That sucks and is so stressful when you can't fill spots. I just filled my last spot and it was the hardest to fill. I had advertised for 2 months (spot was vacant for 1 month during that time). I was getting desperate for cash too. Luckily I found someone to fill it.

What is the person down the street doing that you aren't? Is her space bigger? Is she doing more activities, more outside play, what is setting her apart from you? Is your rate too high/comparable to her's? Would you be willing to charge $1 less than her? Can you take part-time kids to fill the spots? What are her hours compared to yours? Can you extend your hours to accommodate different families? Are you advertising everywhere possible in your area - hanging posters, posting online and the local paper?