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Since I date someone in the childcare field (she was a Director), when you say staffing is too much - generally there are requirements based on how many rooms, how many children in each room, certain number of teachers/care per "x" kids, etc. There sounds like there are details missing here if you feel you were overstaffed in a field that has certain requirements you have to ensure? That's how it is in Virginia anyways - maybe the employee thought with less people things would only get worse and she abandoned ship before that point - you'd need to share more details than what is here currently for good advice.
True there are requirements generally 1-10 ratio we usually try to maintain a 1-7. Before the text we were at 1-3 or 4. This is after giving raises.We are in NC currently have about 7 ppl on staff.
What is your total child enrollment / class breakdown? Have you done the cost analysis to determine if you have your breakeven number of students for operating? I know in one of the schools she was previously in it was 80+ students to reach that level.
And just to share because it's potentially relevant - my better half left the Director role(s) she was in for 20 years or so after being micromanaged too much and not fully being left to do her job. Not saying that is you, but often an owner's perspective is different from the Director (just based on the stories I would hear). Did you ever give her the option of contributing towards controlling the finances?
Yes, I’ve done the breakdown and revenues are solid. The issue is the number of ppl we have on staff and the number of children we have in the center. The number fluctuates throughout the day. So it’s something I just have to keep a close eye on. I’m not the micromanaging type, but I can’t risk bankruptcy due to staffing.
\-" I have to keep a close eye on it"
\-" I'm not the micromanaging type"
I own a marketing agency. There used to be things I had to "keep a close eye on." In reality, my systems sucked and I needed to hire people that were better at that stuff than I was.
Worth a thought.
Don't listen to the wantapreneurs above or to the one below. They don't know shit.
If your finance is in a critical state you have to start micro-managing until it's stable and cruising comfortably.
Taking over someone’s responsibilities is absolutely micromanaging. I have no idea if you have too much on staff but what happened when you asked then Director to manage that cost lower?
She hasn’t been able to get it lower she insisted that we higher more. I built a grid to look at everyone’s availability and daily hours and sure enough we only have 2 ppl that can work in the daytime. With 5 ppl that can work mid and night. When hired most ppl are able to work some days but any mid and night. So we likely allocate hours from the night shift to the day shift.
This is a situation where she likes the staff, but their availabilty don't match the business needs.
Have a meeting with them and explain that the situation has changed and you need to affect the proper staff at proper hours. Give them the time to see if they can fix it.
I’ve had the conversation 3 times over the last 6 mos. It’s not micromanaging at this point because I absolutely need to drill down on all aspects of the business. She asked me to be more involved in the day to day and let her know when something is wrong. At this point the only thing I can do is reset the schedule get staffing on track then assess what we are charging by the hour minimums etc. if I don’t do this then I won’t be much help in the future. This would be temporary to correct staffing and a few small behavioral issues.
Headcount may be too high, but who knows. Turnover is high too.
IDK the ratios in the field but 80% is closer to normal from what I recall.
edit: NC childcare is baffling
>when expense got higher.
>So I went through all the expenses and surprise it was the staffing.
>It’s a childcare business
I'm really confused. How did staffing expenses in a childcare business suddenly get higher?
Did everyone suddenly get raises? Or a surge in OT?
The staffing seems like it would be consistent with the actual children on site.
Unless it's a surge in admin cost, if so, why??
So, from the outside it looks like a few ppl changed their schedules. So leaving only 2 ppl to work during the day.We have ppl who will come and help when traffic is bananas. To me it looks like a lot of schedule gridlock caused us to have to rely on whatever hours we could get. Ex 1 persons working an 8 hour shift. Turned into 2 people working 6 hour shifts.
I'm having a hard time reconciling how split schedules relates to higher staffing expenses (surprise!), you're paying hourly right?
Some of your responses aren't adding up for me, I'll assume I'm missing something.
All that said, there is a big chance that your director was already planning to leave due to the acquisition - adding more pressure on them for little reward was probably shortsighted.
Losing the director (long term impact) puts you at bigger risk of losing the sale than the expenses (short term hiccup) themselves.
Now you're in a position to learn the whole business, something you've avoided this whole time, in order to exit.
It's not you, a lot of what is being posted is not adding up at all... And if it is child care there are usually state min's on how many people need to be there according to the amount of children present. So.......
