An innovative business incubator in Connecticut is drawing interest — and imitators — around the state and across the country.
This fall, the YWCA in New Britain opened its “Childcare Incubator Project,” a first-of-its-kind model that supports child care entrepreneurs as they launch and build their businesses. The four startups selected for the program occupy adjoining light-filled classrooms outfitted with toys and books, toddler-height tables and chairs, playpens and cribs for naptime.
Nicole Villanueva, coordinator for the program, is on site every day for informal coaching, observations and backup. “I am there for anything and everything, bathroom breaks, moral support, life support, children’s behavioral concerns, helping them with naps,” she said.
For the entrepreneurs, the program started months before they enrolled their first babies. The incubator’s first cohort completed instruction in child development, business and financial literacy and licensing earlier this year. They’re now in a six-month transitional phase, supported by a stipend, where they’re fully operational and slowly expanding enrollment.
Soon, they’ll each have six children in their care. But with only one or two for the first few months, the fledgling business operators can better adjust to the multifaceted role of caring for children and running a business at the same time, Villanueva said.
“One of the purposes of the project is to help them to be successful,” she said. “The support that we are offering is something that a provider will never have when they do this independently, because she’s alone.”
The incubator will continue to provide facilities and support to the startups for their first few years before helping them shift operations to their own in-home facilities and welcoming the next cohort of entrepreneurs.
Breaking through barriers
The incubator model is seen by state and local leaders — not only in Connecticut — as an innovative way to bolster the sector amid declining capacity and stability. The idea was hatched around 2017 when a coalition of early childhood advocates was brainstorming ways to address the capacity crisis.
“We were aware of a business incubator in the city,” Tracey Madden-Hennessey, the New Britain YWCA’s executive director, said. “And we just wondered, ‘Well, if manufacturing and businesses can do an incubator — a shared space where you’re supported and nurtured so that your business is sustainable when you’re ready to move out — why can’t you do it in the early childhood field?’”
The answer to that question was partly financial, but mostly regulatory. Before Madden-Hennessey could propose plans for the incubator to local leaders and prospective funders, state lawmakers needed to change some of the complex licensing rules governing family child care homes.
The effort hit a setback in 2020 when the pandemic shut everything down, but by the following year it was back on track — with even more urgency. The pandemic had exposed the child care sector’s weaknesses more widely, and lawmakers began to take note.
In 2021, the General Assembly took a first step, allowing licenses for family child care businesses to operate in non-residential settings. In testimony supporting the change, Beth Bye, commissioner of the state’s Office of Early Childhood, wrote: “Our agency seeks to support and expand the number of licensed child care programs in our communities, in large part to address the acute shortage of infant and toddler care across the state.”
But Connecticut limited the experiment to a small number of communities, and after the law passed, New Britain became a closely-watched test case for the new incubator model. It encountered, and overcame, numerous additional regulatory hurdles in the three years since.
There were further clarifications around licensing for both the incubator and the individual businesses within it. The building had to be modified to meet the Office of Early Childhood’s standards, including adding a restroom and sinks in each classroom, as well as fencing around the outdoor playground. And there were local fire codes and building inspections and health standards to be met — none of which had ever contemplated this type of facility before. Government benefits that typical child care businesses can tap, such as food assistance, still need to be altered slightly to allow incubating businesses to sign up.
“There are a lot of systems that you don’t think about that are very…,” Madden-Hennessey said, before pausing, “defined.” She said local officials repeatedly told her, “We don’t usually deal with family child care.”
“So from the very beginning, this has been a bit about breaking barriers,” she said. “And hopefully, because we’ve already broken through them, that it’ll be easier for the communities coming up.”
Other cities with incubator programs in development include Waterbury, Danbury, Bridgeport and Stamford. Dozens of other Connecticut towns have expressed interest. And leaders from states including Minnesota and Rhode Island have visited the New Britain project to learn more about the model.
Leading the race
Early childhood advocates around the state are buzzing about the incubator model’s potential, and Villanueva has become a familiar face on panels and at events addressing the future of child care in Connecticut.
The project recently won awards, including the Zaentz Early Education Innovation Challenge hosted by the Harvard Graduate School of Education and a United Way Impact Award.
This spring, as the four New Britain startups were completing their training and gearing up to officially open their doors, the state legislature approved a program expansion allowing 20 more communities to establish their own local child care incubators.
In written testimony supporting the legislation, Coralys Santana, an advocate with The Connecticut Project Action Fund — which has provided financial support to New Britain’s and other emerging incubators — said the model was leading the nation in addressing the child care crisis and driving economic growth.
“By providing intensive training and support to childcare providers, fostering entrepreneurship, and enhancing service quality, this model helps to bridge the childcare shortage,” Santana wrote. “The early success of the New Britain incubator underscores its potential, as it is already equipping participants with essential skills while providing ongoing mentorship and regulatory insights.”
But as regulatory changes have eased the way for these programs, financial challenges remain.
The New Britain project costs almost $300,000 a year to operate, about 90% of which currently comes from private sources. Aside from ongoing annual costs — facility rental, staffing, stipends for the participants — it took about $350,000 in startup costs to initially modify the facility, buy furniture and materials and otherwise get up and running.
Those costs could vary from town to town, but Madden-Hennessey said private funding can only keep them going for so long. “It’s going to have to be sustained, I think, by public dollars,” she said. “The state really needs to contribute to the operation.”
Local and personal
Among the keys to success for the incubator model is its local focus and the direct support it provides for participants in the program. Another Connecticut model, All Our Kin, offers training programs and a support network for family child care providers — but currently operates only in select communities in Connecticut.
Villanueva said the New Britain incubator has taken inspiration from some of All Our Kin’s training offerings, as well as instruction provided by the nonprofit Women’s Business Development Council. But on the ground in New Britain, she has become the go-to resource and a connector among child care businesses — whether they’re participating in the incubator or not.
Villanueva works to put upstart child care providers in touch with more experienced people who can provide mentorship, but she also serves as a resource for local child care providers in all phases of their operations. That “accessibility” is key, she said, “the connection of being able to know that you can find someone in the community who can listen, who can support you.”
Karla Aliendres, one of the child care entrepreneurs participating in New Britain’s incubator, called the program “perfect.”
If early childhood care and education is something you’re interested in, she said, they’ll teach you everything you need to know, from business operations to emotional support. “In other words, there is no way, if you have the willingness to do it, that you can fail,” she said.
Photojournalist Shahrzad Rasekh contributed to this story.