Understanding How To Create A Childcare Business Budget

The purpose of budgeting is to help you forecast your income and expenditures. It will also help you predict your profits in your childcare business. Your budget is a great tool for decision making. It also helps you monitor your business performance. Budgeting is a critically important part of business planning, to help you become the best business owner and manager of your finances that you can be. You must be able to predict whether your business will make a profit or not. That way, you can monitor and guide your spending.

There are times in the childcare industry where profits are not plentiful but your business will break even. Then there are times when your profits are plentiful and that’s the time for you to know what to save and when to save your money.

The basic purpose of your budget is to provide you with the model of how your business might perform, financially speaking, in certain strategies, events and plans, and to help you to see the bigger picture for your program. So many childcare business owners are stuck in that same business model; they’ve been in the industry for a number of years and have not grown at all. They haven’t grown because they haven’t produced a budget to help them forecast and see where they’re heading financially. Or they’ve never created a business plan. A business plan includes your budget, which helps you forecast your income and expenditures and forecast your profits.

The purpose of budgeting is to provide you with the financial framework for the decision-making process. For example, if there was something that you need to do that you haven’t planned, you know that you have to check your budget to see if it is something you can afford to do. Of course there are times when you just go with things and you purchase things for your business because it just feels right. I fully understand that sometimes there are things in your business that you have to have because it just feels right.

There is a side to growing your business and that is managing it more responsibly by having your expenses under control. This means taking full control of swiping that debit card. When you budget for groceries, utilities, mortgages, payroll etc., you must remember that these things have to be met in your business every single week, every single month, without fail. Be sure that when you swipe that card that you’re thinking responsibly about what’s coming up ahead. For example when your budget shows that you’ll have surplus cash, that’s when you can swipe your card as your income rather than you swiping it as if it was your business income.

You’ve got to be wise when it comes to budgeting, especially in the childcare industry. I’ve seen childcare business owners budget at 100%. You should never budget at 100%!  In my Childcare Acceleration Program, I give you the industry norm budget for what everything in your business should cost. This will help you to see if you’re on target with the industry norm or going over it. For example, so many people ask me what percentage of your finances should go towards payroll. I’ve learned from my own childcare business that at least 65% to 80% of your income will go towards payroll. This is why it’s so important for you to understand what to do with the other 25% to 35% that’s left in your budget.

If you need help with creating a budget or understanding the purpose of a budget, I would really suggest that you join me in my Childcare Acceleration Program, where I teach you how to systemize and organize a budget, how to charge the right prices, and how to get paid $10,000 to $20,00 more each year by doing one simple task.

You can find out more about the Childcare Acceleration Program by logging onto childcareacceleration.com. I look forward to showing you how to use your budget to monitor your business performance, how to help you make the right business decisions, and also how to help you forecast your income and expenses and create profits in your business.