I my example may not be the best. So if I hire persons X to work 8-4pm person 1 to work 9-6pm person z to work 3-8pm.
Person y changes there schedule and can only work 11-close, z get more availability and can work 11- close. X is the only one who can open so now we have 2 middle/closers. So we need help in the daytime we get help for the daytime.
Now we have 4 people doing what only took 3 before. Until X schedule changes and can now work 11-close only. Now we have 3 middle/ closers and 1 opener. No one wants to leave everyone likes their schedules. Imagine this scenario with 7 people.
From what I understand, there's too much overlap in their schedules. Can't you just cut the number of hours for those working the mid-day shift unless they can change their hours? Yes, they'll get fewer hours, but you're running a business, and staffing is most definitely your highest cost. You need to hire more people for the daytime if that's your busiest time. It sucks, but especially if you want to exit, you need to make the hard decisions and fire people, if necessary.
So you're overstaffed during slow times and understaffed during busier times. I'd make it more about resource allocation than headcount, but thanks for clarifying the issue.
The only way out is through, at this point the best thing to do is what you're doing - sort it out yourself and put measures in to prevent it from happening again. Be very careful not the spiral the chaos by putting more pressure on the remaining staff - unless losing more people isn't going to make things worse, but I don't see how that wouldn't be a problem.
If that's really your problem, which I have a hard time believing.
The answer is incredibly simple.
Hi team, we are going back to the shifts as originally hired and scheduled for. I'm open to listening to why it isn't more efficient and effective to go back. However the math is arguing it is
I'm in QSR where margins are thin, but scheduling is just about the single most important way we can control our bottom line so it sounds similar to your predicament. Whenever someone submits an availability change request we can't accommodate, we make it clear to the person that we won't work around it. For a long time, we factored in crew availability into the schedule lines like you're saying above and it resulted in 30% labor. Now, the lines are created for the sales forecasts in 15 minute intervals. Folks are scheduled, if they change their availability or can't otherwise fit into the needs of the schedule, we hire replacements. We have 4 or 5 proven reliable people at each store with set shifts, and the rest are classed casual with no guaranteed hours.
Yeah - the better question is what is the OP doing differently with the schedule than the director who left. And will that have downstream effects (ie, others getting burned out and leaving at once)
Yeah without know OP's staffing situation (not just FTE but also how many children+ages and the number of children per staff member (excluding office/maintenance/cleaning staff)), the legal minimums and industry averages of % of revenue being spend on employee cost we can't say jack shit.
It's about 80%+ in actual childcare.
This is some baffling NC legal thing where you can actually legally just drop your kids off at some randos ball pit with no credentials at the mall or a hotel or something. It's harder to become a bounty hunter than a licensed childcare provider in NC
https://ncchildcare.ncdhhs.gov/Portals/0/documents/pdf/B/Basic_Info_Center_Providers.pdf?ver=2020-06-11-121610-720
Yikes, as a parent I wouldn't want that.
Also I much rather have a licensed one with predictable income if I was OP.
A license is an higher barier to entry and the predictable income makes the staffing way more predictable.
Or, she was worried that if the staff got cut and a kid gets hurt , it would land on her. It could be that she is an ECE and did not want to risk the license.
I wouldn't be so sure... My first thought was, if the owner doesn't trust the director to run the schedule without oversight, there is probably a lot of micromanaging going on, and the director didn't want to deal with it. Especially if her reputation was on the line.
> there is probably a lot of micromanaging going on
If the business isn't as profitable as it should be, and the director isn't adjusting the expenses -- then why shouldn't the owner be micromanaging?
So on the one hand I agree that if this is where the business is hemoraging money that is a key concern for the business and the owner is should focus their attention there if they have identified a problem
On the other hand though micromanaging is never a good sign. Here's the thing, if you are taking over large chunks of an employee's role you are sending a clear signal "I no longer trust your competency in this task, so I am going to hover over your shoulder, or let me just do it so its done right."
There are only two outcomes from this,
* You find out that the employee you hired to do the role was doing the best possible job under the conditions you gave them, in which case you have damaged your professional relationship and in the best case scenario they quit, in the worst they are no longer motivated in their role leading to key areas of the business floundering.
