Running a daycare center is not an easy task with so much to take care of beyond taking care of children. At the top of your list is likely budgeting and how to keep track of the constant expenses and fees you payout. Some of this may even be government grants to keep your business thriving.
How can you manage it all if you still calculate your budget on paper or on outdated software? It is time to digitize your business expenses using a more efficient platform.
What budget items should you keep track of so you don’t lose sight of things? Take a minute to learn what to focus on and how best to manage your daycare assets.
Items That Take Up the Bulk of Your Budget
All aspects of child care and teaching can take up to between 50% and 60% of your budget. This usually involves paying teacher salaries and buying classroom equipment. It may also involve all the administrative and enrollment fees required.
Doing a deeper dive, the salary of your daycare teachers could equal multiple thousands of dollars annually. While it depends on how many teachers you employ, a typical daycare teacher salary is $20,320 per year. While this may look low on paper, it can add up considerably if you need a large group of teachers to accommodate child enrollment.
Investments in classroom equipment can also be expensive to provide kids with a decent preschool education. In your main daycare center, you also need to provide toys and other activity items that keep kids occupied to prevent boredom.
With today’s kids growing up with technology, this may mean providing them with tech like tablets or hi-tech games. These are not cheap to purchase compared to items kids played with two or three decades ago.
About 15%-20% of your budget likely goes to administration and supervision tools. In other words, paying out administrative salaries, buying office supplies, and paying your phone bill as just a few.
In the case of administrative salaries, you may have a larger staff in this area than you do with teachers. Your office staff alone may be considerable, which likely include accountants, IT professionals, and even marketers. Their salaries are sometimes considerable.
Investing in office equipment is also very expensive due to technological needs. New computers, printers, scanners, and even mobile devices are essential. All of those cost thousands of dollars, unless finding bargains buying used or refurbished.
Overall, working capital to get your daycare center operational could cost over $31,000 for just eight months. Keeping track of all that is overwhelming if still figuring your expenses on paper.
You also have to feed the kids you care for each day. Buying food, paying kitchen staff, and investing in kitchen equipment starts to add up as much as the other above expenses.
To give kids the healthiest food options possible, you might have to invest in organics, which always cost more. Some kids might also have allergies or other special needs in their diets, leading to extra food purchases to accommodate them.
The typicalsalary of a daycare cook is around $21,802 a year, falling in the ballpark of daycare teachers. While sounding cheaper than an IT technician salary, it still adds up if you employ a team of cooks in the kitchen.
Kitchen supplies are not cheap either, not including the cost of repairs and maintenance to prevent any slowdowns in food preparation.
Maybe you own the daycare center where you operate. Even then, you have to deal with property taxes every year. In a renting situation, that can become even more expensive.
Consider some states (like Maryland) demand a certain amount of square footage per child you have enrolled. It could mean renting a large facility to fulfill these state rules. A larger place is obviously going to cost you more in rent.
Also, calculate what kind of maintenance you need done in your building on a regular basis. What needs repairing to ensure the safety of your staff and the kids?
Costs of maintenance can sometimes be overlooked if keeping tabs of your expenses on paper. What if you could have a program that looks ahead for you with metrics to show you when you need to invest in repairs?
Other Expenses to Consider
More daycare expenses exist. You likely already know this, but what are the things you currently overlook? Some of your expenses may be more expensive than you realized without using business metrics.
For instance, what are you really paying in way of health insurance for your employees and perhaps for students? If you have your premiums taken out through an autopay system, you might not even know how much you pay per month.
Car insurance and license fees often work the same way. These auto-payment systems are sure to dig into your budget more without you initially realizing it.
When adding in on-site social services, you see how little room you have for-profit without properly monitoring your expense sheets.
What Kind of Business Reporting Software Do You Need?
Going digital with the right business software is the smartest thing you can invest in to avoid costly mistakes. Our Prime Child Care software is available to give you comprehensive business reporting that is easy to analyze and comprehend.
This platform gives you a transparent global view of everything you are doing so you save money where appropriate and eliminate any waste. You get clear financial reports, rosters, operational reports, tax documents, classroom ratios, and so much more.
Plus, you can track some of the more sideline expenses you need to focus on, like government grants. These are often important for daycare centers to keep themselves above water, especially in tough economic times.
We encourage you to try our app to help you get a better visual picture of how your daycare center works. Visit us to learn how you can schedule a free consultation.