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Creating Exceptional Childcare Facilities for Every Precious Child
In the world of childcare, creating exceptional facilities is essential for providing the best care and early childhood education for our little ones. That’s exactly……
Your Questions: What Financial Reports Should My Accountant Provide?
At a minimum, you should receive monthly (not quarterly) financial reports – Profit and Loss Statement and Balance Sheet. These reports should be timely –……
Creating a Financially Healthy Child Care Business
Childcare businesses, just like people, can be described as either healthy, a little sick, anemic, or gravely ill. When sick, humans often need a consultation……
How Can I Increase the Value of My Child Care Business in 2023?
If you want to increase the value of your childcare business, the more you get these things right, the more your childcare business is worth.……
Common Mistakes Child Care Business Buyers Make
In my 28 years of working in childcare business mergers and acquisitions, I have met and worked with thousands of childcare business buyers. From the……
10 Steps to Prepare Your Child Care Business for Sale
Whether you plan to sell your childcare business soon or years from now, it is essential to ensure you prepare your business for sale. These……
Maximizing Child Care Business Profits & Value
All childcare business owners should aim to increase profits and business value. Your childcare business is likely your largest investment and a substantial portion of……
How Much Is My Child Care Land and Building Worth?
This is the question that child care owners asked just after, “What is my child care business worth?” Commonly, the real estate – land and……
Stabilization Grant Funds and Business Value
One of the most frequent questions I have been asked over the last two years is – “How do buyers look at grant funds and……
The Juggle is Real…
The childcare business is like no other; you are responsible for the world’s most precious commodity. It is far different than any other career field;……
Why Child Care Business Buyers Buy – What They Will Pay For
In the training workshops I conduct and my meetings with childcare owners, I find them confused about why childcare business buyers buy and what the……
Recession Proofing Your Childcare Business
No childcare business owner wants to consider or discuss the likelihood of a recession. However, good and bad economic times are part of normal economic……
Back on Track – Financial Management Without STABILIZATION Grants
Although intended to stabilize the childcare industry and individual childcare businesses, in my opinion, the funding only served to “prop up” the industry. The childcare……
Selling a Childcare Business – Owner Financing vs. Earn Outs
In recent years I have received an increasing number of calls (more than in years past) from childcare business owners about selling their childcare business……
Do You Want to Sell Your Child Care Business?
The Endless Child Care Buyer Calls, Emails, and Letters How many calls, emails, and letters have you received this week from people interested in buying……
2023 Planning For a Year of Success
For many childcare owners, 2022 has been another year of high stress, labor shortages, and frustration. How will 2023 be different? In most states, childcare……
Fair Market Rent – How it Affects the Value of Your Child Care Business
Every child care business operates in a facility – building and land. Some child care owners lease the building and land from a third-party owner.……
Exit Strategy Planning For Child Care Business Owners
Did you know surveys indicate that three out of four (75%) business owners regretted the decision to sell their business? Unfortunately, the statistic is true.……
Value Gap: How It Prevents Many Child Care Owners From Exiting Their Business
Although there are many things that can prevent or delay a child care owner from exiting their business, the number one reason is Value Gap.……
Child Care Tuition Collection
Tuition Collection The collection of tuition fees is a constant challenge for most child care centers. However, the consistent, timely collection of tuition fees is……
Starting a New Child Care Business
If you desire is to own a child care center, you basically have three options to accomplish this goal: buy an existing center, convert a……
You Have a Claim – Now What
All child care owners hope they will never have an incident in their child care business that would result in an insurance claim…
10 Reasons Why Your Child Care Business Needs a Website
The saying goes, “If you are in business, your business needs a website.” And a child care business is no different. Not so many years……
Growth in U. S. Child Care Businesses
The financial performance of child care businesses is often “assumed-to-be” far less than businesses in other categories. Although operating a child care business does have……
Child Care Tuition Collection
Collecting tuition is probably one of the hardest things for childcare Owners and Directors to do. Speaking to parents about their payments is not the……
Out of Pocket Cash Purchases
Jonathan Lamb, our child care financing expert, shares some ideas about when you should pay for things with cash…
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- Abutting Property Owner Your neighbor who shared your lot line. Their property edge touches your property edge.
