I know the worry you have right now as a Child Care Center Owner or Director. I have the same worries for my Center.
There are many things we need to think about as we navigate our new norm. The financial impact this is having on all small businesses can be overwhelming, and devastating.
This pandemic has shown us the weakness in Early Education but it also showed us as essential workers and important part of the economy in the USA, your state and your communities.
We are still in the middle of the crisis, but as we navigate a new norm, you need to make really informed decisions. An important part of leading your Center is financial oversight, whether you physically doing the accounting or not.
We need to have a budget that we can work with, daily. Who creates a budget? You can or you can outsource it to a financial expert, like a Certified Public Accountant (CPA) or Bookkeeper. How can you create a budget?
- · You can create a budget using an account system like Quickbooks or PeachTree. Using the help feature search how to create a budget.
- · Contact your CPA, Accountant or Tax Preparer and see if they can give you a budget or ask for help in creating one.
- · Watch a YouTube video on how to create budgets. Two years ago I wanted to learn more about Cash Management and Expense Reduction techniques, they are out there! I watched YouTube videos, learned who was teaching small business finance and followed them on social media, signed up for their emails (like you signed up for ours!), and implemented the changes. Search YouTube for how to create a budget.
The budget tell us 3 things, the first is Revenue. Revenue is the income you bring into your Center, anything your families or Teachers pay for is income. This could be:
- · Tuition
- · Activity Fee
- · Returned Check Fees
- · Lunch Fee
- · Bus Fee
- · Training Fee
The next section of the budget is Expenses This is everything you pay for. This could be:
- · Payroll
- · Payroll Taxes
- · Rent or Mortgage
- · Utilities
- · Food
- · Cleaning Supplies
- · General Supplies
- · Phones and Internet
- · Services
- Taxes
The last part of our budget is the results of all of the money we earned and all of the money we want to spend, this is called the Profit or the Loss. Profit is when you make money and Loss is when you didn’t have enough money to make your expenses.
In summary:
Revenue (money in to the Center)
Less Expenses (money out of the Center)
Equals Profit (+) or Loss (-) Income
As we work through these uncertain times, you need to have a budget created for June – December. As your State licensor advises you what your enrollment can look like or what you may need to do to your space, go look at your budget. Make the adjustments and see what the results look like. THEN make your decision.
I know you may know your numbers in your head, and at one time I would have agreed with you. The past two years I have taken a lot of courses on Finance and found that certain monitoring habits, along with a good CPA, can really help. In a good market, and even in poor markets, my budget process has been helpful.
This will be the first time I’ve gone through an economic crisis like this and if I had to choose the most important thing to get back in action – I’d say the budget. It drives what and how we can support our students and our Teachers.
I also know, you can’t have the perfect budget that delivers a profit in this market. BUT what I can say is that we need to continue to educate ourselves on this topic and explore all avenues.
Think outside the box. Just because we have always done it this way, maybe we need to just look at “that way” and see if it’s possible and potentially supports the budget and the needs of the Center.
What will you commit to do this week for your Budget? Continue the conversation with me in our private Facebook group for Child Care Center Owners and Directors. CLICK HERE to join.
