Managing a private nursery is a demanding job - ensuring children are well cared for, staff are effectively managed, parents are listened to, maintenance issues are addressed and regulations are complied with, seems to be a long enough list of requirements before starting to think about making a profit! Everything on this list contributes in some way to the profitability of the setting.
This need to make a profit can feel like a black cloud casting its shadow over everything you do. An extra member of staff would free up so much time to ensure planning and observation were up to date, displays were regularly changed, or children could go on more outings, but you can only afford to staff to the minimum ratio requirements. You've read about a fantastic resource, but your washing machine has broken so your equipment budget needs to be spent on replacing that. You are recruiting a new member of staff and the ideal candidate is asking just 50p an hour more than your staffing budget can stretch to.
Many businesses are able to increase profitability by gaining greater market shares or modifying their product in some way. For most nurseries, expanding their business is difficult, as Ofsted prescribes the maximum number of children they can care for. This means the only way to increase income is to put up fees. Is it better to be 70 per cent occupancy with fees £5 less than your nearest competitor, or 50 per cent occupancy and £5 higher?
Many nursery managers are childcare practitioners first and business people second, and to them the whole process of managing a budget is a necessary evil that distracts them from their aim of providing quality childcare. However, any nursery that doesn't make a profit will not be sustainable. So financial issues have to be mastered. The skill of the successful manager is in achieving the right balance between profitability, quality and an enjoyable working environment.
Sarah Presswood is manager of George Perkins Day Nursery in Birmingham.
