75. Former Nanny Turned $11.2M/Year Business Owner

0:00This former nanny revolutionized the childcare industry and earned herself$11.2 million a year doing so. As long as humans have babies, nannies worldwide will have overwhelming demand for their services. They just need the right tools and guidance. I was putting sweat equity into it way more than marketing dollars because that's what we had. So over time, they add up to be really expensive mistakes that may be just, you know, a couple hundred dollars here and there. But over the course of five years, that's a lot. I wish someone had told me that it's not to give up. Like it's going to take longer than you think it might need to take.

0:36So to me, it's worth making less money if you maintain a higher reputation. I'm your host, Alex Freeman, and I'm here today with Christy Bickmeyer, the founder of Twinkle Toes Nanny Agency. Today's episode is the ultimate guide to starting your own lucrative daycare business. Christy, thanks for joining us. Thanks for having me. So can you start us off by telling us a little bit about your background? Why did you decide to start Twinkle Toes? Sure. Well, like you said, I was a nanny all through my college years, graduated from college, got married, had a baby, and I was working in the corporate world and needed to find somewhere for my son to go when I went back to work when my maternity leave ended.

1:15And I was not comfortable putting a three-month-old in daycare. And at the time, there was one other nanny agency in town, and they were a traditional nanny agency, which means I would have to pay them between$1 ,000 and$2 ,000. I think at the time it was$1 ,200 for their placement fee. And all that got me was a list of nannies that I could then meet and interview and decide who I wanted to hire. At that point, I would have to come up with a contract for them, pay them, pay all their payroll taxes. And then if they ever got sick or their car wouldn't start or they wanted to go out of town, I was kind of on my own.

1:48There was no backup. This was like my one option. The wheels started turning at that point. And I was like, this doesn't make sense from any perspective. Like from the business standpoint, the business would be getting$1 ,200 from me, the customer, once. And that's it. That's not a lot of revenue. Number two, from the family standpoint, like I just explained, all my eggs are in one basket. Oh, and they also only had a 90-day guarantee. So after three months, if she flaked or moved away, I would have to pay that placement fee all over again to get somebody else. So there was no security for the family.

2:19And then from the nanny's perspective, which was mostly where I was coming from, having been a nanny, what if I wanted to go on vacation and it didn't work with the family schedule? You know, I was kind of beholden to my employer in terms of what I was able to do. I wasn't allowed to get sick. You know, it just was a lot of pressure. And that's how I worked as a nanny. I worked for two surgeons. So I went to work when I had the flu because they couldn't just cancel surgery because I was sick. I didn't go on family vacations because they needed me. So once I started looking at like the reality of the way nannies are placed, it just did not make sense.

2:54And so I came up with this other system, which is what Twinkle Toes is. It's more of a network of families, a network of nannies. Families don't pay anything to us up front. They just pay the hourly fee. And from that, we pay our nannies, we pay all of our overhead, just like any other service industry business. That's kind of how we work. the nannies have access to the online schedule so that, you know, if their family's gone for the week, they can go on the schedule and pick up as many shifts as they want to make up that income. So it's just makes a lot more sense from every angle. It makes so much sense now that you've done it and created this new system, but incredible to kind of look into and see that way to disrupt that industry.

3:35What was the most difficult part of starting a childcare business? And how did you overcome that challenge at Twinkle Toes? I mean, especially considering you came in and were doing something very different from the way it had been traditionally done? Shoot, I don't know if I can pick just one thing. So we went through a lot of kind of business models before I landed on this one. Because at first I was like, well, I'll just do the placement agency thing and just charge a lower rate. But then that's when I realized from the business perspective, that's not a lot of money. Like I'll never be able to leave my corporate job making$1 ,200 or$1 ,000 a pop off customers.

4:08Because where I live in Gainesville, Florida, we don't have a huge population. And the number of people that can actually afford a private nanny is even smaller. So I didn't have this huge market to work with. But that showed me like, okay, I have to have residual income from these placements. This isn't working. So then I tried doing, I think the next thing was like a membership fee. Like, okay, family, you pay such and such per month. And from that, you get, you know, all of this babysitting and nanny care or whatever. That also was not attractive for the family to see a recurring fee because they're paying me this recurring fee.

