Tuesday, October 28, 2014

Financially Healthy Child Care

Is your program financially healthy?  Do you know what enrollment you need to break even and to make the profit you want to make?  Many child care providers are so busy operating the program day-by-day that they don’t take the time to assure their financial health.
Maintaining a checkbook and balancing it every month, which is kind of unusual in these days of online banking, is great and necessary, but not sufficient.  That’s a very reactive way of watching the budget rather than being proactive.  You have to know what is in your account now, but also what is going to be coming in and what is going to be going out. 

A budget can help you make sure your program stays financially healthy.  It can help you see if:
  • your parent fees are where they need to be
  • your staff is paid well enough to keep them from jumping to a better-paying job
  • you are spending the right amount on program supplies
  • your food expenses are appropriate
  • you are paying yourself fairly
If you don't already have a solid budget or if you want to assess your current budget and compare it to industry norms for budget expenditures, our "Budget Worksheet" can help.  We have one for Child Care Centers and one for Family Child Care Programs.  Each worksheet includes:
  • budget line item for revenue from parent fees (including a simple revenue calculator)
  • budget line item for revenue from a food program (including a simple revenue calculator)
  • budget line items for care and services expenditures such as food, field trips, and subscriptions
  • budget line items for staffing expenditures, including unemployment and Worker's Compensation
  • budget line items for facility expenditures such as rent/mortgage, repairs, janitorial services, etc.
  • a simple calculator for food program expenses
  • a simple time-space calculator for Family Child Care provider tax purposes
  • industry norms for budget percentages to help you compare your expenditures to other programs
Especially when money is tight, making sure that your budget is correct is critical.  It can be the "make it" or "break it" for your program.  Be sure that you are giving it the time it needs, and deserves.


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