7 Key Factors of Financial Success
Here are the revised remarks I made in my keynote presentation at the 14th Annual Child Care Business Expo in Chicago last Saturday. The conference was sponsored by the Women's Business Development Center.
We are in the midst of great financial stress - nationally, state-wide and within our families.
Family child care providers primary motivation is to care for children and you want to do the best possible job you can.
But, to do this work you need to make money to support yourself and your own family. They go together.
If you want to care for children, then you must also take care of business. If you don't care for business, in the long run, you won't be able to care for children.
Child Care Trends
There is growing competition among child care programs (homes, centers, preschool, license-exempt care, and illegal care) at the same time there is shrinking public support for child care from federal and state government.
Parents looking for child care have more choices than they have had in years. They are asking prospective caregivers, "Why should I enroll my child in your program? What does your program offer that others don't?" Your ability to answer these questions will largely determine how successful your business will be.
Seven Key Factors of Financial Success
Someone who:
1) Operates a high quality program
You will not be successful in the long run if your program isn't high quality. Parents will increasingly be looking for objective standards of quality. This means you should participate in your state's Quality Rating and Improvement Systems and work towards NAFCC accreditation.
2) Seeks out other child care providers for support
You can learn a lot from other successful colleagues. Ask them what they did that helped them succeed financially and what didn't work. Join your local, state and national family child care association.
3) Is intentional about planning ahead and setting goals
It's important to set both short and long terms financial goals for your business and family. When you do this you will be much more likely to meet your goals.
Short-term goals (1-5 years) can be setting up a three-month emergency fund, paying off credit card debt, establishing a car replacement fund and purchasing business liability insurance.
Long-term goals can be saving 10% of your profit towards your retirement, purchasing disability income insurance or long-term care insurance.
4) Evaluates what does and doesn't work and learns from mistakes
Don't be afraid to make mistakes as you try to improve your business. If you haven't failed at something recently, you probably aren't trying hard enough. Conduct annual parent evaluations and look for ways to continually improve your program. Review your progress towards your short and long terms goals each year and make adjustments.
Don't give up on yourself. If you can't make a financial success at child care, don't despair. It may be necessary to move on to another career and seek success elsewhere.
5) Stays up-to-date
Parents are increasingly using the Internet to find child care. Will they be able to find your program? Are you taking advantage of Facebook, Craigslist, Pinterest, Google Alert, child care forums, online classified ads and YouTube? You should consider all of these tools and more in your outreach to prospective parents.
6) Matches their rates with their quality
Unfortunately, parents often do not recognize high quality child care and child care providers often do not do a good job explaining the benefits of their program. This has created a situation where there is not a correlation between high quality care and the cost of care. In other words, the highest quality child care providers are not charging the highest rates. This contributes to the difficulty parents have in finding high quality care since consumers associate higher quality with higher cost.
Are you an “average” child care provider? If not, your rates should not be average. Your rates are probably about right when you occasionally lose a parent who can’t afford your services.
Not all child care providers are seeking to maximize their income. Many care for low-income parents and choose not to charge higher rates because they want to help these families out.
7) Joins with others to increase public support for working families and child care providers
If where we spend our public money is a sign of what’s important to us as a society, then the value we place on young children is extremely low. Compared to the rest of the developed world, the United States is way behind in helping women stay home and care for children and in funding a child care system that supports child care workers fairly.
Most parents could not afford to pay the cost of child care if child care providers were earned a livable wage. While our society heavily subsidizes higher education through government and private corporations and foundations, the costs of early childhood education are paid primarily by parents.
I recommend that child care providers join with other individuals and organizations that are working to increase public support for child care. This includes unions, and child care support organizations. Become politically active by supporting candidates for public office that will support young children and those who care for them. It’s only by increasing public funding that child care workers will get paid what they deserve.
Conclusion
Financial success is a relative term. You will always be making more than some and less than others. But it’s not all about money. We should not ignore the important non-financial reasons that also motivate family child care providers.
I appreciate what you do to care for children in the face of tremendous financial challenges.
Tom Copeland - www.tomcopelandblog.comImage credit: http://www.wbdc.org/