4:41And then they're also having to pay their nanny. And if it's like a full-time legit nanny where the nanny works only for that family, they're having to pay payroll taxes on top of that. So that didn't make sense for the family. And then I landed on where we are now with just the network of nannies, the network of families, the online scheduling system, which also didn't exist. I had to create that as well. So I would say landing on the actual business model that worked, that took off was the hardest part. And you made mention there that, you know, you started the business as a side hustle. So how long did it take before it became your full-time job?

5:15And how did you know it was the right time to leave your corporate job? It was my goal. As soon as I had to work my very first Mother's Day, I was in property management, in student housing, and somebody had scheduled move-out day for Mother's Day. You know, you schedule this a year or two in advance. I'm sure they just didn't realize. But as the property manager, I had to be there. I had a four-month-old baby at home. It's my first Mother's Day and I'm walking filthy student apartments. So that was when I decided I was leaving this job. And at that point, Twinkle Toes, I don't even know if we had actually registered as an LLC yet, but it was definitely rattling around in my mind.

5:49And then I became pregnant with my second child about, I don't know, 16 months later. And I was at work only thinking about Twinkle Toes, making Twinkle Toes calls, sending Twinkle Toes emails. That was clearly where my interest was and where my passion was. and I'm a big believer that you can't do two things if you're doing two jobs like you can't do them equally well you're going to do them equally terribly or equally mediocre and that's not an option for me if I'm doing something it's going to be all the way it's going to be as well as I could possibly do it so I finally just talked to my boss who is also a mom a new mom and I told her look I've started this other thing I got to get out of this what can my exit plan be and it's funny, she actually, she lived in Tampa and she became one of the first clients of Twinkle Toast Tampa when we opened down there.

6:36So she was a huge supporter. She wanted to help me, you know, kind of get out of the corporate world and follow this. And she worked with me to do that. Obviously working a main job and then managing a side hustle is difficult in any situation, but especially when you're trying to like actually grow the business, how did you do that without burning yourself out? And what advice can you offer someone who has a side hustle that they'd like to grow into something that is their full-time income? Well, I did burn myself out. I burned myself out on my corporate job. That was getting in my way. And so I was burned out on that.

7:08So that's what I left. But I was just telling someone the other day, I did not go to a park, a play date. I didn't go anywhere without talking to someone about my business because I was immersed in this kid world. I had a baby and we're going around and doing things and shopping at the baby places. And I didn't go anywhere or meet anybody where they didn't leave that conversation knowing about this business that I had started. They had a card, you know, I told them how it worked, told them to call me. It was just on the forefront of my mind all the time. It was an obsession. My husband was a big supporter and he took cards to his work and this family that I had nannied for, the last nanny job that I had, the two surgeons, I told them about it and they sent out an email blast to all of their co-workers in the hospital to put the word out for me.

7:52And once that happened, that was like, okay, I need to like quit my other job because this is really taking off. So that was a huge help. But I did burn out. You know, I don't think you can do two things well. And I just burned out on the thing I wasn't interested in. What mistakes did you make in the early days of the business? And what did you learn from those mistakes? Well, like I said before, having different business models, I learned that those business models don't work. And I just kind of tweaked them along the way. I made a lot of mistakes. It's funny, my contract now that I signed with my nannies and that I signed with my families, almost every clause is because this has happened before.

8:27Now this is in our contract. So a lot of it is like, oh yeah, I didn't think about that when this first started, but now we've, you know, come to this issue. We need to write that into our contract so that people know what to do when it happens and what not to do. So my whole contract is that same with the nanny handbook. I give them a handbook of like, this is how things work. You know, this is how you put in for time off. This is what's appropriate to wear and not wear. All of those things too are from like things that, you know, nanny showed up at a parent's house wearing something inappropriate.