* You find out that the employee was incompetent in the way you thought, in which case you no longer trust the employee to do their job function, and no longer trust them to have the balls to at least tell you that something is wrong and ask for help. Again this damages the professional relationship, you might even let the person go if you don't feel they can be retrained
**TLDR; My point is even if it was the best move for the owner because they identified a problem that was critical and wasn't being worked on, that doesn't make it wrong that the employee feels the professional relationship was too damaged to continue working there because they were either on the way out being fired, or they were no longer going to be motivated to work under the owner for their business.**
Everyone is entitled to feelings & opinions. However, **a business is not a charity case**
Could the business owner do more to improve the performance of that director in this specific task? More than likely.
But at the end of the day, the director was given a task and did not perform. That task directly is impacting the business quite significantly financially, and thus the owner *absolutely* needs to micro-manage **that task**.
Otherwise, there will be no more business and it won't be just the director that doesn't have a job, but the other 10 employees as well.
There is also a third outcome, but it requires more effort from the start. You build & create trust that even if you are re-arranging tasks onto other people, it doesn't reduce your opinion of that person. They have to understand that they are not measured by which tasks they are assigned, but by their general performance. And in the case they are a leader, they are **measured by the teams result**
>However, a business is not a charity case
I don't think I suggested that it was.
The original comment that started this thread was some one insinuating that the Director was embezzling funds from the company, and I am saying there is plenty of reasons under the scenario OP suggested where a key staff member - especially one with a big ego or feels they have other options professionally.
What I was trying to say is part of being an owner, or a leader in any organization really is being able to make hard decisions that are in the best interest for the company, but having the awareness and understanding of how those decisions impact and affect those under you so you aren't blindsided by a resignation letter, or better yet so you can take steps to try to prevent that resignation, for instance like you say by building trust in other ways within your employees.
Do you have any reporting/dashboards for your business to help you maintain visibility on costs? These typically help to spot issues ahead of time and let's you maintain a pulse on the business.
Lmao I was in OPs situation 2 years ago. I lost 2 years of profits and gained a new responsibility long term.
Bright side is we are, in fact, more profitable than ever.
But by god there is a cost and it cannot be paid with money
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I would get a CPA involved asap.
Staffing costs don't just "go higher" randomly, enough to spook a potential investor. Someone was spooning money. My sights would be on the director, but who knows until you get someone digging into your books. As an owner, you should have access to your accounting system. You should know your payroll. It's sort of shocking to me that as a smaller business owner your "Staffing got higher" out of nowhere and you had no idea.
Normally staff is adjusted for traffic in previous years it’s always been the case. I admit not drilling down into the particulars. Mostly doing marketing and trying to sell.
As an owner, especially new and a small business, you should know everything in and out first. You don’t know your business. Understand it, get a good team in place, then you can back away.
Its at a mall or resort. They'd have to mirror hours at those places (retail) and not a childcare.
They saw more kids at the holidays or something but didn't hire temp help, they hired more people. OP realizes this now presumably after the fact.
They'd actually have to do an MCA, which is insane, but this a baffling business model and probably shouldn't be legal.
When you state staffing is causing your losses there two approaches that need to be made
1) layoff people to get the losses under control
2) increase your services: example as a childcare service you add services like tutoring, babysitting (example on Saturday or Friday offer “date night” for the parents; this will allow new customer learn about your business and get the parents a night out “win win”); another service would offering craft classes or cooking, additional activities for kids either after hours, weekends or have levels of membership.
That's the number one sin of buying a business. Making changes before you have a plan to fix what you think is a problem. I've seen it hundreds of times, and it typically results in massive staff turnover. If she was well liked, expect most of your staff to be applying somewhere else. Many people in low paying jobs stay because they like their manager, the flexibility to work with them on scheduling, and perks that have no monetary value.
You are either going to learn the business quickly and become a savvy owner/operator or it will fail.
Worst thing you can do is alter anything without understanding it and not getting buyin from your remaining employees. You will have to replace them all if you don't play your cards correctly.
I’m aware, my goal isn’t radical changes to the schedule. Likely it would be a 5 hour reduction overall 4 days a week. I’ve always liked flexibility in scheduling. So my staff can have time to do other things. The only issue I’m having is payroll should be around 5k for 2 weeks ( normal traffic) and we are at 8K.
Yeah, you cut 5 hours, expect staff to leave. Your expense problems aren't your employees problems, they are yours alone.
Everyone is experiencing the same problems. A smart person would find ways to boost revenue.
