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!
During last decade – and beyond – I’ve heard countless money myths being waved around as reasons for hesitation when it comes to taking a step into owning your own childcare business. And while some of the rumors might be a hangover from days gone by, most of them are just factually incorrect and are certainly nothing I’ve ever witnessed.
There’s only so much time to write these blogs and you’ve not got all day to read them, have you?! So in this post, I’m busting three of the myths that keep popping up in Childcare Ninja conversations. Read on if you’d like to find out why you need to ignore the money myths and listen to your heart!
Money Myth 1: Expensive to get going
Not true! There are tonnes of ways you can start your childcare business on a budget. I’ve written a few blogs on this, but it is possible to start a wildly successful childcare business with limited financial backing. I know because I’ve done it! Cut back on expenses – do you need those subscriptions or the organic food? Could you strip it back to the bare minimum temporarily until your profits start coming in?
Look into ways of getting more knowledgeable that don’t involve spending money or spreading the cost between yourself and other childcare facilities. Sign up to mailing lists and free trainings and teachings around legislation and regulations.
Setting up your childcare business doesn’t have to be expensive. You don’t need an all-singing, all-dancing childcare business to get going. I think the phrase is “done is better than perfect”. Don’t let fear of getting started put you off.
Money Myth 2: Childcare owners can’t make a profit
This one always makes me laugh, because my business is testament to the fact that you most certainly can make a profit! Don’t be intimidated by the money talk around childcare. A lot of the chatter is around the issue that our industry is not valued by many in our society, despite us being a lifeline to families. The recent pandemic highlighted how essential we are (which we all knew!). But the debate as to whether we’re profitable is nonsense.
You can have a successful childcare business that brings in a profit. It takes hard work, effort and planning, but it is definitely achievable. I’m working with a number of childcare business owners – my Childcare Ninjas! – helping them scale up and grow their businesses to become even more profitable.
Money Myth 3: Hard to keep up
Funnily enough, this money myth is a teensy bit true. Yes, it’s sometimes hard to keep up with changing policies and legislation. I could probably dedicate an entire year to reading documents and keeping up with current practice. And of course all the regulations are essential so we have to keep on top of it all.
However, when you’re savvy and have a great team around you, you can split the training sessions between you and share the knowledge when you get back. You can sign up to emails that will keep you up to date, and you can join networks with other childcare businesses. There’s also a great Facebook group I’ve heard about, for Childcare Ninjas like you 😉
Tips for battling the money myths
Over the years I’ve been running my own childcare business, I’ve discovered some ways that you can combat the money myths out there! Here are a few tips to help you on your childcare business journey.
Firstly, surround yourself with encouragers and people who support your dreams. It’s so much easier when you’ve got like-minded people giving you motivation and rallying around you. It’s also important that you can trust them and know that they have faith in your abilities. There’s nothing worse than constantly having to second guess yourself because of negative comments about things that you didn’t ask for an opinion on.
Be wise with your money
Second, y’all know I love systematizing, so you won’t be surprised to hear me say this! So here goes: Get yourself some systems that help you manage your business better. This will save you time and money to invest elsewhere in your childcare business. When you’re more organized and things are streamlined, you can budget better.
Next, I’d like to encourage you to invest in yourself. With the savings you make on time and with budgeting better via systems, you should put that towards bettering yourself. Learning never goes out of fashion! And educating yourself and self development is never a waste of money. Whether that’s additional childcare training or a business diploma, the decision to prioritize YOU as a business owner is pivotal to your success!
My last tip is that you get help with finance. I’m not talking about loans and borrowing money (although if you’re going to do that, make sure it’s ethical and in your best interests! Steer clear of sharks). No, I mean getting your head straight when it comes to finance. Take time to get some money mindset coaching, and another idea is to learn how to do your own accounts.
I hope you’ve found this blog super helpful. If you have, share it with a friend!
Also, if you appreciated the tips in this post, there are plenty more over ideas and inspiration 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!