A nursery requires good administration and efficient information systems to function well.
The ‘what gets measured, gets done’ approach gives managers the opportunity to identify the most important information and to assess weaknesses and strengths…
Build a Management Information System
There are four key elements to this:
- Define the critical information needed for your business to succeed.
- Collect this data regularly.
- Analyse your processes to ensure that the business is operating
effectively to the highest standards.
- Take Action when things are not progressing satisfactorily.
Identify what needs to be monitored
There are a number of key areas where regular information is vital:
- Occupancy. Managing occupancy is essential, as the fee income is the lifeblood of your nursery; if there are not enough children attending then the fees will be insufficient to sustain the costs. Monitor the usage patterns.
- Cash flow. Managing cash flow is the cornerstone of financial management. However successful your nursery may be, it will fail if there is insufficient income to pay wages and outgoing bills. Forecasting the income and expenditure over a period of time will identify likely shortfalls. Make sure your fee income and any other external payments are collected on time.
- Payment of bills. Apart from wages, every nursery will have a range of suppliers who will need to be paid. The rent, council tax and insurance need to be handled promptly, along with key supply items such as energy, telephony and consumables, including food.
- Keep up the momentum. Building a budget and monitoring it frequently is the underlying tool for a successful nursery. It is an ongoing process – continue to review actual income and expenditure against the original budget, and roll this forward for the next 12 months. Plan any large items such as equipment and building facilities. Nominate a senior member of staff to keep an eye on the budget, review all suppliers’ costs and identify potential savings.
The article “What gets measured gets done!” was first published in Teach Nursery Magazine.