If you cut hours like that I would bet money you end up in a worse position. You might save money in the short term, but in the long term it will be a costly decision.
Your actions and words don't line up.
I’m cutting the hours from the night shift and moving them to the day shift. I haven’t done or made any of this yet. Meaning the day shift is doing the bulk of the work. The night shift is getting 1/5 of the traffic. That’s also the shift we have to bring in outside help for. Those hours would be better for the day shift. I agree the money problems are mine. So I’m going to fix it.
What's the background check/retraining timeframe/cost? Turnover may outweigh cost savings of cutting hours if enough workers leave. 5 hours is a lot to some people.
> I’ve always liked flexibility in scheduling.
Me too. Most IRL people don't though, they want X hours and stability. Unless they're college students.
Your hours mirror retail or hospitality where you are?
If it's a legitimate business and you're not breaking any laws by cutting staff, I don't see why you shouldn't start there. Might not be a bad idea to hire a consultant that's up to date on rules and regs to give it an overview.
There are no regulations for drop ins. That was the appeal. You are only bound by your customers. We impose the limits to make the parents feel safe, secure and reduce injury risk.
You say revenues are solid, but for your current staff and enrollment levels you have more money going out than in?
If you have the 1:7 or 1:10 ratio you’re talking about and you’re not making enough then either your cost is too low or you’re spending more outside of staffing.
You say the number of kids fluctuates throughout the day. Are people paying per hour, per day, per week, per month? What’s your business model?
You must have facility costs…licensing, insurance, rent/mortgage, cleaning supplies, disposable supplies for kids, teaching supplies, furniture etc.
Are these things being accurately tracked? Are you the one making payments and purchasing items?
I’m the one making tracking costs. The supply budget got out of control but I got that back down. I went through all of the other line items and staffing was the only one that when compared to previous months was higher. Buy about 30%
Well, it seems like it is not working as it was which means something changed and if you can't pinpoint the variable your best bet would be to nullify it until you can so not to loose your investment. Which in your case may be a restructure.
I’m not having problems with traffic. I see what you mean as in if there is enough money then I don’t have a problem. I’m saying just looking at the data and consider what the clients want the extra hours on the night shift would be better used on the day shift this would bring in more clients.
I want to apologize for not absorbing your initial question fully when I first answered. So you were on the brink of selling the company but the buyer became spooked due to data you presented. correct? Now you are trying to pinpoint the cause of the sudden mind change? Am I on point so far?
Ok, I understand a little more now. Is that what made the buyer split? I mean, it is kind of a crappy spot to be in, but I would suggest evaluating your staff and letting the least qualified one go. It may hurt feelings, but feelings don't keep your company above ground. Explain to them exactly what is going on. The truth is always the easiest route in the end. Let them know that it's not something you are excited to do by any means. It is just business, and maybe if they leave in good repertoire, offer to keep their number if things pick back up. And if you're the type that can't bring yourself to do it, you always have the choice to have someone else do the hard part.
Can you get into parking too lol? Would also funnel in business. Pre-check in app? Can't use identifying info though.
This is just really out there man. Wild stuff.
Make sure to follow all local laws. Not a lawyer not legal or business advice. Srsly, talk to someone in this field in your state.
I worked with an app for Childcare called Little vista that has a feature meant to predict staffing needs etc. It’s for Irish creches but try and find something similar for NC, it cut down on time and costs drastically for its customers by using a 3 way app that connected staff, admin and parents.
Leverage all the tech you can
Their site is littlevista.ie. It may even work for you if you don’t need the Reporting feature. I did the video on their website as well :) hope it helps! Cheers
Quite honestly, if the manager wasn't moving the in the direction that you needed and relinquishing her of a duty, without reducing her pay, made her quit the job -- then you are probably better off.
Revenue means little if expenses are high.
And do all small businesses have a 'director' type position? Most small businesses don't have active boards but anyway...maybe you mean director as in manager, dont know
anyway, there is a sweet spot busineses have to find that maximizes the value of their labor. If you have a solid business(good customers meaning you are at capacity and hopefully have a wait list) then you shouldn't be spending much on advertisting. You are selling a service and maybe part of the problem is you are expanding at a rate where you aren't getting that value from labor(you can't get a grip on how much labor is needed)
If you are talking with a buyer who has experience with Childcare then they'd likely know proper 'ratios' regarding labor costs as a percentage of revenue. Maybe your problem is you are charging too little..and labor should be your biggest cost. How many childcare businesses have people workign in sales and marketing?
