The financial element of a business plan is fundamental and the backbone of any plan. Projected financial statements will be included in this section, which represent what your business will look like in the future based on a set of assumptions. Financial Plans normally show the projected income and expenditure over a specified period 3 – 5 years.
In order to be successful in securing grants, funding or loans, the most important documentation will be your projected budget with its breakdown of estimated income and expenditure. It is also very important to write up a complete budget so that you can see what is required for your childcare service to be financially viable.
It is important to include a balance sheet when preparing your financial plan.
Fees must be high enough to ensure that the service is sustainable and at the same time affordable to the local community. Community Childcare Services may need to source additional grants, as often income from fees is not sufficient to cover all overheads. The following factors should be considered when deciding the cost of the service (fees):
The cost of overheads, such as staff, wages, premises, equipment and insurance.
Actual cost per childcare place. (Total cost of running the childcare facility divided by the number of children.)
Tiered Payment Structures
The purpose of a tiered payment system is to make childcare more accessible. The payment system aims to allow all families to avail of childcare in their community irrespective of their financial / personal circumstances. The fee structure will be influenced by the circumstances of the service and the financial capacity of the families who are availing of it. Contact DLRCCC for more information.
Expenditure might be broken down into the following headings:
Set up cost – fixtures and fittings, equipment, architectural design fees etc.
Salaries including Employers PRSI
Insurance – building, contents, employees
Premises – rent, rates, electricity, heating, phone
Furniture and equipment – from desks to soap
Administration costs – stationary, payroll software
Staff – uniforms, training
Marketing costs – signage, Golden Pages etc.
Consumables – stationery, arts and crafts materials, etc.
For further advice on how to produce a budget contact: Dún Laoghaire Rathdown County Childcare Committee Tel (01) 2368030 or Dún Laoghaire Rathdown County Enterprise Board, Tel: (01) 494 8400
When setting up a new business it is important to consider all the various finance options available to you. You can investigate the possibility of trying to secure a bank loan, which would involve preparing a thoroughly researched business plan with realistic facts and figures, to support your application. You could also explore the various government funding schemes that are available to the childcare sector.
Applying for a bank loan
If you want to investigate the possibility of developing your business via bank finance you will need to make sure that you are well prepared and have a thoroughly researched business plan with realistic facts and figures to persuade the relationship manager that you have targeted a viable market. You will also need to provide evidence that you have the ability to generate enough capital to pay back the loan. It works in your favour if you are willing to invest in the business yourself, as it shows the extent of your confidence in the venture
Funding Schemes from the Department of Children and Youth Affairs
The Early Childhood Care and Education Scheme (ECCE)
The Dept. of Children and Youth Affairs (DCYA) pays a capitation fee to participating early years services. In return, they provide a pre-school service free of charge to all children within the qualifying age range for a set number of hours over a set period of weeks. To attain this funding the DCYA set out criteria that must be met by the service.
For further information on the ECCE scheme click here.
The Universal Subsidy
This subsidy was introduced in 2017 to support parents of children ages 6 months to 3 years of age.
The subsidy is not means tested and is available to families with children in Tusla registered childcare (community or private services).
The weekly subsidy amount is based on the type of childcare you need.
Please see www.affordablechildcare.ie for more information.
The Childcare Education and Training Support Scheme (CETS)
The CETS scheme is aimed to support parents who are attending certain training courses. The funding subsidises the childcare cost so parents pay a lower fee.
For more information on this scheme, click here.
The Community Childcare Subvention Scheme (CCS)
The CCS Programme is a targeted to support parents on a low income to avail of reduced childcare costs at participating community childcare services. The DCYA pays for a portion of the childcare costs for eligible children, a payment described as a subvention payment, with the parent paying the remainder.
For more information click here.