books, is having relationships with banks that have your money. And if the only place you have your money is a big bank that has 5 million customers in your town, and your town only has 50,000 people, then it's really hard to have a relationship with that banker. So finding a bank where you can have a relationship, it can be a big bank, but it needs to be a big bank with a local focus because them having a relationship with you and being able to look and go, oh, look, look at all this money that's been going through this account. Like I can go back four years and see that they've been putting money into this account and taking money out of this account, and that you've kept a balance. That's what they want to see, is that some money is always there. And having that relationship with a banker makes it much easier when you need a loan. And if you don't want to do a built-to-suit as your first um thing, because you're like, five and a who's that's a lot of monies. I'm not ready to take that leap, then you can do uh, you know, renting a building in a strip, you know, part of a strip center or a residential house and you know, doing retrofitting of a residential house depending on the zoning, right? That's a whole other thing. So it doesn't have to be a six, seven million dollar thing to open a school. But you do have to have your finances in order and a relationship with a lender, in my opinion, unless you want to pay consultants a whole bunch of money to do this for you. And you can do that, and I'll take your money, and I bet Dr. Young will take it too. Like, we'll do that work for you, but it's much cheaper for you if you've already got that relationship, even if you need a consultant to help you through the process.

SPEAKER_03 13:07

Well, okay, so I'm gonna I'm gonna put a pin in that and come back to that. So, Dr. Young, how long had you been with the bank you ended up with? Had you been with them before? Or is this a whole so you had a whole new relationship, um, but you were referred by another banker.

SPEAKER_01 13:22

Exactly. That was the connection. I was referred by another banker. And if I could just back up a little bit in the conversation, because we opened the urgent care, that was a franchise, and that gave me more leverage because they're not, I was new to that. I'm in education and know nothing about the medical world, but they allowed me to be able to apply for this because of the strength of the franchise. So once I went through that process, I learned it. Because of course, you guys know there are two different types that are primarily two different types of SBA loans. The first one was that 7A loan, which Carrie, you were you're so right. There's so many paths that I want people to know they can take. You know, if you want to do a strip plaza, we our urgent care. I don't know if you guys are hearing feedback, but I think we're I'm having a little bit.

SPEAKER_03 14:16

Mia, can you turn your volume down?

SPEAKER_02 14:19

I'll put my head or I'll put my headphones back in. I just needed to charge them a little. Okay.

SPEAKER_01 14:24

Okay. So in the urgent care, it was a former ATT, just a big box. Now, as an urgent care, I need to have an X-ray room. I need six exam rooms. So I had to go in and build that out. Most people, if they want a child care center and they're not getting an existing one, even if it's in a plaza, there has to be work, construction that has to be done. So you can get a smaller SBA loan, a 7A for my project because I'm building it from ground up. That's a 504. That's a bigger SBA loan. But now the build to suit, that's a totally different. I pay no money for that. Right. That was built for me, and I'm renting that from them. I don't own that building. I just own the business. But that was, it cost me $30,000 to get into that build to suit, an 11,000 square foot school built for me. Now, I actually teach others who want to do this what it what they have to look like, what the package has to be before they even make a phone call to the bank. You get one time to make a first impression. Absolutely.

SPEAKER_03 15:33

And you can't go there. And if you are someplace and you already know, um, so have conversations with your S with your local bank, because not every bank does an SBA loan. Um, there are some um bank franch b bank companies, so Huntington Bank is actually one of those across the country that probably does more SBA loans than anybody else in the country, but they don't necessarily do child care and they don't necessarily do female businesses. So I will tell you that if you are a female coming to this, um they're gonna ask you about your significant other, and they are going to ask about their day job. So you need to just be mentally prepared that you are going to share everything and you need to know if you've got business partners or investors, you need to know about what their cash flow is, what their credit is. Like, this is an you're an under-the-microscope. So, like, yes, like Dr. Young said, you get one chance for a first impression, but right now you can make sure that you got your own credit cleaned up, that you are leaving money in your own bank account every month personally, and that you're building those reserves personally so that you can be part of the depot, the down payment. Like Carrie started working at 14, saved all of her pennies until she was in her early 20s because people are like, Well, how long, you know, what kind of loan did you get? She's like, I worked a job since I was 14 to start my program. Like there was a goal. So not everybody signs a note. Some people will put in the sweat equity, other people will put in years of penny pinching and saving those dollars. It is not a one-time, one thing fits all. So um absolutely.

