earlyyears.teachwire.net
11
nursery business
If your nursery doesn’t
make any money,
it won’t be providing
an outstanding
service, says
Chris Townson
...
D
are I mention the ‘p’ word?
Sometimes it seems as
though the nursery sector is
ashamed of making money
– that it feels the right
approach is to focus on the children and
the children alone, while the finances
take care of themselves. But thinking
about profit isn’t mercenary; it’s vital
for any business, and a nursery is
no exception. Ultimately, if your
nursery doesn’t make money, it
doesn’t operate; if it doesn’t operate,
it can’t provide outstanding
childcare, and when that happens,
parents and families are the ones
who lose out.
I am a director at Toybox Nursery
(toyboxdenham.co.uk), a successful
early years business. Since I joined the
sector in 2005, my wife, Jackie, and I
have built up and sold three thriving
settings, and opened a fourth, judged
‘outstanding’ by Ofsted. Within 18
months of us opening the doors of this
latest setting, the business was making a
monthly profit and starting to repay the
set-up costs and support the massive
investment in quality we had made.
And investment is the key. We at
Toybox are passionate about the nursery
sector; we challenge convention at every
turn to ensure our families have the
chance to receive outstanding care and
education. We aren’t money-grabbing
entrepreneurs focused on the bottom line
for self-gain, but we are focused on
making a profit to improve what we do.
For us, high quality and profitability
are inextricably linked. Allow me to
explain: we invest in our building and
facilities; we invest in outstanding staff,
rewarding those who excel through a
system of performance-related pay; we
invest in our processes and procedures.
All of these things cost us money. But
our investment creates and sustains
quality, and this leads to outstanding
outcomes – when you have outstanding
outcomes, you will have happy parents,
willing to pay a little more for your
services, and that leads to profit, our
means to keep investing.
Unlike us, I sense that many nursery
owners in this country are frightened to
talk about profit for fear of being labelled
greedy. Perhaps that shouldn’t come as
a surprise – the national press
constantly runs stories about the
rising cost of childcare. There is an
implication – at best unchallenged
by government – that all nurseries
make thousands of pounds in profit,
and it is their owners who make
childcare expensive. They fail to
mention that nearly half of all nurseries
(49%) will make a loss, or breakeven at
best, this year.
My belief is that the government sees
that we are frightened to use the ‘p word’,
and uses this fear to under-invest in
childcare. It knowingly short-changes the
sector because it believes nurseries will
always strive to absorb their costs, while
working for the best outcomes for
children they can achieve. If that is true,
it’s time to rethink our attitude to profit,
for the sector to demand better funding,
so we can all operate at a better level.
Why not take the view that to be
truly outstanding in every area, a
nursery should have to be able to
show significant profitability? In my
opinion, if you can’t do that, you will
not be providing outstanding outcomes
for long...
Chris Townson is a Director at
Toybox Nursery and provides a
sales consultancy service for the
sector. Turn to page 49 to read his
advice on setting your fees at the
right level.
THE TOYBOX VIEW
ON PROFIT
D
Accept your business
must make a profit.
D
Be proud that you are
successful, as ultimately
that is good for children
and families.
D
Have a clear, positive
strategy to turn your
budgets into reality.
ON INVESTMENT
D
Ignore the factors you can’t
control (e.g. government).
D
Remember, the bigger
the investment, the bigger
the return.
D
Don’t asset-strip to make quick
money – have a long-term plan.
D
Pay your staff to be outstanding
– don’t reward mediocrity.
ON FEES
D
Charge parents according to your success
– let the market economy dictate your fees.
D
Make sure at all times that the value/
outcome you deliver outweighs the fees
you charge. Remember, if your value/
outcome is zero, your fees will be less
than zero!
D
Listen to parents – they will be proud to
send their children to a successful setting.
“PROFIT
IS NOT
A DIRTY
WORD”