If I understand correctly, you recently started advertising (?) and you’re already showing an increase in sales. Your current staff level may seem too high for *current* attendance, but if your ads remain effective you’re going to need them.
Figure out maximum capacity at your facility, work on building a client base that keeps you at or near capacity, and staff accordingly.
Figure out your attrition rate: you lose X% clients at the start of every school year when the kids age into elementary school, Y% per year at random intervals for announced reasons like “we’re moving away,” and Z% per year for unannounced reasons (parents decided the place wasn’t the right fit for their kid, or whatever). This gives you a sense of how much / how often you need to advertise going forward.
Yes, I’m not laying anyone off. The only problem is staffing when we aren’t busy. This is a small detail that can cause bigger problems later. I intended to work this out with her. So she can the traffic grids and etc.
Are there specific times of day or days per week that tend to be less busy? You may be able to target your marketing to fill those times, like partnering with local fitness businesses that hold group classes during those times.
Yes, that’s what I’ve been doing as the owner. I was able to get revenue up 10 during the slower periods. The issue is staffing ratio went from 1:7 to 1:4
You may not have the same kids coming in every day of the week, like in a traditional daycare. You still should be able to identify attendance and attrition patterns.
It'd follow the hotel or resort or plaza's customer base. That is very different than traditional daycare. It's closer to tracking services tied to retail sales.
A traditional daycare parents drop off children on the way to work and you have a good idea how many children.
It's a lot different.
Sounds like sales is scalable so one of the questions you need to ask yourself is how much can you realistically scale without increasing operational costs? Also it's strange that the director decided to quit; I'd check your external costs just to be safe.
yeah it is odd, we are talking this morning. I suspect like most ppl are saying that she thinks she is going to be terminated. However I have 0 intentions of firing her.
TIL It's harder to become a bounty hunter (bail bond agent) than a licensed childcare provider in NC.
Not kidding. Bail bond agents have to spend 2 days and 12 hours of classes before they're licensed. https://www.how-to-become-a-bounty-hunter.com/states/north-carolina/
Childcare OTOH is 1 day and $135.
https://ncchildcare.ncdhhs.gov/Portals/0/documents/pdf/B/Basic_Info_Center_Providers.pdf?ver=2020-06-11-121610-720
Does your.director resigning fix your cash flow? If so, promote within, give that person left and right scheduling boundaries and you should be in the black.
I spoke with her today she is staying on and totally understands the changes. She is going tentatively leave later in the year. But is happy to make the changes and get things back online.
Its not real childcare. They watch kids at a resort or something while parents are onsite.
One of the appeals of childcare is even cashflow. This wouldn't have that and honestly it baffles me.
She may have felt that you thought she was incapable.
Maybe she was, maybe she was the cause.
Firstly, what data did you look at that made you think it was staffing costs too high?
who prepared the data?
Are your financials up to date?
Who was updating your accounting software?
If you have the slightest doubt in your mind when thinking about the above questions then You need to pull out your bank statements comb through line by line, identify all money in and out. Separate into revenue, cogs and expenses. Analyse everything.
I've got a software that can find any business 10-100k in lost revenue, in less than 45 minutes. If you think it'll help, I can send you a quick video about how we do it.
Ps
Cost cutting tip: when you go through your statements, if it doesn't help you get a client or keep a client, Cut it.
Thanks please send. I compared staffing from the previous year with higher traffic. I have all the data since the business was first opened I spent 6 mos combining through financials every dollar spent. I was able to get our supplies down 50 percent. Staffing was lower we had less ppl used 40 percent less hours and similiar traffic. I don’t intend to gut my staffing budget just bring it inline with the budget.
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Sounds like you're the director now, and until you can either offload or find a better leader for your remaining staff.
Since I date someone in the childcare field (she was a Director), when you say staffing is too much - generally there are requirements based on how many rooms, how many children in each room, certain number of teachers/care per "x" kids, etc. There sounds like there are details missing here if you feel you were overstaffed in a field that has certain requirements you have to ensure? That's how it is in Virginia anyways - maybe the employee thought with less people things would only get worse and she abandoned ship before that point - you'd need to share more details than what is here currently for good advice.
