The key to success for any business is a well-managed budget. We know that doesn’t sound very glamorous or innovative, but the better you can manage the debt, spending, and income for your childcare center, the sooner you’ll be able to focus on what makes your childcare center so amazing: your unique approach to early learning and play. Ensuring that your budget is in order and running smoothly is the solid foundation you need to grow your business.
Whether you’re looking to refresh the finances for your center or start a brand-new budget, this quick list of budgeting basics will help you.
- Calculate your projected cash flow: how much cash do you expect to come in to your business, and how much will be going out?
First Children’s Finance has created a helpful Excel spreadsheet that lays out the necessary factors to take into account to come up with your projected cash flow.
- Identify funding opportunities for childcare centers in your area.
There are a number of state and federal grants and resources available for childcare businesses that your center may be eligible for! Two great places to start looking are The Child and Adult Care Food Program offered by the USDA and the Childcare and Development Block Grant.
- Research and factor in the possible tax and employment benefits.
There are certain tax and employment benefits that apply specifically to small businesses in the childcare sector. These vary from state to state, so it’s important to do your homework and find out how these may affect your quarterly budgets! Contact your local Child Care Resource and Referral (CCR&R) agency to find out how these tax codes apply to your center.
- Follow the appropriate staff-to-children ratios for your area.
How many people you employ obviously has a major impact on your bottom line. Make sure that your staff numbers are in line with your state or region’s requirements, and that you aren’t over-hiring. Check out the website for the National Association for the Education of Young Children (NAEYC) to learn more about these ratio guidelines.
- Seek out center locations with reasonable rent prices.
An astronomical monthly rent is a surefire way to bring even a thriving business down. Opt for adequate space and amenities over a flashy location—so much of advertising has moved off the streets and onto the internet.
As a small business owner or operator, you are most likely responsible for not only structuring your budget, but also creating your center’s curriculum, sending out payroll, filing taxes, keeping track of enrollment, monitoring children’s history, and so much more. You’re probably on the lookout for any way to save more time and money. Our infographic Cutting Through the Clutter will explain how the right software solution can make budgeting (and so much else) a breeze for your childcare business.