If you are like most childcare owners, you started your business because you love kids and have a passion for providing a safe and loving place for families to bring their kids. And, if you are like those same people, you probably also find the administrative side of running your business to be a HUGE, time-consuming source of stress that takes you away from focusing on improving and growing your business! Based on our experience, here are the four biggest administrative pain points in managing and growing a successful childcare business:
Pain Point #1 – Producing Timely and Meaningful Financial Statements on a Regular Basis
46% of all small businesses fail because of bookkeeping errors. Businesses that are not producing complete financial statements on a regular basis don’t know how they are really doing financially. This leads to inefficient financial management, lower profitability and ultimately difficulty securing funding when needing it to grow.
A complete financial statement package (including income statement, balance sheet, cash flow statement and trend report) produced no later than 10-14 business days after the end of each fiscal period (month). Every business owner should understand what each of those statements is telling them to in order make timely business decisions.
Pain Point #2 – Knowing Where to Start in Using Financial Statements to Manage and Grow Your Business
Cash flow problems put 82% of small businesses out of business. A business owner that does not utilize budgets integrated into financial reports, use trend reports or benchmarking data to track revenues and expenses or reporting/forecasting to manage cash flow, does not have the information needed to make timely business decisions.
Create a budget at the beginning of the year and integrate that budget into monthly financial reports. On a monthly basis, utilize benchmarking reports to compare results against industry standards and review trend reports to watch for red flags and negative trends with revenue and expenses. Finally, have tools to manage and forecast cash flows to enjoy good times and be prepared for tough times.
Pain Point #3 – Poor Employee Experience Leading to High Employee Turnover
58% of all new employees are likely to stay at a company for three years or more if they had a great onboarding experience. High employee turnover isn’t just an expensive annoyance to the business owner having to recruit, onboard and train new employees. It also leads to low client satisfaction. Teacher turnover is the #1 reason parents leave childcare centers. The students don’t understand why their favorite teacher leaves and an unhappy child results in an unhappy parent.
Utilize a system that allows for an electronic onboarding process that creates a better employee experience right from day one! When an employee doesn’t have to fill out pages and pages of forms during their first few days of employment, they come to see you as an employer that is respectful of their time and utilizes technology, both important to younger employees and creating a positive culture.
Pain Point #4 – Multiple Employee Tracking Systems Creates Frustration and Stress for All
Business owners that have to enter employee data in multiple places or transfer employee data from one system to another are going to have problems – not if, but when. Using systems that don’t connect wastes a lot of time managing employee data and inevitably results in payroll errors or being out of compliance due to manual processes with multiple points of data entry.
A business owner should utilize one system for each employee touch point from job posting, applicant tracking, hiring, and electronic onboarding to regular payroll processing.
Are you producing (or getting) a complete financial package by 10-14 business days after the close of every fiscal period (month)? Are you using budgets, benchmarking, trend reports and cash flow forecasting to manage how you run your business? Do you have an employee onboarding process and system that creates a positive experience for your employees and lets them know, from Day 1, that your business is a great place to work? Do you have one streamlined process and system for managing your employees’ time and attendance, payroll and HR needs?