8:56The family calls me upset. So now that goes in the handbook as like, hey, suggestion, don't show up in a miniskirt if you're expecting to get on the floor and play with two-year-olds. But all these things like, oh, I didn't think I needed to say that, but I do, I do need to say it. So there've been a lot of little things. I wouldn't say there was anything that was like, you know, major mistake. It was just a bunch of smaller and they were all, you know, when they add up, they're very expensive mistakes. You know, I lost that family because the nanny shows up looking inappropriate. And so that's what they think my girls look like.

9:26Different things that happened with the contracts, like, well, you know, I lost this family because of that, or I lost this nanny because of that. So over time, they add up to be really expensive mistakes that may be just, you know, a couple hundred dollars here and there. But over the course of five years, that's a lot, you know, so small things, but they amount to big things in the end. Yeah, that kind of leads me into this. I want to ask you about skills or just like personality traits to thrive as a child care business owner. I'm particularly interested because unlike a lot of the business owners that I talk to, child care, it doesn't get more personal than child care for the customer.

10:01And so I'm just curious about what are those special skills that you need as the owner of the business to help the business grow and thrive and ultimately make your customers feel as safe as you want them to feel? Right. Well, and I would take it even a step further. It's not just child care. Child care alone is personal, but this is child care in their home. So you're not taking your kid to a daycare. You're inviting someone into your home to have access to your entire life. All of the things that you have laying around your house, that person has access to while you're gone at work all day or, you know, sitting in your home office.

10:34So it's even more personal. So for me, and this is a common misconception, you don't need to know anything about children necessarily to run this type of business. I have people call me all the time that tell me they would be a good franchise owner because they were a good nanny. And I talk to them and it's like, yeah, I bet you are a great nanny, but you have no idea how to run a business. And so they're two very different things. So what it takes is somebody who can make that family feel comfortable. And as a mom, I have the added advantage of being able to tell them, listen, when I interview a nanny, if I wouldn't let her watch my kids, I'm not going to recommend her to you.

11:09Now, I do have franchise owners who don't have children. And so they can't say that. But I think being a mom or being a dad adds that extra level of like, yeah, I know how hard it is to go back to work after you've had a baby. I know how hard it is to come home at the end of the day. And, you know, the kids are screaming and they're hungry and the house is a mess. And like, I get all of that. I think the number one thing is just finding a way to make the families feel like they're in good hands with you and invite them to completely trust the process to you, to me, so that, you know, you don't need to get on care.com.

11:39You don't need to go, look, I am doing this for you and I'm going to take good care of you. And it's the same with the nannies. You know, when I'm hiring nannies, a lot of them are younger. They're college age girls. I'm sending them into people's homes and I need to make them feel comfortable and know like, listen, I've been to their house. I have been in there. I've met with them. They're normal. They're not crazy. You know, they're not hoarders. They're not like I'm taking care of those people, too. And I need to let them know, too, like if an issue comes up, if a father makes you feel uncomfortable, call me.

12:06I will take care of that. So it's kind of working both sides to make sure that it's a compatible and comfortable fit. Quick reminder for our listeners that if you want to hear more advice on how to start and grow a side hustle, listen to episode 68 of our podcast, where I interview Nick Loper of Side Hustle Nation about the best side hustles to start in 2023. Christy, talk to me about the actual startup process. How much did you invest to get the business started? And what are some of the kind of main expenses involved in opening a childcare business? Well, it depends on what the business is. I can tell you that I had no money when we started.

12:41I designed my own brochures and business cards. I had them printed at the local print shop. I had a$15 website. I mean, I didn't have a lot of money to put into it. But because I was so committed and would pound the pavement, like I had door hangers made, I wouldn't put door hangers on doors in the heat. And I mean, I just, I was putting sweat equity into it way more than marketing dollars, because that's what we had. That's what I had to give. My biggest expense was insurance and still is insurance because finding insurance for a childcare company is hard. Number one, a lot of people don't cover it.

13:13Those that do cover it, they want an arm and a leg for it. So that's always been my biggest expense. The great thing about a Twinkle Toes or probably any nanny agency, but Twinkle Toes especially, is we don't have overhead in terms of a building, employees to pay unless they're working. You know, like when places got shut down for COVID, my friend that owns a daycare still had to make her mortgage payment. She had to keep her lights on. She had to pay her people or they weren't going to come back after the shutdown. And we didn't have any of those problems. It was like, man, I'm working from home and my people don't get paid unless they work.