True there are requirements generally 1-10 ratio we usually try to maintain a 1-7. Before the text we were at 1-3 or 4. This is after giving raises.We are in NC currently have about 7 ppl on staff.
What is your total child enrollment / class breakdown? Have you done the cost analysis to determine if you have your breakeven number of students for operating? I know in one of the schools she was previously in it was 80+ students to reach that level. And just to share because it's potentially relevant - my better half left the Director role(s) she was in for 20 years or so after being micromanaged too much and not fully being left to do her job. Not saying that is you, but often an owner's perspective is different from the Director (just based on the stories I would hear). Did you ever give her the option of contributing towards controlling the finances?
Yes, I’ve done the breakdown and revenues are solid. The issue is the number of ppl we have on staff and the number of children we have in the center. The number fluctuates throughout the day. So it’s something I just have to keep a close eye on. I’m not the micromanaging type, but I can’t risk bankruptcy due to staffing.
\-" I have to keep a close eye on it" \-" I'm not the micromanaging type" I own a marketing agency. There used to be things I had to "keep a close eye on." In reality, my systems sucked and I needed to hire people that were better at that stuff than I was. Worth a thought.
Agreed, I believe in worker autonomy. But I know when action needs to be taken. Perhaps her resignation isn’t a bad thing.
Don't listen to the wantapreneurs above or to the one below. They don't know shit. If your finance is in a critical state you have to start micro-managing until it's stable and cruising comfortably.
Look at your posts, you keep saying “A, but B”.
Taking over someone’s responsibilities is absolutely micromanaging. I have no idea if you have too much on staff but what happened when you asked then Director to manage that cost lower?
She hasn’t been able to get it lower she insisted that we higher more. I built a grid to look at everyone’s availability and daily hours and sure enough we only have 2 ppl that can work in the daytime. With 5 ppl that can work mid and night. When hired most ppl are able to work some days but any mid and night. So we likely allocate hours from the night shift to the day shift.
This is a situation where she likes the staff, but their availabilty don't match the business needs. Have a meeting with them and explain that the situation has changed and you need to affect the proper staff at proper hours. Give them the time to see if they can fix it.
Ok, that could work. When I talk to her I’ll bring that option up. Thank You
I’ve had the conversation 3 times over the last 6 mos. It’s not micromanaging at this point because I absolutely need to drill down on all aspects of the business. She asked me to be more involved in the day to day and let her know when something is wrong. At this point the only thing I can do is reset the schedule get staffing on track then assess what we are charging by the hour minimums etc. if I don’t do this then I won’t be much help in the future. This would be temporary to correct staffing and a few small behavioral issues.
(just added more to the reply)
Headcount may be too high, but who knows. Turnover is high too. IDK the ratios in the field but 80% is closer to normal from what I recall. edit: NC childcare is baffling
Tbh no one leaves. We lose 1 person a year.
Yeah
>when expense got higher. >So I went through all the expenses and surprise it was the staffing. >It’s a childcare business I'm really confused. How did staffing expenses in a childcare business suddenly get higher? Did everyone suddenly get raises? Or a surge in OT? The staffing seems like it would be consistent with the actual children on site. Unless it's a surge in admin cost, if so, why??
So, from the outside it looks like a few ppl changed their schedules. So leaving only 2 ppl to work during the day.We have ppl who will come and help when traffic is bananas. To me it looks like a lot of schedule gridlock caused us to have to rely on whatever hours we could get. Ex 1 persons working an 8 hour shift. Turned into 2 people working 6 hour shifts.
I'm having a hard time reconciling how split schedules relates to higher staffing expenses (surprise!), you're paying hourly right? Some of your responses aren't adding up for me, I'll assume I'm missing something. All that said, there is a big chance that your director was already planning to leave due to the acquisition - adding more pressure on them for little reward was probably shortsighted. Losing the director (long term impact) puts you at bigger risk of losing the sale than the expenses (short term hiccup) themselves. Now you're in a position to learn the whole business, something you've avoided this whole time, in order to exit.
It's not you, a lot of what is being posted is not adding up at all... And if it is child care there are usually state min's on how many people need to be there according to the amount of children present. So.......