- Accounts PayableAccounts Payable is the account that tracks (lists with amounts) that your child care business owes to suppliers, vendors, and others that provide goods and services to your business.
Accounts Payable DaysA measure of how long it takes for the business to pay its creditors. A stable higher number of days is generally an indicator of good cash management. A longer time taken to pay creditors has a positive impact on Cash Flow. But an excessive(…) Read More- Accounts ReceivableAn account that lists or tracks (with amounts) people that owe your child care business money. This most often will be parents that owe tuition payments. TIP: Accounts Receivables – overdue parent tuition payments can lead to financial(…) Read More
- Accounts Receivable DaysA measure of how long it takes for the business to collect the amounts due from customers. A lower number indicates that it takes the business fewer days to collect its accounts receivable. A shorter time to collect funds due has a positive(…) Read More
- Activity RatioA measure of the efficiency or effectiveness with which the business manages its resources or assets. This measure indicates the speed with which Net Operating Assets (Equity + Debt) are converted or turned into sales. This can be improved by(…) Read More
- Add An increase in the scope of work and or cost.
- Additional Insured Covered by another party’s insurance policy.
- Aggregate Gravel or crushed stone added to the concrete mix.
- AIA American Institute of Architects.
- Air Exchange The exchange, switching out, of interior air for fresh exterior air. Think “out with the old, in with the new.”
- Allowance The amount of money set aside for the purchase of yet-to-be specified materials.
- Alternate Price The pre-agreed to price for altering a task or material in the scope of work.
- As-Builts Plans to reflect the work executed to construct a building and all of its systems. Field changes sometimes occur that can be significantly different than the original design, an as-built records the changes and documents what was actually built.
- Asset Based ApproachA general way of determining a value indication of a business’s assets and/or equity using one or more methods based directly on the value of the assets of the company less liabilities. (International Glossary of Business Valuation Terms)
- Asset TurnoverA measure of how effectively the business has used its assets to generate revenue. The business makes $1,558 of sales for every $100 of its asset investment. The higher the number the better the turnover. Ways to improve this metric include(…) Read More
- Awning Window A single sash window hinged at the top. Usually seen in basements.
- Back Order A delay in shipment of a product from the manufacturer.
- Backfill To place and compress soil around a foundation or within an open excavation hole on site.
- Balusters Vertical supports under a handrail to make a railing system.
- Base Bid A cost proposed based on the scope of work that is fully determined.
- Bearing Wall A wall that supports the weight of a portion of the building.
- Berm A raised shoulder of earth, a small pile of dirt.
- Bid Package A package of information necessary for a contractor to produce a bid, includes building plans, specifications, and information about known pre-existing conditions on the site.
- Bidding Requesting proposed prices from more than one contractor.
- Board Foot One square foot of lumber an inch thick. That is a 2×4 that is 8′ long has 5.3 board feet. Multiply the height in inches times the width in inches times the length in feet and divide by 12.
- Bow Window A window system that protrudes from the plane of the wall in which it is installed. Similar to a Bay Window, but curved in shapes like the bow of a bow and arrow.
- Box Valance A three-sided window treatment spanning the top of a window.
- Breakeven Margin of SafetyThe breakeven safety margin represents the gap between the actual revenue level and the breakeven point. In other words, the amount by which revenue can drop before losses begins to be incurred. The higher the margin of safety, the lower the(…) Read More
- Building Inspector City, County, or State employee who reviews, and approves plans and construction work for compliance with building codes.
- Building Permit A written consent for permission to construct work by approved plans.
- Built Materials Materials installed, applied, or assembled in or on a structure.