13:45You know, I just was very grateful for this business model. So depending on what the childcare company is, there's different overheads. Every business has a little bit different overhead, but it's mostly at this point, insurance, marketing, things like that. Now, my understanding there is that you didn't take on any debt to start the business. How did you finance the work that you did? Obviously, lots of sweat equity, but obviously some of that stuff does cost money. How did you come up with that money? It was just out of the profit that I made from the business. Every dollar that I made went right back into it.

14:13Now, remember in the beginning, I had a corporate job. So I had an income, but I quit that job well before I could replace that income with the nanny agency. So there was a period of a few months where it was like, I didn't have any money coming in from my corporate job. Not much was coming in through the business. When it did come in, it went right back into the business. So we ate rice and beans lots of nights. We lived in a very modest home. I mean, it was like less than a thousand square feet. I drove a 12 year old car. You know, I wasn't trying to ball out of control at that point. You know, it was just I was thinking of the long game.

14:48You know, if I can live on rice and beans now, then I can put every dollar back into it and grow the business into what I want it to be in five or 10 years. And how long did that process take? When were you able to maybe stop eating rice and beans? It was probably six months after I left my corporate job. As someone's planning to dive into this business, what are some of those steps that they should take before they actually, you know, are open for business? How do they plan and prepare for the actual opening of the company? Well, I think the first thing to do is to know your market. So do some market research, get to know your town.

15:21What's your competition? What are the daycare rates? What daycares are available? What other nanny agencies are already out there? What are they charging? What do nannies expect to make in that area? Who can you network with? I grew up here, so I knew a lot of people just around town. I had worked as a nanny, so I had those parents who I knew would support me, like I mentioned before, the surgeons. And I also had a network of girls that I could call and be like, hey, do you want to work for my agency? Because I was just out of college myself. So I still had those connections. So think about networking.

15:50Who's going to be OK with passing out cards on your behalf or who's going to let you put up brochures at their place? So I would say start with figuring out, does your area need this business? Can it support this business? You know, if you've already got six just like it, maybe do something else or do something in the same area, but different enough that you stand out. Now, you made mention of insurance being its own special kind of hassle, but are there other like unique things in the childcare industry that are required of you that aren't required of if I wanted to go, you know, open up like a Jimmy John's franchise or something?

16:23So how do you go about dealing with those types of issues as a company? If you wanted to get into, say, a daycare, even a home daycare, there's a lot of regulation around that. But if you're doing a nanny business like I'm doing, knock on wood, I mean, there's at this point no oversight in terms of regulation or certifications needed. So in the world of childcare, it is the one where you're dealing with the very least red tape. And obviously, you know, working in that kind of environment, reputation becomes absolutely everything. How do you build that reputation and customer trust as a child care business?

16:58What has worked well for Twinkle Toes? I mean, it starts with who we hire, because that's ultimately who is representing you in everybody's home. I mean, the family calls me, we have a 20 minute conversation. And then from there, their day to day interactions are with their nannies. So it starts with who are you hiring to send into their home and making sure that those people represent what you want represented about your company. The second thing I would say is when there is an issue, I mean, there's issues, there's always issues, any business, you're going to have issues, the nanny didn't show up, or she showed up and she smelled like cigarette smokes, or she showed up 20 minutes late and didn't even apologize or whatever it is.

17:35What I've learned is families just want to know that you are listening to them and that you care about how this affected their day as a consumer. And I've seen this just increasing, you know, in the last three or four years, and it drives me insane. But customer service is the absolute worst I've ever seen just across the board lately. And, you know, if you have an issue with a company, it's hard to get ahold of anybody to get anyone to call you back. If they do respond, it's an auto email, like, oh, here's a$20 gift certificate. See you next time. Like, that's not what I want. I want you to get on the phone and listen to me and understand that this is a big deal to me.