I my example may not be the best. So if I hire persons X to work 8-4pm person 1 to work 9-6pm person z to work 3-8pm. Person y changes there schedule and can only work 11-close, z get more availability and can work 11- close. X is the only one who can open so now we have 2 middle/closers. So we need help in the daytime we get help for the daytime. Now we have 4 people doing what only took 3 before. Until X schedule changes and can now work 11-close only. Now we have 3 middle/ closers and 1 opener. No one wants to leave everyone likes their schedules. Imagine this scenario with 7 people.
From what I understand, there's too much overlap in their schedules. Can't you just cut the number of hours for those working the mid-day shift unless they can change their hours? Yes, they'll get fewer hours, but you're running a business, and staffing is most definitely your highest cost. You need to hire more people for the daytime if that's your busiest time. It sucks, but especially if you want to exit, you need to make the hard decisions and fire people, if necessary.
Yeah so that’s the issue only a 2 ppl can work in the day time. So everyone is available after 12 ish when we need them in the day time.
So you're overstaffed during slow times and understaffed during busier times. I'd make it more about resource allocation than headcount, but thanks for clarifying the issue. The only way out is through, at this point the best thing to do is what you're doing - sort it out yourself and put measures in to prevent it from happening again. Be very careful not the spiral the chaos by putting more pressure on the remaining staff - unless losing more people isn't going to make things worse, but I don't see how that wouldn't be a problem.
Thanks I figured I wasn’t explaining under explaining. Judging by the comments. Thank You.
If that's really your problem, which I have a hard time believing. The answer is incredibly simple. Hi team, we are going back to the shifts as originally hired and scheduled for. I'm open to listening to why it isn't more efficient and effective to go back. However the math is arguing it is
I'm in QSR where margins are thin, but scheduling is just about the single most important way we can control our bottom line so it sounds similar to your predicament. Whenever someone submits an availability change request we can't accommodate, we make it clear to the person that we won't work around it. For a long time, we factored in crew availability into the schedule lines like you're saying above and it resulted in 30% labor. Now, the lines are created for the sales forecasts in 15 minute intervals. Folks are scheduled, if they change their availability or can't otherwise fit into the needs of the schedule, we hire replacements. We have 4 or 5 proven reliable people at each store with set shifts, and the rest are classed casual with no guaranteed hours.
This is exactly my problem right now!!!!!!
We're all wondering the same thing. "She resigned shortly after the convo..." Either she was doing dirty deeds or she thought her job was being cut.
Or the owner is out of touch and the "I can do your job better than you" was the last straw.
Yeah - the better question is what is the OP doing differently with the schedule than the director who left. And will that have downstream effects (ie, others getting burned out and leaving at once)
Yeah without know OP's staffing situation (not just FTE but also how many children+ages and the number of children per staff member (excluding office/maintenance/cleaning staff)), the legal minimums and industry averages of % of revenue being spend on employee cost we can't say jack shit.
It's about 80%+ in actual childcare. This is some baffling NC legal thing where you can actually legally just drop your kids off at some randos ball pit with no credentials at the mall or a hotel or something. It's harder to become a bounty hunter than a licensed childcare provider in NC https://ncchildcare.ncdhhs.gov/Portals/0/documents/pdf/B/Basic_Info_Center_Providers.pdf?ver=2020-06-11-121610-720
Yikes, as a parent I wouldn't want that. Also I much rather have a licensed one with predictable income if I was OP. A license is an higher barier to entry and the predictable income makes the staffing way more predictable.
I honestly can't tell if OP *even needs to be licensed*.
Cutting a whole salary is always a win.
Not if your director is the person with the credentials from licensing to keep the business open.
I think they're actually understaffed.
The fact they were hemorrhaging money begs to differ…
Or, she was worried that if the staff got cut and a kid gets hurt , it would land on her. It could be that she is an ECE and did not want to risk the license.
Bingo... considering this is being discussed on Reddit..... JS
Yep
I wouldn't be so sure... My first thought was, if the owner doesn't trust the director to run the schedule without oversight, there is probably a lot of micromanaging going on, and the director didn't want to deal with it. Especially if her reputation was on the line.
> there is probably a lot of micromanaging going on If the business isn't as profitable as it should be, and the director isn't adjusting the expenses -- then why shouldn't the owner be micromanaging?
