Do you ever wonder where all the money went? Do you actually know your monthly budget? What is your supply budget, food budget or utility cost? You may find it hard to imagine, but my own child care provider told me one day that she had no good idea what any of her line item budgets were. I was astounded.
I grew up in the restaurant business. We knew how much it cost to open our doors each day. We knew how much revenue was needed to make it a profitable day and how much we needed just to break even. We knew how much each shift could afford to spend on personnel. Child care businesses should also know how much it costs each day to open your doors. How much revenue is needed to break even and/or actually make a profit?
If you plan on being in business for more than a year or two, you need to have a basic budget and cash flow spreadsheet. Many child care businesses find out too late that they have been losing money for a significant amount of time and then end up closing.
You wouldn’t teach children gross motor skills by using potty training methods. It is the same idea; use the tools that are appropriate for the financial side of your business. Simply having a check register (although it is a critical tool) isn’t sufficient to understand the financial standing of your program.
Check out the “Fiscal Management” section of our website for tools that may help you more effectively run the business portion of your child care program. Keep it simple when you can; in part by using the right management tools for your program.