{"id":8153,"date":"2024-10-17T09:34:02","date_gmt":"2024-10-16T23:34:02","guid":{"rendered":"https:\/\/1placechildcare.com\/au\/?p=8153"},"modified":"2024-11-13T08:06:01","modified_gmt":"2024-11-12T22:06:01","slug":"financial-planning-in-childcare-virtual-coffee-with-jo-bromilow","status":"publish","type":"post","link":"https:\/\/1placechildcare.com\/au\/financial-planning-in-childcare-virtual-coffee-with-jo-bromilow\/","title":{"rendered":"Financial Planning in Early Learning: Virtual Coffee With Jo Bromilow"},"content":{"rendered":"

\"\"<\/p>\n

We had a virtual coffee recently with Jo Bromilow<\/a> from CHAMP Enterprises<\/a>. Jo highlighted the importance of preparing for financial changes, the necessity of budgeting for the future, and the vital role that directors and coordinators play in maintaining accountability. Her insight shed light on why regular reporting and having a qualified financial partner are indispensable for long-term success in early learning operations. In this interview, Jo delved into the critical components of financial planning, offering valuable advice for both nonprofit and privately-owned centres.<\/p>\n

What are you most passionate about in the sector right now?<\/strong><\/p>\n

I\u2019m very passionate about the changes happening in the early learning sector right now. One of the most important developments is the wage increase for staff in services, which is well-deserved. These educators and carers are responsible for looking after our future\u2014our children. However, while this increase is fantastic for the staff, many centres, especially nonprofit ones, haven\u2019t been financially prepared for these changes.<\/p>\n

At CHAMP, we’ve been working behind the scenes for the last 12 to 18 months to ensure we could accommodate the rising costs and still keep the business moving. We\u2019ve had to plan for these increases by making sure we have reserves in place, not just to pay our staff but to ensure the financial stability of the centre in the long term. It\u2019s so important that centres have a team or individuals who understand the industry from an accounting perspective, especially when it comes to preparing for these kinds of financial changes.<\/p>\n

Would you say financial planning is the top priority for ECEC right now?<\/strong><\/p>\n

Absolutely. Financial planning and budgeting are crucial, and it\u2019s not just about understanding that they’re important. A lot of services don\u2019t understand the actual moving parts of their business that need attention. For instance, a lot of centres may not fully grasp how to make sure they have enough money in reserve to survive these changes. What\u2019s more concerning is what happens when the government\u2019s grant funding runs out in a couple of years. If centres don\u2019t have proper financial plans in place now, they risk closure when that funding stops. This is especially true for nonprofits, which I\u2019m particularly passionate about. I\u2019ve worked with nonprofit organizations for nearly two decades, and it\u2019s vital that they remain viable and can continue providing care and education for years to come.<\/p>\n

What would you say are some of the key elements of a strong financial plan for an early learning service?<\/strong><\/p>\n

Well, to start, it\u2019s essential that centres look at the bigger picture and think long-term. They need to understand their demographic\u2014how many children are in the area, how many were born recently, and when those children will be starting in their programs.<\/p>\n

For example, we can expect a wave of “COVID babies”\u2014children born in 2020\u2014who will be starting preschool and kindy soon. Early learning services need to plan for this surge. In addition, they need to think about other costs, like rent increases, and how their lease agreements might affect them in the future. A strong financial plan is essentially like putting together a jigsaw puzzle, and unfortunately, many centres aren\u2019t thinking about all these pieces.<\/p>\n

It\u2019s vital that services develop a business plan and budget that looks three to five years ahead. This forward planning allows them to adapt to any changes and ensure that they\u2019re financially prepared for the future.<\/p>\n

What are some red flags that early learning services should be aware of in their financial planning?<\/strong><\/p>\n

There are several red flags that can indicate financial trouble ahead. One of the biggest issues is overspending in key areas like wages, crafts, food, and software subscriptions. For example, when a new director comes in, they often bring in new systems and tools but don\u2019t get rid of the old ones, meaning the centre ends up paying double for things they don\u2019t need. Another common issue is with wages, particularly when it comes to ensuring that ratios are met and when dealing with special needs children who may require additional staff.<\/p>\n

A lot of centres also overspend on vacation care, particularly with transport costs. I\u2019ve seen centres spend over $10,000 on transportation alone during a two-week vacation period. This is where centres need to ask themselves whether they\u2019re actually making money from these programs or if they\u2019re simply covering costs.<\/p>\n

