Savvy business owners know that maintaining a healthy cash flow is a sure strategy to outplaying and outlasting your competition. Cash in the bank is your secret weapon against your competition – and understanding cash flow is the ammunition that will help you to recognise and invest in wise business investments and prosper during challenging times. Here, our experts tell three practical tips to getting cash flow onto everyone’s agenda so that you can improve your cash flow position and get the edge over your competition. In this article, we reveal:
Why you need to be encouraging every employee to take an interest in cash flow – what’s in it for them and what’s in it for your business
How to unearth the untapped value of your childcare centre managers to improve your childcare centre’s cash flow
What your parent community can do to improve your cash flow and your quality standards.
Tip one: Encourage every employee to take an interest in cash flow
Our clients in the childcare industry tell us they are facing increased staffing costs as a result of increased staff ratio requirements in childcare centres. Whilst these increased staffing costs present an obvious challenge for childcare centre owners like yourself, it may not be as obvious to you that the staff who work in these centres are also facing increased competition for promotion and management opportunities as a result of a bottom-heavy workforce. That’s why they need to be constantly sharpening their skills, becoming better management candidates and showing an interest in management matters such as cash flow. You can take advantage of this opportunity by encouraging your staff to take an interest in key business performance indicators such as cash flow. Your best staff members should welcome the opportunity to be developed into more competitive candidates for future management positions.
Tip two: Share monthly cash flow reports with your childcare centre managers
If you give them the opportunity, you might be surprised to find your childcare centre managers jumping at the chance to learn more about key business indicators such as cash flow. After all, the people who manage the frontline of your childcare centre have a vested interest in the financial health of the business that keeps everyone in steady employment. This creates a unique opportunity for you to improve the way cash flows through your childcare centre by educating and including your centre managers in cash flow matters. Try sharing your monthly cash flow reports with your managers, explaining how the numbers in those reports affect the business and encouraging positive discussion around possible ways to improve those numbers. It’s possible that the most practical ideas around improving cash flow could come from the people standing at the coalface of your business – it’s up to you to develop their interest and unearth their knowledge.
Tip three: Influence your parent community to pay on time
Our childcare clients tell us that they spend way too much time chasing late payments from parents. With this in mind, anything you can do to help your staff avoid this administrative burden will allow them to spend more time doing what they love – spending time with the children. This is also a top priority for your parent community, so give your staff the information they need to be able to influence parents to pay on time. Help them to communicate the positive consequences that timely payments have on your staff ratios and quality care standards.
Get our expert cash flow guide for childcare centre owners
Discover how to get cash flow front and centre in your childcare business with our free cash flow playbook. In our free playbook, you will discover:What is cash flow and why should you care?
Why and how you need to create a monthly cash flow forecast
Ways to improve your cash flow
You can download your free cash flow playbook here.