It’s important to start planning for future growth, even if you’re still determining if you want to go from a home daycare to a center. One of the most important things to consider is the benefits of financial planning and understanding why it’s necessary. Financial planning is the roadmap to achieving your business goals in the short and long term. Benefits of financial planning include:
Clear Goals
When planning for future growth, you first want to set clear goals with cost in mind. These goals should include where you want your business to be in the next year (short-term) or where you want your business to be in the next five years (long-term). When setting these goals, make sure they are realistic and can be achieved. For example, I want to increase enrollment within the next year and transition from a home daycare to a center within the next five years.
Cash Flow Management
The next thing you want to do is manage the money coming in and going out of the business. The easiest way to do this is to have separate banking accounts for personal and business use. The business banking account should be used for business purposes only. The goal is to consistently have a positive cash flow to invest in future growth opportunities. It would be best to determine the cash flow your business needs to have a positive cash flow.
Budget Allocation
After you determine your business cash flow needs, allocate a budget. The best way to do this is to use accounting software to help you monitor spending and understand where your business is financially. You should know how much money is spent on business expenses such as payroll, utilities, marketing, etc. The goal is to keep costs low by taking some time every month or quarter to determine if costs can be reduced.
Growth Roadmap
The last thing you want to do is make a diagram of a growth roadmap. A growth roadmap enables you to plan for future growth by clarifying your business goals and task. The roadmap should include detailed activities such as goals, cost, and what tasks must be completed each week or month to achieve your goals. There are many forms of a growth roadmap. Below you can find an example of a roadmap, but the roadmap you create should be more detailed, with dates and multiple tasks for each goal.
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