Cashflow Production and Analysis

This page will give you guidance around the information required to produce an accurate cashflow projection

It is absolutely key to your business success to calculate/estimate your costs before working out your fee structure. Many childcare providers fail to do this and find themselves in the unenviable position of discovering that their costs are not being covered by their fee income. To avoid this situation, ensure you consider all potential costs. These should include the following costs:

  • Staffing Costs - These can amount to up to 70% of your total expenditure and are influenced by legislation, around staff ratios as well as the qualifications needed. Don't forget to include National Insurance Contributions, Pension Contributions, Sick Pay and Holiday Pay
  • Premises - Rent/Mortgage, Business Rates, Utility Charges, Buildings Insurance, Building Maintenance
  • Insurance - Contents, Public Liability, Employers Liability, Motor Insurance etc
  • Administration - Stationery, Bookkeeping, Administration help
  • Materials - Toys, Consumables, and other entertainment costs
  • Telephone - Mobile Telephone, Landline Telephone, Internet Costs
  • Food - This cost will be completely variable and depends on the number of children attending, as well as the type of food offered
  • Membership/Subscriptions - Membership of agencies such as PLA and any subscriptions to magazines etc
  • Professional Fees - Ofsted Registration, Legal Fees and Accountants Fees
  • Marketing - Advertising, Design, Brochure/leaflet printing costs, etc
  • Transport - Vehicle maintenance, Tax, MOT and other travel costs
  • Training - Costs associated with staff training
  • Capital Costs - Equipment and premises and the refurbishment thereof

A Business Support Advisor will put the above information into a spreadsheet which will produce a cash flow for up to a 3 year period. Included within this cash flow will be occupancy and relevant fee information. This will be used to identify relevant operating surplus/deficit.

The Business Support Officer can also prepare a breakeven analysis based on either session fee, or session occupancy.

Useful downloads

Cashflow Template

A sample cashflow template for childcare providers