- Bulkhead A framed out lower portion of the ceiling, typically used to conceal something like piping or to give a sense of separation between rooms.
- Butt Joint A connection made from square end to square end.
- Buy Out To purchase the bulk of materials needed for a portion of a project.
- Carbon Footprint The amount of impact on the environment. A large carbon footprint is bad for the environment, a small carbon footprint is a good thing.
- Carry To include or account for something.
- Casement Window A window with a rotating crank-out movement.
- Cash Conversion CycleA measure of the length of time between the purchase of raw materials and the collection of accounts receivable from customers. The Cash Conversion Cycle measures the time between outlay of cash and cash recovery. A shorter cycle minimizes the(…) Read More
- Cash Flow CoverageA measure of the ability to service interest payments from operating cash flows. A lower result may indicate that the cash flow generated from the company’s operations will be insufficient to cover interest payments. For this period, the cash(…) Read More
- Cash on HandA measure of the cash and cash equivalents in actual possession by the company at a particular time. At the end of this period, the child care business held $21,098 of cash and cash equivalents. Cash on Hand is above the required target of(…) Read More
- Cash RatioThe Cash Ratio measures the availability of cash and cash equivalents there are to cover current liabilities. Few businesses have sufficient cash and cash equivalents to fully cover current liabilities. Accordingly, a cash ratio of less than 1(…) Read More
- Cash to Current Assets RatioCash to current assets is a liquidity ratio. Liquidity ratios measure a company’s ability to meet financial obligations when due. In the short-term can the company pay all bills when due? Cash to current assets is a liquidity ratio that(…) Read More
- Certificate of Completion A letter from the bank appraiser, usually the Architect of Record, to the lending bank, certifying that the project was completed in accordance with the plans and specifications.
- A document certifying that a contractor is insured.
- Certificate of Occupancy Written permission from the building inspector that a building can be occupied.
- Chamfer A 45-degree cut into a 90-degree outside corner. Picture frames have chamfer corners.
- Change Order An alteration to the terms of a construction contract, resulting in cost and scheduling changes.
- Charge Order Proposal A written proposal for cost and time changes to the contract.
- Clean-out An opening in a drain pipe used for cleaning or un-clogging it.
- Conditional Use Permission to use land or building space under certain stated conditions, in a way other than ordinarily permitted by zoning regulations.
- Conduit Hollow tubing used to contain and protect lengths of electrical wire or plumbing pipe.
- Construction Documents Permit approved plans, specifications, and building contract used for the construction of a project.
- Construction Management The management of a construction project.
- Construction Schedule A timed plan for the building construction of a project.
- Contingency Money set aside to cover the cost of unexpected expenses.
- Contract Structures Various approaches to the construction contract between the Owner and Contractor. Examples include Lump Sum, Cost Plus, and Time and Materials.
- Cost Estimate An approximation of the expenses associated with tasks or materials.
- Crew A group of workers.
- Culvert A concrete pipe that passes underground to direct and drain water.
- Current RatioA measure of liquidity. This measure compares the totals of the current assets and current liabilities. The higher the current ratio, the greater the ‘cushion’ between current obligations and the business’s ability to pay them. Generally, a(…) Read More
Customer Lifetime ValueYour investment to acquire a new enrollment, like any investment, should be less than the value the enrollment will return to your child care business. The Customer Lifetime Value or Lifetime Value is one of the most important Key Performance(…) Read More- Cut Sheet A written, diagram, or photo representation of a product.
- Debt to Total AssetsA measure of the proportion of the business’s assets that are financed through debt.
Earn-Out
A provision that is part of the written agreement between the child care business seller and buyer where the seller of a business will receive additional payments based on the future performance of the business sold.
- EBIT GrowthA measure of the percentage change in EBIT for the period. A combination of growth in revenues and growth in profits presents a balanced measure of growth For this period, EBIT growth of -192.07% was less than the target of 0.17%.