At CHAMP, we provide our clients with monthly reports so they can see where their money is going and identify any areas of overspending. These reports allow directors and coordinators to analyze their budgets and make adjustments before things get out of control. Regular reporting is essential for staying on top of your finances.<\/p>\n

What would you consider signs of financial success?\u00a0<\/strong><\/p>\n

Financial success comes from having a well-thought-out budget and plan in place. A good financial plan means you\u2019re looking at historical data\u2014analysing bookings from previous years, especially before COVID, to understand what your future income might look like. It’s about making sure you’re fully booked and managing any absences in a way that doesn’t negatively impact your income. For example, when a child is absent, their spot should automatically be offered to other parents, so that income isn\u2019t lost.<\/p>\n

Beyond bookings, success also comes from careful analysis of your spending. You need to make sure you\u2019re not overspending in key areas like food and wages, and that you\u2019re maximising the value of any resources you\u2019re paying for. If a centre is running efficiently and meeting its budget, that\u2019s a good sign that things are on track.<\/p>\n

Can you share any strategies that centres can use to improve their financial health?<\/strong><\/p>\n

The best strategy is to bring in professionals who understand financial planning. Last night, I attended an AGM where an early learning service was struggling because they didn\u2019t have a bookkeeper or proper budgeting in place. The director had no accounting skills, and as a result, the business was on the verge of failing. You need a team that knows how to do proper financial planning\u2014budgeting, forecasting, and analysing the data\u2014to make sure everything is running smoothly.<\/p>\n

I always tell my clients that your back office\u2014your bookkeeping and financial management\u2014needs to complement your front office, which is your staff and the care you provide. If the back office isn\u2019t working well, the whole operation will eventually fall apart.<\/p>\n

What\u2019s your take on the responsibility of directors and staff when it comes to financial planning?<\/strong><\/p>\n

It\u2019s incredibly important that directors and coordinators take responsibility for their centre\u2019s financial health. They need to be accountable for things like submitting receipts and making sure that expenses are properly tracked. Services, especially nonprofits, need to be transparent with their finances because they\u2019re using community money. Directors need to remember that they\u2019re the gatekeepers of the community\u2019s resources, and they must ensure that every dollar is spent wisely.<\/p>\n

However, I also want to point out that educators and directors often don\u2019t have training in financial management. When educators go through their training programs, they aren\u2019t taught how to read a balance sheet or a profit and loss statement, and that\u2019s a big gap in their knowledge. They\u2019re expected to run these centres, but they aren\u2019t given the financial tools they need. That\u2019s why it\u2019s so important to have a professional team handling the back office, so the educators can focus on what they do best\u2014caring for the children.<\/p>\n

Should financial awareness be the responsibility of everyone in ECEC?<\/strong><\/p>\n

Financial awareness should be the responsibility of several key roles in a centre, but primarily it falls on the owner or director. In privately-owned centres, the director is usually responsible for making sure the financial side is in order, and if they don\u2019t have the skills to do that, they need to bring in someone who does.<\/p>\n

In nonprofit organisations, the director typically works with the committee to ensure everything is running smoothly, but again, it\u2019s the director who sees the value of having someone handle the finances. They understand that the committee\u2019s role is to oversee things from a high level, while the day-to-day financial management is handled by professionals like us at CHAMP.<\/p>\n

It\u2019s really about having a collaborative approach where everyone knows their role and works together to ensure the financial health of the centre.<\/p>\n

We loved speaking to Jo. If you or someone you know has a story to share, we\u2019d love to have a discussion. Let us know via the website<\/a>,\u00a0Facebook<\/a>\u00a0or\u00a0LinkedIn<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

We had a virtual coffee recently with Jo Bromilow from […]<\/p>\n","protected":false},"author":12,"featured_media":8200,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[193],"tags":[230,61],"class_list":["post-8153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-virtual-coffee","tag-financial-planning","tag-jo-bromilow"],"yoast_head":"\nFinancial Planning in Early Learning: Virtual Coffee With Jo Bromilow - 1Place Childcare<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/1placechildcare.com\/au\/financial-planning-in-childcare-virtual-coffee-with-jo-bromilow\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Financial Planning in Early Learning: Virtual Coffee With Jo Bromilow - 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