In a pioneering effort to address two pressing economic challenges at once, the St. Paul-based nonprofit CLUES (Comunidades Latinas Unidas en Servicio) has launched Minnesota’s first Latina child care business incubator. The initiative aims to simultaneously tackle the state’s critical shortage of child care options while creating economic opportunities for Latina entrepreneurs.
The child care crisis in Minnesota has reached alarming proportions, with families across the state struggling to find affordable, quality care for their children. According to a recent report from First Children’s Finance, Minnesota faces a shortage of nearly 80,000 child care slots, with particularly severe gaps in rural communities and urban neighborhoods with high immigrant populations.
“This is about economic empowerment through entrepreneurship,” explained Ruby Lee, president and CEO of CLUES, during the program’s launch event. “Our Latina community has the skills, dedication, and cultural knowledge to provide exceptional child care. What they often lack is the business expertise and startup capital to turn these skills into sustainable enterprises.”
The incubator program, housed in CLUES’ recently expanded Headquarters on the East Side of St. Paul, provides comprehensive support for aspiring child care business owners. Participants receive training in licensing requirements, business management, curriculum development, and marketing strategies. Perhaps most critically, they gain access to low-interest microloans and matching grants to cover startup costs.
Maria Gonzalez, one of the program’s first participants, described how the incubator transformed her dream into a viable business plan. “I’ve cared for children my entire life, but the paperwork, regulations, and finances seemed overwhelming,” she said. “Through CLUES, I’ve learned how to navigate the licensing process, create a business plan, and set proper rates. By next month, I’ll be opening my home-based daycare with six children already enrolled.”
The initiative addresses multiple barriers that have historically prevented Latinas from entering the child care industry as business owners. These include language barriers in navigating complex licensing requirements, limited access to capital, and unfamiliarity with marketing strategies to reach diverse families.
“Child care entrepreneurship represents an ideal economic opportunity for many immigrant women,” noted Ann McCully, executive director of Child Care Aware of Minnesota, which partnered with CLUES on curriculum development. “It allows them to leverage existing caregiving skills, work from home while caring for their own children, and provide a culturally responsive service that’s in tremendous demand.”
The economic impact of the program could be substantial. The Federal Reserve Bank of Minneapolis estimates that each new child care business creates between $100,000 and $250,000 in economic activity annually while enabling multiple parents to remain in the workforce. For every child care slot created, approximately 1.3 parents can maintain employment.
The incubator emerged from a community needs assessment conducted by CLUES in 2021, which identified both child care shortages and economic opportunity gaps as top concerns for Latino families in the Twin Cities. The program received initial funding from the Minnesota Department of Employment and Economic Development, with additional support from the McKnight Foundation and U.S. Bank.
Ramsey County Commissioner Jim McDonough called the program “a perfect example of community-driven economic development” during his remarks at the launch. “This addresses multiple challenges at once: It creates small businesses, expands child care options for working families, and builds economic resilience in communities that have historically faced barriers to entrepreneurship.”
The incubator’s first cohort includes 12 Latina entrepreneurs, each at different stages of business development. Some are just beginning to explore child care as a career, while others are existing informal providers seeking to become licensed and expand their operations.
Program participants receive mentoring from established child care providers and ongoing technical assistance for up to three years as they launch and grow their businesses. CLUES also provides support with finding appropriate spaces, connecting with potential clients, and accessing continuing education opportunities.
“The shortage of culturally and linguistically appropriate child care options has been particularly acute for Latino families,” explained Alicia Smith, director of early childhood programs at the Minnesota Department of Human Services. “Research shows children thrive when their caregivers understand their cultural context and can communicate effectively with their parents.”
For St. Paul’s East Side neighborhood, where the Latino population has grown substantially over the past decade, the incubator represents a welcome economic development tool. The area has lost several large child care centers in recent years, creating what some parents describe as “child care deserts” where demand far exceeds supply.
As Minnesota continues to grapple with one of the nation’s most severe child care shortages, innovative approaches like the CLUES incubator may provide a template for addressing the crisis through community-based entrepreneurship. With plans to expand the program to Minneapolis and eventually to Greater Minnesota communities with growing Latino populations, CLUES hopes to create at least 50 new child care businesses within the next three years.
“This isn’t just about providing services,” Lee emphasized. “It’s about building wealth and economic independence in communities that have been systematically excluded from business ownership opportunities. When we invest in Latina entrepreneurs, we strengthen entire communities.”