- Economic ProfitThis measure is underpinned by the concept that a business only adds value for its shareholders if it makes a profit in excess of its cost of capital. Economic profit is calculated as the amount by which profits exceed or fall short of the(…) Read More
- Equity to AssetsA measure of the proportion of the business’s assets that are financed by shareholder’s equity.
- Expense ChangeA measure of the percentage change in total expenses for the period. While growing revenues, management need to monitor expenses. A significant increase in expenses may indicate the eroding of margins and should prompt action. For this period,(…) Read More
- Expense-to-Revenue RatioA measure of how efficiently the business is conducting its operations. While growing revenues, management needs to monitor the change in expenses. A significant rise in the expense-to-revenue ratio may indicate the eroding of margins and(…) Read More
- Fixed Asset TurnoverA measure of how effectively the business has used its fixed assets to generate revenue. The business makes $2,444 of sales for every $100 of gross fixed assets. Ways to improve this metric include using fixed assets more efficiently and/or(…) Read More
- Free Cash FlowFree cash flow is the cash generated by the business, after paying its expenses and investing for future growth. It is the cash left after subtracting capital expenditure from operating cash flow. The term “free cash flow” is used because this(…) Read More
- Gross Profit GrowthA measure of the percentage change in gross profit for the period. For this period, gross profit growth of -18.54% was substantially less than the target of 0.17%.
- Gross Profit MarginA measure of the proportion of revenue that is left after deducting all costs directly related to the sales. For each $100 in sales, the business retains $83.96 after deducting the cost of sales. The gross profit serves as the source for paying(…) Read More
- Income ApproachA general way of determining a value indication of a business’s assets and/or equity using one or more methods wherein a value is determined by converting anticipated benefits. The various methods of valuation that appraisers use in practice(…) Read More
- Interest CoverA measure of the ability to service its interest payments from the profits earned by the business. A result of more than 2 is generally considered to be safe, but businesses with volatile earnings may require a higher level of cover. A lower(…) Read More
- Inventory DaysA measure of how efficiently the business converts inventory into sales. A lower number of days is generally an indicator of good inventory management. A shorter time of holding inventory has a positive impact on cash flow. But a low result can(…) Read More
- Market ApproachA general way of determining a value indication of a business’s assets and/or equity using one or more methods that compares the subject to similar investments that have been sold. The various methods of valuation that appraisers use in(…) Read More
- Net Cash FlowNet cash flow is the cash flow remaining after operating, investing, and financing activities. Financing activities may include cash outflows such as interest payments to lenders or dividend payments to shareholders
- Net Profit After Tax MarginA measure of the proportion of revenue that is left after all expenses have been paid. The business makes ($23.07) of net profit for every $100 it generates in revenue. For this period, the Net Profit After Tax margin is below the required(…) Read More
- Net Variable Cash FlowA measure of the additional cash that will either be generated or used up by the next $100 of products or services that the business sells. If the Net Variable Cash Flow is positive then for every additional $100 of revenue the business will(…) Read More
- Operating Cash FlowOperating cash flow is simply the cash generated by the operating activities of the child care business. Operating activities include the production, sales, and delivery of the company’s product and/or services as well as collecting payment(…) Read More
- Operating Cash Flow to Current LiabilitiesOperating Cash Flow to Current Liabilities is a measure of how well current liabilities are covered by the cash flow generated from operational activities. This metric provides a useful indicator of a business’s liquidity in the short-term.(…) Read More
- Profitability RatioA measure of the proportion of revenue that is left after deducting all expenses. This excludes finance costs and tax expenses. The business makes ($8.04) of EBIT for every $100 it generates of revenue. The profitability ratio can be further(…) Read More
- Quick RatioThe Quick Ratio measures the availability of assets that can quickly be converted into cash to cover current liabilities. Inventory and other less liquid current assets are excluded from this calculation. The Quick Ratio is a measure of the(…) Read More
- Return of Capital EmployedA measure of the efficiency and profitability of capital investment (ie. funds provided by shareholders & lenders). Return on Capital Employed monitors the relationship between the capital (‘inputs’) used by the business and the earnings(…) Read More
- Revenue GrowthA measure of the percentage change in revenue for the period. Management should ensure that revenues increase at rates higher than general economic growth rates (ie. inflation). For this period, revenue growth of -17.89% was below the target(…) Read More
- Seller Financing
Seller financing is a loan provided by the child care business owner to the buyer of their child care business.