SPEAKER_02 17:22

I think, you know, working with someone like Dr. Mia to put together your packet because the first time I ever talked to someone when I was helping them start their school, and I said, So who's on your advisory board? And they looked at me like I was a crazy person. They'd never heard that term before. And I was like, You're gonna start a business and you don't have an advisory board? And they were like, What is an advisory board?

SPEAKER_03 17:46

And people at the it's people at your local SBDC that are free volunteers or local score office. I mean, right now is a great time to start taking all these free business classes at the Chamber of Commerce, at the SBDC, at Score. Score.org has tons of classes online. If you go to score.org Dallas, you'll actually find this really great series of like 11 episodes that Carrie did last year that had like 20 some um professional vendors plug plug. But, you know, you need to make sure that you are actually doing your homework. We we spend a lot of time learning about children. Uh, if you've got a CDA or, I don't know, a couple of degrees in education, right? Like there's things that Dr. Young is absolutely going to be able to probably do circles around the rest of us on. But right now is a great time for you to start educating yourself in what this looks like.

SPEAKER_01 18:40

Absolutely. And and understanding the terms, meaning there's just when I first entered this whole SBA world, you know, they would say equity injection. And I'm like, what's that? Oh, you mean the down payment, right? They would say, Oh, let us have your pro forma. Well, what's that? Your projections. Well, what's that? You know, like they were just just being able to speak the language, right? So you definitely have to get prepared. You have to make sure you understand what you're getting into. I'm a huge advocate for SBA because it is an opportunity if it's to help you fund your dream if you want to do this. But I also want you to know what you're getting into. So you don't find yourself like, oh my gosh, I don't have enough money to do this. Some you have to have a business plan. And I don't want you to go out and buy one. If you have to go and buy a business plan, you're not ready yet. You need to be able to write your own business plan and make your own projections. Where do you see this business going? Year one, year two, year three. I want you to live and breathe this thing, build it, take it from here and from your heart. And now let's put it on paper. So that's what I offer. I help, you know, anyone who's interested, and guess what? I helped a few find out you're not ready yet. I'd rather you know that now before trying to go through this and realize, oh my gosh, what I've, what have I gotten myself into? But one caveat I do want to say because I don't want anyone to walk away from this message thinking that it's hard or it's impossible, because it's not. It's preparation, it's getting connected, and it's doing the work. If you can do those things and you've looked at your finances, because, like Kate said, they will un, they will turn every stone. They are going to investigate every single thing about you, as they should. If someone is giving you millions of dollars.

SPEAKER_03 20:41

If they're giving you $5.7 million worth of reasons, they're gonna look at everything. They're not just gonna do that because you're pretty. Absolutely.

SPEAKER_02 20:50

And you can't take that personally, correct? You may have that knee-jerk reaction that, well, they did they asked this very invasive question right after I told them that I'm a single mom. So they must be looking for reasons to not give me the loan because I'm a single mom. No, they would have asked you that invasive question even if you'd said you'd been married to the same man for 47 years. It they're going to ask you invasive questions, and it is not personal. They've got forms to fill out.

SPEAKER_01 21:21

Absolutely.

SPEAKER_03 21:22

So it really comes back to it's all about the dollars and cents. And this is, yeah, I mean, we're we always talk about the business of childcare. And so uh the advantage of bringing this voice in is that right now you're listening to somebody who's done it, and not just once, but's done it twice. Um, yes, two different types of SBA loans, yes, two different industries. But you know what? There were a lot of lessons learned probably in between there. And probably she probab me Dr. Dr. Young probably has a long list of mentors and people who helped through the process. This is not something where you don't ask for help. Right. I mean, as a business owner, you need, like Carrie said, your advisory board. It doesn't mean that they're all sitting around a table once a month telling you what to do, because that's a bunch of consultants telling you what to do. An advisory board gives you suggestions, you make the decision. Mentors and coaches, coaches, they don't tell you what to do. If you've got a coach and they're telling you what to do, that's a consultant. Sorry.

