How This Early Education Center Maintains Almost-Perfect Payment Rates

Daybreak Academy_web

Rebecca Sato never meant to become an entrepreneur.

When her youngest son, Sebastian, was three years old, she started looking for a good early childhood education program for him in her community outside Salt Lake City.

The options she found were… lackluster.

“It’s hard to find quality programs for kids that young,” Sato says. “But I wanted so badly for my son to have it that when I couldn’t find it, I had to create it for myself.”

The result was a small pilot program that would eventually become Daybreak Academy, a full-fledged education center for children aged two through 3rd grade that merges arts and academics. The school pairs a traditional academic curriculum with a vibrant arts and enrichment program that nurtures a child’s unique gifts and talents.

Before the age of six, children’s brains have a particularly high level of what’s known as neuroplasticity—the ability to change, grow and form strong neural connections that promote intelligence. Research shows that kids who are exposed to the arts at an early age gain a host of benefits, from improved focus to higher IQ scores, that last throughout their lifetime.

“It’s a crucial window to give children opportunities that will benefit them the rest of their lives,” Sato says.

A Piece Of Good Advice

Sato’s path to becoming the founder of Daybreak Academy may have been one of happenstance, but it included a pivotal decision she says may have sealed the fate of her fledgling school. It was all thanks to a piece of advice she got from her banker when she was preparing to open the academy.

He told her this: no matter what, make sure you have a good accountant. It can make or break a business.

When you look at the statistics, it’s a harsh reality; eight out of ten entrepreneurs who start a business fail within the first 18 months. One of the major causes is not having a handle on cash flow.

A mutual friend put Sato in touch with Ignite Spot’s CEO, Eddy, and Daybreak Academy soon signed on as a virtual accounting client. Though many entrepreneurs go the DIY accounting route when they’re first starting out, Sato says the decision to work with ignite Spot was a critical investment in her business.

“It allowed me to take all that stress and time and energy spent trying to be an accountant when I’m not an accountant and put it into growing my business,” Sato says. “I’m going to get a lot more return putting that time into marketing, developing programs and connecting with families than trying to save a few hundred bucks.”

Getting Paid

Selling a product is one thing. The customer pays you, you hand over the product, and the transaction is complete.

Selling a service is something entirely different, with invoicing, payment terms (net 30, net 60, etc.), and accounts receivable to keep track of. It’s further complicated for a business like Daybreak Academy, which involves working closely with children and forming intimate relationships with the families they serve.

“I can’t tell you how many moms have cried on our shoulders,” Sato says.

And that brings about a unique challenge: balancing the needs of clients who so closely resemble family with the necessity of getting paid each month.

Sato says setting boundaries and sticking to them is something her team has done with Ignite Spot’s help from day one. Tuition is due on the first of the month—with very few exceptions. It’s a policy that has served the school well; they write off less than 3% of annual tuition. For many private schools, that number is as high as 20%.

“If that was the case, we’d be out of business,” Sato says. “In the end, clients respect you more if you stick to your values and policies than if you make exceptions and bend rules.”

In practice, that means making it as easy and beneficial as possible for clients to play by the rules, too. Daybreak has instituted a strong pre-payment policy with a $35 discount for paying the next month’s services by the 25th of the prior month. Under this model, 80% of Daybreak’s tuition is collected before it’s due.

Related: How To Get Paid Faster

Sato points out the many necessities that depend on strong payment rates, like annual raises for the school’s teachers and top-notch academic programs, none of which can be provided if tuition isn’t collected.

Though firm, Daybreak’s tuition policies come with a hefty side of compassion. Sato and her team make listening and empathy the top priorities when interacting with clients. Most times, she says, when a client is upset, they just want to feel heard.

“Everyone comes from a different place and we don’t know their challenges,” she says. “We’ve avoided so much negative by just listening. Being a good listener and genuinely caring about the people you serve is going to end up well for you, no matter what line of work you’re in.”

On Decision Making

It’s been nearly ten years since Sato launched Daybreak’s pilot program and she’s come a long way on her entrepreneurial journey. We asked if she had any advice to share with would-be entrepreneurs.

She offered this piece of insight on decision making:

“When a client or employee comes to you and wants an answer you’re not sure about, always ask for a day or two to think about it. Early on I felt pressured into making fast decisions and I would agree to things that weren’t really in my best interest or the best interest of the company. When you give yourself some time to think it through, you can almost always come up with a win-win that’s better for them and better for you. You can make a professional choice and not an emotional one.”

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