- Total RevenueA measure of the total amount of money received by a child care business for child care services provided. In the example below, the business has earned a total revenue of $108,585. Strategies to improve revenue may include increasing prices,(…) Read More
- Working Capital AbsorptionA measure of the adequacy of working capital to support sales activity. This measure indicates the investment made in working capital for each unit of revenue. The trend of this ratio is particularly useful for growing businesses. If sales(…) Read More
FY24 Wrap-Up… And on to FY25: Child Care Funding News
On March 23, 2024, Congress approved a FY24 appropriations package, ending a particularly long and turbulent federal funding cycle.
Child Care Aware® of America (CCAoA) applauds this hard-fought bipartisan deal aimed at protecting and prioritizing child care funding for families, children and communities across the country. This package builds on recent…
As nearly a third of NC child care providers expect to close within months, lawmakers hear a plea: ‘We need help’
Members of the Joint Legislative Oversight Committee on Health and Human Services received an update on child care at their meeting April 2. The biggest……
TREND REPORT 2024: ACH Tops How Families Pay Child Care Tuition
The 2024 Child Care Management Software Industry Trends Report from Procare Solutions found that ACH payments, which are electronic fund transfers typically used for recurring……
What does Smart Start do? An updated catalog shows best practices across the network
Smart Start, a network of 75 local organizations focused on supporting young children and families across North Carolina, has become a model for other states……
National CACFP Week: Raising Awareness of Nutrition in Your Child Care Program
On March 10-16, we will celebrate National CACFP Week!
Why?
The U.S. Department of Agriculture’s Child and Adult Care Food Program (CACFP) is an essential federal program that addresses hunger and builds healthy eating habits by providing reimbursement for nutritious foods to children enrolled for care at eligible child care programs, including child…
Can AI Aid the Early Education Workforce?
Since ChatGPT was released in November 2022 and exploded into public discourse, the emergence of generative AI tools has been met with both excitement and……
Child Care Data Security: How Procare Protects Families and Your Business
With sensitive financial and personal information about children, families and your business at stake, your child care management software must include robust data security measures.……
2024 Child Care Management Software Industry Trends
Watch this on-demand webinar to join Procare Solutions Chief Marketing Officer Maia Tihista with distinguished thought leaders in the child care management industry: Kathy Ligon,……
End the Headache of Late Child Care Tuition Payments
This blog was originally published in 2018 and was updated with new information on Oct. 12, 2024. As a child care business owner, your focus……
Beyond the Map: How States Are Using Story Maps to Strengthen CACFP
Since 2019, Child Care Aware® of America (CCAoA) has partnered with Nemours Children’s Health to create geographic information system (GIS) technology story maps to visualize and better understand child care program participation in the Child and Adult Care Food Program (CACFP). Story maps combine both maps and text to help…
Download “Child Care Data Security: How Procare Protects Families and Your Business” Guide
Your download is ready. Click the button below to download your guide. Download Now Ready to save time by automating processes like tuition collection at……
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Tuition Rates – Calculating For Profit
When I ask child care owners “how they established their tuition rates for each age group.” A common response is, “we based our tuition rates on what other child care centers in the area charge.” Taking into consideration the average tuition rate in the market area is important. However, the calculation of…
The Importance of Financial Management
The Importance of Financial Management…
SMART Goals
The first step to achievement is setting a goal. Goals are great – SMART Goals are the best. SMART goals help you to clarify your……
Recession Proofing Your Child Care Business
No child care business owner wants to consider or discuss the likelihood of a recession. However, good and bad economic times are part of normal economic cycles. Not counting the steep but very brief economic downturn during the COVID pandemic, the last recession in the U.S. was from December 2007 to June…
QuickBooks Online Video Tutorials
Learn how to set up your small business for success with these QuickBooks tutorials: Create custom invoices, track expenses, and view statements and performance reports anytime, anywhere. Get started with QuickBooks Online and find out how our key features can be tailored to meet the needs of your small or medium business…
Profit and Loss Statement
Child Care Financial Management – Profit and Loss Statement – Workbook…
How to Increase the Value of Your Child Care Business
Most business owners have a large portion of their net worth tied up in their business. The same is true for the owners of child care businesses. It is estimated that their business represents 50% to 80% of their net worth. Child Care owners are often planning to fund a substantial portion…
How to Improve Business Cash Flow
How to Improve Business Cash Flow – Workbook…
Your Personal Financial Picture and Loan Repayment
Jonathan Lamb, our expert child care banker details how important your personal financial picture is…
Why Do You Need a Loan?
