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.

Misty

What Is High-Quality Child Care?

We talk a lot about providing high quality child care, but do we stop every now and then to think about what that really means?  In one of my previous jobs, I managed a Child Care Resource and Referral program, so my staff was tasked with helping parents find child care.  One component of their job was to teach parents what high-quality child care looks like.  As providers, our mission is two-fold: we need to provide high-quality care and we need to make sure that parents understand what that means and why it’s important to them.

So, what are the components of a high-quality child care program?

• Number 1 on the list has to be safe and healthy.  We have to have procedures in place to check regularly for any hazards, inside and outside.  We have to have health policies that ensure that ill children are not in care and that our staff understands what to do if a child becomes ill or is injured in our care. 
•  Appropriate group size and teacher-child ratios.  We have to, at a minimum, meet the state and local requirements for group size and ratios.  After that, we need to decide for ourselves if these minimums allow us to provide a high standard of care.  Your state may allow one teacher with 6 infants or 20 preschoolers, but can one teacher really provide high-quality care to that many children?  Sometimes we have to exceed minimum requirements.
• All staff members are properly qualified.  Again, our staff must meet the minimum requirements, but we can strive to be an employer-of-choice, attracting and retaining highly-qualified staff members.   While pay is one aspect of getting and keeping this kind of staff, it is only one component.  We can make sure that our staff has paid planning time and knows that we, and the parents, appreciate and respect their work. 
• The schedule and activities are developmentally appropriate.  Children have a daily routine that allows for indoor and outdoor play as well as individual, small group, and large group activities.  Children are engaged in hands-on, open-ended learning activities, rather than sitting at desks doing worksheets.  Of course, this means that we frequently have to explain to parents what their children are learning through their activities as a lot of parents think that if they don’t see worksheets, their children aren’t learning anything. 
• The other components are a little tougher to identify.  I ask my staff or parents to just look and listen.  Does the classroom look organized and appealing?  Is the classroom clean…and are the children reasonably clean (noses wiped, hands washed, etc.)?  Are teachers interacting with children by bending over to talk with them rather than standing over them or calling out from across the room?  Do teachers and children talk to each other and to their peers with respect?  Overall, how does it feel?  We often disregard our gut reactions to things, but our gut reactions can tell us a lot.

In helping parents to understand the components of high-quality child care, and how your program provides such care, you can be more assured that they will enroll their child in your program, keep him or her there as long as possible, and refer their friends to you.

Misty

Slow Reading

Generally, when I talk about reading, I’m talking about children and the importance of each child developing strong reading skills, which includes an adequate fluency rate.  So, when I saw a few articles about a relatively new movement called Slow Reading, I had to see what it’s all about.

The Pew Research Center surveyed Americans age 18 and older, and discovered that 1 in 4 have not read even one book in the past year.  We talk about how important it is for children to read 20-30 minutes every day, yet we, perhaps, forget that it’s important for us as well.  But exactly what DO adults gain from a regular reading habit?

• Enriched vocabulary
• Slowed memory loss in later years
• Deepened empathy from reading about people who are unlike you or in circumstances that are different than yours
• Increased concentration
• Enhanced comprehension
• Reduced stress
• And, if for no other reason…it can bring you pleasure

Since time is often a premium for adults, here are some tips to help encourage you to set aside that time for yourself; kind of like setting aside time to exercise.

• Go out somewhere to avoid distractions—local coffee shop, library, park, book store, etc. If necessary, set a regular time to meet with a group of friends to read.
• Turn off your phone.
• Select a printed book rather than an e-book so you will see it lying around and be reminded that you need to read it.
• Give yourself at least 30-45 minutes of uninterrupted reading time so that you can really immerse yourself in the book.  Hence, the term, Slow Reading.

So, set aside some regular time for reading.  It’s good for you!

Misty

Paid Sick Leave Required?

We heard from our lawyer a couple of weeks ago that California has a new law requiring most employees to receive paid sick leave, effective July 1, 2015.  If you are not a California employer, you may not have this requirement yet, but keep your eyes and ears open.  (At this point, Connecticut is the only other state with this requirement, but more counties/cities are implementing similar policies.)  We had no idea this was coming until we received the email that the Governor signed it into law. 

I think it’s great that employees will have sick leave and it will help to remove the temptation some employees have to come in to work when they are feeling under the weather.  But, I also understand the financial repercussions that this will have on my programs.  We strive to be an employer-of-choice, providing our employees with vacation leave, sick leave, health care reimbursement, and paid planning time.  But, we are currently only able to do this for our full-time employees.  When this law goes into effect, that will have to change.

Beginning in July, each of our employees, including part-time and temporary employees, that work at least 30 days for us, must receive at least 24 hours of paid sick leave each year.  Even at minimum wage, which is currently $9 per hour in California, this will cost me at least $216 per employee per year.  My only decision will be where to get the money.  Unlike many employers, I can’t cut my staffing.  I have ratios to maintain.  So, will I cut pay rates or supply costs?  Or will I raise parents’ rates?  None of them are great options.

Along with this new paid sick leave requirement, there are a lot of communities that are also raising minimum wage, which will also have the same type of impact on our budgets.  If you aren't being faced with this yet, keep your eyes and ears open so that, perhaps, you can have a voice in the decision.

Misty