SPEAKER_02 22:24

And an advisory board, people think that that means that those people are all getting together at ever, ever. No, my advisory board has been ever changing. And I don't think all of them have ever been in any room at the same time. I've got lawyers who I call, I've got finance people I call, I've got um HR people I call, I've got real estate people I call. You, your advisory board is really just your brain trust of people that are your resources to be able to do your job well. Absolutely.

SPEAKER_03 22:58

So, Dr. Young, if somebody wants to reach out to you, I know that we're gonna put that information in the show note, but why don't you tell folks how they can get a hold of you? What are some of the things that you offer as support? And like I said, we'll have all of Dr. Young's contact information in the show notes. And I have, oh wait, wait, so wait, before you do this, I have one question for you. Sure. So we know that every year a lot of us struggle with staff appreciation. What is the one thing you've done related to staff appreciation that you were extra proud of, or you just noticed it really like it hit? Like you're like, that was it. That was the thing.

SPEAKER_01 23:37

You know what? I first of all, I have to put in a plug for the child care clique. I am a part of the child care elite with Latrice Um Crawford, the child care chick, being a part of her organization. Because, see, when you've been in childcare, sometimes you go like this, you have ebbs and flows where there are some years you're like, yes, and there's some years you're like, somebody pull me out. I'm drowning. And I had kind of gotten into this space where I didn't know if I was loving it anymore. I was almost ready to sell. And then I met Latrice, the childcare chick, and she and the organization, they re-energized me. And one of the things she talked about the most was making sure you love on the internal customer, your staff, your parents as well. So she's challenged us all year long to find creative ways to appreciate our staff. So we've been doing it monthly. What we just did, I'll talk about the most recent one was Valentine's, right? It's the month of love. And so my staff, they love coffee, but I don't allow hot coffee drinks in the building because I'm like, no, I don't want that liability. I don't want hot coffee to spill on a child. So we created this beautiful wall called a latte love wall. So a lot of love. And parents were giving heart-shaped sticky notes, and they hand wrote notes to teachers and they would place them on the sticky on the wall. And teachers every day would come out, go to that wall looking for their name. It was covered with hundreds of sticky notes. And on that Friday, I brought in cold latte drinks that were custom made by this company called Wicked Sips. And we passed, we got our little cart and like just went up and down the hallway with lattes. Those teachers, you would have thought I gave them a million dollars. It's the simple things. It's the simple things that say, I see you, I appreciate you, but we've been doing things like that all year. It started last year, and I recently took them out in January. We went to Drive Shack to play golf just to get out of the building. Team building. And it was freezing in Orlando, but we had a blast. So those are the kinds of things that we do to appreciate and love on our staff. So it doesn't feel like when May comes for teacher appreciation that we're doing it just that one week. No, we're loving on you all year long.

SPEAKER_03 26:11

Love that. Thank you. We are actually we're spending most of April talking about staff appreciation with all of our conversations. So as we continue to bring the voices of childcare together, we are wanting to hear from them. And so thank you so much for sharing. And yes, actually, Latrice has been a guest on our show twice. And we absolutely love having um and being a part of uh Latrice's network of folks and getting to meet. I'm gonna call her her clique, right? Like other folks. So how do they find you specifically, Dr.

SPEAKER_01 26:45

Young? Absolutely. You guys can find me on Instagram, Mia M I A dot L, that stands for love, dot young. That's my Instagram handle. And over on Facebook, it's Mia L Young there as well. And so, yeah, reach out. I am an open book, willing and ready to share because I want all of us to win. I want all of our dreams fulfilled, and I want us to continue to provide excellent child care services for families to come.

SPEAKER_02 27:16

Absolutely. So, guys, I think you got a lot of value out of today. Hopefully, you know, something towards your own $5.7 million dream. And if you know somebody else who should have heard this episode, please share the show with them. And we will see you in a few days.

SPEAKER_00 27:37

Thanks for tuning in. We love bringing you real talk and fresh insight from the world of early childhood education. Be sure to follow us on social media to stay connected and catch all of the latest episodes. And if you're planning a conference, training, or special event, Kate and Carrie would love to speak to your audience. You can learn more about their keynote sessions and workshops at kateandcary.com. If you learned something today, share the show and leave us a review below. We'll see you next time on Childcare Conversations.