If I asked you right now what your profit was going to be at this moment, would you know? Have you got a system in place to give you a birds-eye view of what’s going on in your childcare business finances right now?
It’s important that you nail this as soon as possible, so you can see at a glance what you’re making and how much profit you’ve got.
I’ve spent the last few years really honing in on making sure I have a cash flow system within my financial system that allows me to see what’s really going on – so I can see what my profit truly is.
Read on for tips on putting profit first and making your childcare business more streamlined financially.
So why do we need to know about profit?
When it comes to finances, you want to be able to get a quick and easy-to-understand overview. This is so you can actually pay your bills on time, not miss essential payments because you’ve prioritized things, and – vitally – you won’t have so many Childcare biz surprises!
One thing I’ve looked at and has helped me a lot is the “profit first” system of cashflow. I’ve also written more about profit here and lessons I learned from watching The Profit!
How does “Profit First” work?
I read the book “Profit First” by Mike Michalowicz and boy oh boy it was a game changer! A massive help. It’s helped me see where I’m making a profit easily, where things are going more clearly. Which means I have a much better handle on payroll – which my staff appreciate! – and obviously this helps me keep the whole taxes thing under control too.
Profit First is based on a waterfall system where all income flows into your top income account, and then on the 10th and 25th of every month, this cash is allocated out to the other accounts – based on your current allocation percentages. So you can have accounts for Tax, paying yourself, profit and expenses, that you put money into twice a month. It’s flexible to suit your needs and definitely worth looking into!
Getting finance systems in place!
Creating a system doesn’t have to be hard to understand, and I love the way the author, Mike, broke it down in a very simple manner. It really helped me get a better grasp of where my money’s going and I’d love for you to have the same.
The earlier in your business you can do this, the more ease you’ll find in your business regarding finances.
I’ll be going Live tonight in my Facebook group, talking about, “Creating a cash flow system that’s simple”. Do come and join me, I’d love to share the process I use and how I adapted Mike Michalowicz’s book “Profit First” model to work for my Childcare business. I’ll be discussing how to create a system where you can be clear on your profits and expenses and easily get a ‘snapshot’ of your finances at any given time.
There’s going to be some super tips that you’ll want to implement! Never miss a bill again or find yourself short at the end of the month!
So pop it in your diary, tonight 8 PM EST in my group. Join the FB group here. If you think any of your Childcare Biz owner friends would also love it, send them the link!
Have you read the book “Profit First”? How did you find it?
If you haven’t had a chance yet, I’d love for you to read the book, and put together a simple cash flow system that is easy for you to follow. Are there any other money books that have helped you in your business or life? I’m always looking for recommendations – hit me with your lists in the comments!
Come and let us know over in the Childcare Ninja Facebook group! We’re an army of childcare professionals who are sharing ninja-sharp skills to transform our businesses into childcare empires! This is Childcare Ownership all Grownup! Interested in becoming a part of the community? Join us for more tips on how to make your childcare business the success it deserves to be! And don’t forget to follow us on Instagram!
I hear you, Ninjas! “Childcare profits?! Hide and seek?! Finance…what?!” I know, I know! We didn’t seek to be in the childcare game aiming solely to make profit. It’s all about the kids, right? However, to be able to afford to provide exceptional childcare, you’ve got to make a profit so you can reinvest in your business and up-level your services.
We have got to talk about childcare Profits! It’s important! And, boy oh boy, do I know how scary the “finance” part of business can seem. I used to spend hours fretting over it all. The in-comings, the outgoings, the profit margins and looking for ways to increase the amount I was making so I could improve things all the time.
Nowadays though, I’m not worrying about it anywhere near as much as I was, so I thought I’d share how with you.
Create finance systems
My favorite subject! Systems! And I LOVE having systems in place to keep my business finance in check. Firstly, break your financials down into bitesize, manageable tasks. My advice is to have daily, weekly, monthly and quarterly tasks, so you’re not left playing catch up at the end of the quarter! I’ve made a super useful resource which will really help you get on top of your finances. Check out my fab finance freebie here!
Systematizing is important and it’ll save you time and money. Why waste hours of your life back tracking your invoices and filing stuff for days? Or doing something by hand that a whizzkid has figured out, if it’s a simple and automated way for you to handle finances?! It is a no brainer! Get those systems sorted, Ninja!
Learn about finance from others
It might look a little different, but the bones of a childcare business are like any other. You can make a good living out of your childcare profits, as well as investing in your business. I think we forget (or maybe feel embarrassed?) about talking about the profit possibilities that come from providing essential services to families. And that’s why I shout about it all from the rooftops! Making a profit shouldn’t be taboo. So I will share my knowledge from years of running my childcare business with you because we can learn so much from others!
By learning from others you can figure out how to make finances simple. Read the blog posts I share with you, check out other childcare business owners (and other areas too!), and most definitely join a community where you can ask questions and share resources. (Ahem, have you joined our Childcare Ninjas Facebook Group yet? It’s a great, safe place to hang out and get to grips with your childcare business!)
Get financial help early on!
I understand what it’s like and finances can feel truly overwhelming, therefore I urge you to reach out to someone! Don’t prolong the pain – seek help from an expert sooner rather than later. Feel free to ask in the Childcare Ninjas facebook group, because there’s bound to be someone in there who can point you to some awesome resources. They’re a fantastic bunch of humans and always keen to be supportive.
If you’re not sure who to talk to in more depth, ask your local friends – find out the name of a good accountant. Word of mouth recommendations are (nearly) always absolute GOLD! And don’t forget we’re living in the digital age! You’ve got oodles of online groups at your fingertips to learn about finance. If you need a little more guidance, there are some well-regarded coaches you can work with, on anything from money mindset to investing your profits wisely!
Hopefully these tips have helped you feel more confident and given you some clues about where to begin with your childcare business finance.
Before you go, if you’re keen to get started on putting systems in place, and getting your finance in order RIGHT NOW, I’ve created a finance bundle especially for you. Everything you need in one place! It’s a small, one time investment, but worth every single penny! You get a whole lotta goodness included, and the templates come in both Printable and Online formats, so you can access them in a way that suits you and your childcare biz!
Remember: Don’t shy away from your finances!
And don’t forget that I also have a free Facebook community for childcare providers. Come and join in the conversation here. We’d love to meet you and hear how you’re getting on.