So, you are thinking about applying for a loan. The first place to start is…
What to Expect When Your Are Expecting to Get An SBA Loan
Jonathan Lamb, our expert child care banker, shares some sage advice on “What to Expect…
What is the SBA
In this video, Jonathan Lamb, our expert child care banker explains what the SBA…
USDA Business Loans
Menu Dashboard Calendar Cubby Cast Forums Library Q & A Calls Quick Wins Resources Roadmaps…
Taking on Debt
Our child care expert banker, Jonathan Lamb, provides informative things you should consider before taking…
Renegotiate Lease or Loan
Menu Dashboard Articles Calendar Forums Library Q & A Calls Quick Wins Resources Roadmaps LOG…
RE Sale Lease Back – Refinance
Child care business owners often have a substantial portion of their net worth and available…
Playground Safety – Quick Win
In this Quick Win, Donna Marcus, our child care insurance expert, shares some great tips…
Personal Guarantee and Collateral
In order to make a loan, the borrower must provide a personal guarantee and collateral…
Out of Pocket Cash Purchases
Jonathan Lamb, our child care financing expert, shares some ideas about when you should pay…
Leasing
Jonathan Lamb, our expert child care banker discusses how child care business owners can use…
Lease or Buy Big Ticket Items
Menu Dashboard Articles Calendar Forums Library Q & A Calls Quick Wins Resources Roadmaps LOG…
Involuntary Exit – 5 D’s
Menu Dashboard Articles Calendar Forums Library Q & A Calls Quick Wins Resources Roadmaps LOG…
Financial Benchmarking
Menu Dashboard Calendar Cubby Cast Forums Library Q & A Calls Quick Wins Resources Roadmaps…
Construction Costs & Insurance
Menu Dashboard Articles Calendar Forums Library Q & A Calls Quick Wins Resources Roadmaps LOG…
Acquisitions and Financing
Back with us again is our expert child care banker – Jonathan Lamb. In this…
How Much is it Going to Cost?
The first question everyone has when they start planning a new childcare building or remodeling project is, “How much is it going to cost?”.
We go into detail in each video with an explanation because that is a very difficult question to answer. Even for people in the real estate and…
Build It Better, Sell It For More (Release Spring 2024)
Build It Better, Sell It For More™ is “A Child Care Owner’s Guide to Building a Profitable Business, Maximizing Value and Exiting Strategy Planning”. The book and companion course written by Donna S. Dailey will be released in spring 2022. ChildCareOwner.com members will receive a FREE advance, autographed copy of…
Exit Planning For Child Care Business Owners Roadmap
COVID-19 has disturbed many things in the Child Care Industry. As child care owners begin to recover from being closed and lower enrollments, many are starting to refocus on the future. Before COVID-19, many child care owners had their Exit Strategy in place and looked forward to the day they…