Tierra Encantada's owner has built the day care business she wanted for her kids

Kristen Denzer was touring a day-care center in Roseville for her two toddlers in 2013 when she spotted particularly unappetizing lunches.

"I thought if I'm going to pay $1,000 a month [apiece], I didn't want my kids eating those cheese sandwiches," Denzer recalled.

So, Denzer, then 29, decided to build the preschool and day care to which she would send her kids. She called it Tierra Encantada, and her children attended the original location in Eagan until grade school.

Eight years later, more than 800 children, from infants to 6-year-olds, sit down with 170 staff members to dine on nutritious, home-cooked meals every day at each of Denzer's five Tierra Encantada sites. All focus on Spanish-immersion early education.

Two more locations will break ground this spring in Rochester and Eagan. In addition to four in Minneapolis, Denzer and her banker just spent $2.5 million for a headquarters building on the Minneapolis Greenway that also may add a day care. A franchisee is opening a Tierra in Minnetonka this summer.

However, the 2013 foray into the early-childhood business also nearly tanked Denzer.

"When I opened that first center in 2013, we had more employees than we did children and I underestimated the cost of just about everything," she said.

Fortunately, she and a friend already owned two other cash-flowing enterprises; an event-rental business and a doggy day care. It required Denzer's savings, and her share of profits to make the six-figure investment, on top of an SBA-guaranteed bank loan to build the original Tierra Encantada to sustainability in 2014.

"I had to pour everything I had into the first Tierra," Denzer said.

Denzer eventually sold her six-figure interests in the other businesses to focus on Tierra.

Tierra Encantada posted 2020 profits of more than $1 million on revenue of $10 million-plus.

"I put the profit into building the business," said Denzer, who also owns Tierra's mortgaged buildings.

Denzer worked her way to a master's degree at the University of Minnesota. She left a doctoral program in evaluating program effectiveness to focus on business a decade ago. Those weddings and proms, from $1,000 to $30,000 events, taught Denzer organization, details and working late nights and weekends.

At Tierra, Denzer pays herself $120,000 to run a growing business for which she was named an "EY Heartland Entrepreneur of the Year" in 2020 and Inc. 5000 list of America's fastest-growing companies.

She has refused purchase offers for Tierra from corporate operators.

"It's in my will that if I die, no one can sell this," Denzer said. "Just replace me. Tierra is my passion and purpose. I believe Tierra is a growing leader in Spanish early-immersion day care."

"We need to know other people and speak other languages," said Denzer, who studied in Mexico during college. "It's much easier to learn a language when you are young."

Denzer charges roughly $300 to $400 per week. There are need-based scholarships available through the Parent Aware early-education ranking system and early-education funders.

Denzer said Tierra's secret sauce is caring for employees as much as it does client families. It retained 95% of workers, before COVID-19, in an industry where annual turnover is closer to 30%. The pay ranges from $15.25 per hour minimum to $20-plus per hour for classroom staff. Employees receive training, health insurance at a modest cost, paid vacation and a 401(k) retirement plan.

"I want this to be a career," Denzer said. "We focus on tenure, internal training, promotion and being a place at which employees stay."

Karina Zumba, 34, a career childhood educator, became the director of the Eagan center in 2013 and was named chief operating officer of Tierra in 2019.

"Kristen already had a framework, including fresh foods for the kids, as a mainstay," Zumba said. "I helped develop things within the framework. And execute. Childhood education is important. Parents want it to be like a second home. We become a second family."

Tierra even offers its own branded cloth diapers, included in tuition.

The staff leans Latina and the kids also are diverse.

Choice Bank's Dan McCarvel, Denzer's banker, said the energetic Denzer "doesn't let a lot of grass grow under her feet."

"There's a lack of Spanish-immersion day-care product and she's going after it," McCarvel said. "She's confident. She got it done in Minneapolis with the Windom location, then Seward, then on to Hiawatha. And they came to fruition just as expected. There was concern about COVID last year. Kristen put in the appropriate policies, people and procedures. She figures it out.

"She listens to us. She understands. She's improved her processes, including accounting and financial reporting. She's really taken advantage of SBA real estate and operating loans."

Denzer, a single mom whose ex-husband shares custody, works long hours, including weekends.

Denzer also is a board member, donor and volunteer with Women Venture, the nonprofit trainer-and-SBA financier of female-led businesses. Most lack significant capital.

"My success has allowed me to help some others," Denzer said. "I'm grateful."

Tierra also is franchising in other states. The total investment necessary to open a Tierra franchise starts at nearly $850,000, including the franchise fee of around $50,000.

So far, five buyers have signed up, with plans for eight centers among them.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.