We offer ongoing long-term profit improvement services for childcare centers:
Bookkeeping and Virtual Chief Financial Officer (CFO) Service
Is your childcare center’s bookkeeping several months behind because either you, the owner, does it yourself, or you use a bookkeeper that is behind in getting you timely financial reports and information to manage the business?
- An addition problem with many bookkeepers, is that few bookkeepers understand both bookkeeping and the childcare center industry, so they can’t make recommendations to improve profits. Some bookkeepers may also make a mistake in preparing the financial statements, but, if the bookkeeper does not have the childcare industry knowledge, they may not recognize that a mistake was made when reviewing the financials before sending to the business owner.
Many childcare owners tell us something like “I receive the financial statements, but, I have no idea what they say” or “I get the financials, but I file them away and I don’t really look at them”. Beyond reading the “Revenue” and “Net Profit” figures, these business owners often have little idea of what the financial statements show them, or, how a review of the financials each month can help increase profits.
We can work with your bookkeeper, or help you get a better bookkeeper, and offer advice on a monthly basis to improve your childcare center financial performance.
- Do you know the profitability of each classroom?
- Do you know the total special discounts given each week (or month) compared to your standard tuition rates?
- Each class requires a certain number of hours of staffing to be in compliance with teacher/children ratios. Do you know how many hour of staffing labor does you center have, per week, over the hours required to meet ratios?
- Do you know when hiring a new employee can get you tax credits? We can help you get the tax credits that you may not know that you are missing. (For many centers, the yearly average tax credits are $2,400 to $4,800.) (For a new childcare center location, tax credits can exceed $50,000 depending on the location where the center is located.)
If you just have, or are looking for, a low priced bookkeeper, who just provides a basic income statement as required to prepare the year-end taxes, our service is not for you. If you are looking for a bookkeeping service and Virtual Chief Financial Officer (CFO) service that will make you more money than our fees to you, contact us.
Are you an Absentee Owner? – Virtual Childcare Owner Service
Depending on how much time you are willing to, or able to, spend, or not spend, on the management of the childcare center, Childcare Brokers can take on some of the daily, weekly, and monthly management roles that an childcare owner does. We call this service the Virtual Childcare Owner Service. We have at least two daily contacts with the director as we review by room enrollment and staffing levels, make sure that contacts with prospective parents are followed up on, and all of the other tasks that successful absentee owners do. We would have much more than two daily contacts with the director in the initial month(s) of this service. We can also do the monthly bookkeeping so that you can see how profitable the center is on a monthly basis.
Most of the time, employee directors don’t provide the same level of oversight to a childcare center that a business owner provides; because the center’s money doesn’t go into, or come out of, the director’s pocket like it does with a business owner. We have an unique expertise with the business aspects of childcare centers from an entrepreneurial viewpoint. You can feel comfortable that your center will have the high level of entrepreneurial oversight that usually only entrepreneurs provide.
Our Virtual Childcare Owner Service is generally for:
- A childcare center owner who has had a health emergency and can’t spend time managing her/his childcare center from the hospital or other health care facility. The center has a director who is capable of running the center on a daily basis, but:
- The director needs oversite on the business aspects of running a childcare center, or
- For basic business accountability, the owner would prefer to have a third party oversee the business aspects of the childcare center.
If your health emergency will prevent you from returning to the center, our Virtual Childcare Owner Service can help maintain profits, and the valuation of your center, until your childcare center is sold. If potential business buyers see a childcare center with decreasing profits because the owner is not able to manage the center and has health issues, the buyers would likely be able to negotiate a low price. We prevent that from happening.
- The truly absentee owner who wants to spend minimal time overseeing the childcare center.
- A bank or lender who is about to foreclose on a childcare center and instead of planning to close the center, wants to keep the childcare open because an open childcare center is worth substantially more than a closed center. In our experience, an open 10k sq. ft. childcare center, even one that is losing money, will sell for $250,000 to $350,000 more than a closed childcare center. If you work for a bank/lender that is moving a childcare center to the special assets units of the bank, call us.
- If you own a childcare center that is about to be foreclosed on, you likely also have a personal guarantee on the loan to be foreclosed on. You may be able to reduce your personal guarantee obligations by $250,000 to $350,000 by recommending to your lender that they keep the childcare center open and that Childcare Brokers’ Virtual Childcare Owner Service be used.
We can provide a Virtual Childcare Owner service that provides your director with the comprehensive daily, weekly, and monthly oversight (from both a former childcare center owner and Jay Whitney) that is normally provided by absentee owners. We provide assistance in all business aspect areas, with the goal to increase enrollment, control costs, and make it meet your profit goals. The Center must have an on-site director.
Because of our unique combination of understanding the business aspects of childcare, business valuation, accounting, and having a former childcare owner who started and owned three childcare centers of her own, our profit improve consulting fees are generally paid for in additional owner benefits within months.