In June, the last bell of the school year will ring. The result? Parents need to find childcare for their children over the summer. This influx of children brings an influx of work for childcare business directors who are already managing arguably too many tasks, like any business owner. What’s usually the first thing to slip off that to-do list? The finances! 

No judgments! I’ve also been in seasons where I’ve let more things slide into the optional category than I should have. It doesn’t have to stay this way! I have plenty of experience working with daycare and childcare businesses in several capacities. Let’s get into the many ways you can maximize your finances and how I can help you do it!

Childcare Business Finances Explained

Like any industry, the childcare industry comes with its nuances. 

For starters, a childcare centre’s finances are not one-size-fits-all. Many childcare businesses in Canada are non-profit organizations. On the other hand, we have regulated childcare businesses that are eligible for subsidization by the provincial and federal governments. These businesses must stay up-to-date on a set of standards and certifications to remain classified as ‘regulated’ adding another level of complexity to their fiance recording. Parents can apply for the Saskatchewan Employment Incentive (SEI) program or the Child Care Subsidy Program (CCS). 

Childcare businesses also have a long list of expenses, some unique to the industry. This includes licensing and accreditation fees, food and snacks, security,  classroom supplies, safety features, play equipment, and transportation fees. These exist on top of more standard expenses like utilities, rent, marketing, administrative costs, payroll, maintenance and repairs, and taxes. Whew. That’s a lot to keep track of! 

On top of this, you’ve got the complexity of their staffing. Childcare businesses’ payroll expenses are double compared to others as they must adhere to the adult-child ratios stipulated by the provincial government. This means that for every 8 children, 1 adult is required to supervise. So, if your classroom has 16 children you need two full-time employees supervising them. Now the payroll expense is doubled, just like that. For some perspective, a bookkeeping company needs to decide how many bookkeepers to hire and they know one bookkeeper can easily manage 16 clients. Therefore, they’re only paying one person to do the work of 16 clients, but in a childcare setting the number is doubled! 

How To Manage Your Childcare Business Finances

Well, as you just saw, daycare directors have a lot of tasks and factors to manage! They also have to ensure their capital and operating expenses are paid on time, invoices and receipts are sent out promptly, supplies are secured, staff are certified, parents are happy and informed, and so on! 

So, amidst all that, how do childcare businesses stay profitable and organized? 

Here are my top tips when it comes to building successful finances for childcare businesses: 

  • Understand the job of every dollar in your business. As we’ve already covered, the money coming into a childcare business has to go in many directions. Make sure the bigger picture is in mind when it comes to dividing your income and that it’s organized based on due dates. 
    • Implement Purpose First! You’ve heard of Profit First, now get ready for Purpose First! Since many childcare centres are non-profit organizations, profit isn’t the goal. We replace Profit with Purpose, striving to keep the mission at the forefront and setting up cash flow to drive their purpose.
  • Utilize financial projections. These can be your best friend when you’re deciding what full capacity looks like, what services you’ll offer, and what your profit will look like over time. A financial projection should include your monthly expenses, revenue forecasts, and a break-even analysis. 

How to Manage Your Childcare Business Finances

If you’re in the childcare business, you’re already in a pretty good spot! The childcare industry is growing for a couple of key reasons: 

  1. The global population is growing.
  2. Households with two working parents are increasingly common.

However, childcare businesses are also complex and operate within thin profit margins, especially if they’re community-based, not a chain. Plus there are the added elements of non-profits and government involvement!

There are a multitude of ways to affect and improve your finances: 

    • Streamline your processes so you, as the director, aren’t spending too much time wading through administrative or financial messes. You can also smooth things out by outsourcing your bookkeeping! Most of the childcare centres I work with love this option because it means they have time to take care of the kids and keep the families feeling welcome while I take care of the monthly reporting. 
    • Get clear on your offerings, and consider expanding them to increase profit. This could include after-school programs, summer camps, events, and more. 
  • Take any financial assistance you can get! As a childcare business, you may be eligible for tax benefits that apply to rent, supplies, utilities, maintenance, equipment and more. You could also save on start-up costs and qualify for grants or funding. If your childcare business is based in Saskatchewan, find all the information you need here. If not, do a quick Google search to find the possible financial perks in your province/state! 
  • Reach out to your community! Especially here in Saskatchewan, a community’s endorsement can go a long way. If people know who you are and what you’re about, your business will sell itself. Focus on providing quality care and sharing your work with the community. 

And, if you’d prefer, I can take some of the workload off your shoulders myself! In the past, I have assisted satisfied childcare customers with invoicing and receipts, bookkeeping and accounting. I’m also happy to share financial insights and updates with an organization’s board! Hear from one of my wonderful clients here: 

“One of the big differences I noticed was the reduced stress I had. Knowing I can rely on Janet not just for her financial knowledge but for her knowledge of what we as a childcare centre need. The second big difference I noticed is that I no longer feel like I am no longer crunched for time. Janet makes it easier to keep things organized, time efficient and easy to manage. She has created quick and easy ways to share any financial information between us so I can get on with my day.”

—Melinda Martens, Director of the Warman Childcare Centre

From coaching to fulfillment to a listening ear, I’m here to help. Let’s set up a meeting before the busy season gets here!