18:13And I want to hear an apology. And that's what I try to always give my families. It's like, I'm really sorry this happened to you. I understand this is not what you needed today. How can we fix it? So I think just taking responsibility for it as the business owner and giving the family access to you as the business, as the business owner, and just say like, totally our fault. Or if it was my fault. You know, I'm sorry, I messed up the schedule. Just take responsibility, own your mistake and ask how you can fix it. That's how you keep the customer. You can't change what already happened, but you can do better next time and retain that customer just by letting them know that you care.

18:49Based on that answer, I would assume at least some portion of your new customers are coming to you via referral. Is that the primary method or are there other advertising platforms or strategies that you're using to bring in new customers? So it depends on the location and where we're at in the launch process. So Gainesville, for example, we've been around for 12 years. It's almost strictly word of mouth at this point. Tampa, same thing. That was the first one that I opened besides Gainesville. We don't do hardly any advertising there because it's all word of mouth. And both Gainesville and Tampa have a waiting list of families that need nannies just based on word of mouth.

19:24Now, if we're starting up, let's say in Nashville, no one's ever heard of us there. So we have a whole marketing plan that the franchisees get, and it's got multiple layers and different things that we do, different points we hit with our customers. But ultimately what it comes down to is when the phone does ring, how do you handle that? And are you responsive? Do you get right back to people? Are you available to talk with them? This isn't a business where someone just, you know, puts in a request on a website and you don't really have to do anything. Like it's very personal. And so being there to interact with the customers, with the families, with the nannies, that's what keeps the phone ringing.

19:59So I would say our initial marketing push gets the phone ringing, but how you respond to them keeps it ringing. You've made mention of other friends that also work in the childcare business. Can you talk about the importance of networking and building those relationships with other owners in the childcare space? Yeah, I mean, networking is huge regardless of what the business is. For me, I own the nanny agency in town. The other one that I mentioned before has since gone out of business, by the way, the one I used to work for. I'm friends with multiple daycare owners and we have great relationships.

20:27We don't see each other as competition. We have things set up where, you know, if this one daycare has a waiting list for their infant room, she'll recommend twinkle toes. So that family can get a twinkle toes nanny just until a spot opens up at her daycare. So she doesn't have to worry about them going to another daycare to get on their waiting list and maybe ending up there long-term. And I've made it so that we understand like, yeah, as soon as you get that call, your nanny's done, you go join that daycare. It works for me. It works for her. When COVID happened and her people were out of work, they came to work for me.

20:58So she didn't have to worry about them, you know, getting a job somewhere else that was going to keep them forever. They came with me temporarily. Once she reopened, they went right back to work for her. So I think it's huge having those mutually beneficial relationships. This is going to bring us to a section of the show that we call our Fan Blitz questions. These questions come from our YouTube community. Listeners out there, you can join the community. Go to youtube.com slash upflip and you can post questions to future podcast guests. A couple of questions here from the community, Christy. And a shout out to IDC, Ryan Redinger, Lovingly and Leighton Brand, who submitted questions that we have answered already in the show or will answer later.

21:36But a couple of ones that came in that we haven't answered yet, one of them being from Ryan Redinger. What advice would you give to someone trying to start a nanny or daycare business that you wish someone would have given to you? Oh, that's a great question. I wish they would have told me, don't even consider doing a daycare. Just go with a nanny agency. that to me is just off the table, just with all the regulations and with the potential shutdowns and stuff in the overhead. So I'm just going to stick with nanny agency. I wish someone had told me that it's not to give up. Like it's going to take longer than you think it might need to take and just be consistent and don't give up.

22:11Lovingly asked, what degree did you get? I have a completely useless degree in history from the University of Florida. Very expensive piece of paper that I've never used. And Leighton Brand also asks, what value adds do you offer to clients to increase the service offering and ultimately the fee? Or if any, I'm not sure if you do. That's a great question too. So we do kind of like I mentioned, but I didn't say specifically in the beginning, we offer backup nanny services. So if your nanny gets sick, can't come in for any reason, we always have somebody on call on standby that can step in for your nanny.