professional childcare services

Understanding the Financial Key Performance Indicators

Childcare Business owners & managers know that income minus costs equal profit or financial key performance. This is a pretty simple view of procedures. Understanding what makes up the key performance indicators for financial growth will help a childcare business owner or manager recognise where he or she should concentrate efforts for improvement.

Revenues are the monies that the childcare centre takes in for the products & services that are offered. Once the revenues are gathered, then it is time to deduct the costs of the business & calculate the profit. Keeping good records helps with this step.

The cost is anything that the childcare centre pays out for operations. This includes employee wages, supplies, insurance, repairs, & advertising. Any debt paid by the business goes into the category of cost. After costs are calculated, deduct from the revenues & what is left is the profit for the business.

The financial key performance indicators tell the childcare centre how well it is performing & gives insight into where cuts can be made. Analysing all the costs is an important step that a childcare centre should use frequently. It can be broken down into weekly, monthly & yearly increments.

The more frequent the analysis, the better equipped the childcare centre is to spotting trouble areas & fixing the issues involved. Spotting repairable issues & areas where waste can be cut is vital to keeping a centre afloat. Paying attention to the financial key performance indicators helps a business stay viable & avoid going bankrupt.

Owning & operating a childcare centre involves vigilance & a desire to see the business succeed. Financial key performance indicators are part of the tools a childcare centre should use faithfully. When these tools are used correctly, childcare centre owners & managers are providing the business with a detailed blueprint for the success of the business.

An example of some KPI may be:

  • Average Daily Fee Per Place
  • Average Occupancy
  • Revenue per fee place ($)
  • Labour cost per licence place ($)
  • Labour as % of revenue (%)
  • Rent as % of revenue (%)
  • Direct Costs of proving services as a % of revenue
  • Other costs as a % of revenues

Early Learning Management has been providing professional childcare services for the last 28 years. We have the knowledge; expertise & experience to help you quickly implement value-add systems, allowing your business to achieve its goals & deliver a high level of service. Let us help you grow your business!


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