If a childcare setting isn't financially sustainable, all the effort and money put into it goes to waste. This section looks at how to assess whether a setting is sustainable and can stay that way.
Assessing the Sustainability Position of a Setting - Where to Start!
Guidance for how the setting can be supported to work out their current sustainability position; what the impact of changes (e.g. to matters such as pay structure; expansion or contraction of place numbers; new projects etc.) would be, and how to ensure those future costs are sustainable to the setting. Significant emphasis upon the vital importance of them understanding the break-even position. Some preparatory work by the setting is required in estimating what all its costs will be, this should be set as a task before we engage them face-to-face.
Note: This approach is best practice and will give good results, but takes rather more time. If the setting is already on the brink of collapse, the 'funding gap' exercise will give a quicker 'feel' for the position, but it is too crude for proper forward planning.
Funding Gap Estimate
Objective is to establish an approximate idea of the gap between a setting's recent typical monthly income and typical monthly spending.
It's particularly valuable in 'urgent' situations where time doesn't permit detailed and refined calculations. But it's too crude for detailed financial planning and forecasting. Once estimated, the size of the 'funding gap' can be a useful guide to the kind and size of measures required to bridge it. There are two sheets, an example and a worksheet.