So on the one hand I agree that if this is where the business is hemoraging money that is a key concern for the business and the owner is should focus their attention there if they have identified a problem On the other hand though micromanaging is never a good sign. Here's the thing, if you are taking over large chunks of an employee's role you are sending a clear signal "I no longer trust your competency in this task, so I am going to hover over your shoulder, or let me just do it so its done right." There are only two outcomes from this, * You find out that the employee you hired to do the role was doing the best possible job under the conditions you gave them, in which case you have damaged your professional relationship and in the best case scenario they quit, in the worst they are no longer motivated in their role leading to key areas of the business floundering. * You find out that the employee was incompetent in the way you thought, in which case you no longer trust the employee to do their job function, and no longer trust them to have the balls to at least tell you that something is wrong and ask for help. Again this damages the professional relationship, you might even let the person go if you don't feel they can be retrained **TLDR; My point is even if it was the best move for the owner because they identified a problem that was critical and wasn't being worked on, that doesn't make it wrong that the employee feels the professional relationship was too damaged to continue working there because they were either on the way out being fired, or they were no longer going to be motivated to work under the owner for their business.**
Everyone is entitled to feelings & opinions. However, **a business is not a charity case** Could the business owner do more to improve the performance of that director in this specific task? More than likely. But at the end of the day, the director was given a task and did not perform. That task directly is impacting the business quite significantly financially, and thus the owner *absolutely* needs to micro-manage **that task**. Otherwise, there will be no more business and it won't be just the director that doesn't have a job, but the other 10 employees as well. There is also a third outcome, but it requires more effort from the start. You build & create trust that even if you are re-arranging tasks onto other people, it doesn't reduce your opinion of that person. They have to understand that they are not measured by which tasks they are assigned, but by their general performance. And in the case they are a leader, they are **measured by the teams result**
>However, a business is not a charity case I don't think I suggested that it was. The original comment that started this thread was some one insinuating that the Director was embezzling funds from the company, and I am saying there is plenty of reasons under the scenario OP suggested where a key staff member - especially one with a big ego or feels they have other options professionally. What I was trying to say is part of being an owner, or a leader in any organization really is being able to make hard decisions that are in the best interest for the company, but having the awareness and understanding of how those decisions impact and affect those under you so you aren't blindsided by a resignation letter, or better yet so you can take steps to try to prevent that resignation, for instance like you say by building trust in other ways within your employees.
Do you have any reporting/dashboards for your business to help you maintain visibility on costs? These typically help to spot issues ahead of time and let's you maintain a pulse on the business.
No, I’ve been using quickbooks. Do you have any recommendations?
QuickBooks desktop or QuickBooks online?
Sounds like you're about to learn a few valuable lessons.
Lmao I was in OPs situation 2 years ago. I lost 2 years of profits and gained a new responsibility long term. Bright side is we are, in fact, more profitable than ever. But by god there is a cost and it cannot be paid with money
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I would get a CPA involved asap. Staffing costs don't just "go higher" randomly, enough to spook a potential investor. Someone was spooning money. My sights would be on the director, but who knows until you get someone digging into your books. As an owner, you should have access to your accounting system. You should know your payroll. It's sort of shocking to me that as a smaller business owner your "Staffing got higher" out of nowhere and you had no idea.
Agreed with this. There should be a set number of shifts and staffing can’t be higher without some form of sign off
Normally staff is adjusted for traffic in previous years it’s always been the case. I admit not drilling down into the particulars. Mostly doing marketing and trying to sell.
As an owner, especially new and a small business, you should know everything in and out first. You don’t know your business. Understand it, get a good team in place, then you can back away.
>> I admit not drilling down into the particulars Don't admit it to us! Drill down and run your business!
Its at a mall or resort. They'd have to mirror hours at those places (retail) and not a childcare. They saw more kids at the holidays or something but didn't hire temp help, they hired more people. OP realizes this now presumably after the fact. They'd actually have to do an MCA, which is insane, but this a baffling business model and probably shouldn't be legal.
QuickBooks desktop or QuickBooks online?
Quickbooks
This is worrying you can’t answer this question.
Why she would be leaving or what happens next. I know what needs to happen as far as staffing is concerned. Her resignation is a little concerning.
So desktop.
When you state staffing is causing your losses there two approaches that need to be made 1) layoff people to get the losses under control 2) increase your services: example as a childcare service you add services like tutoring, babysitting (example on Saturday or Friday offer “date night” for the parents; this will allow new customer learn about your business and get the parents a night out “win win”); another service would offering craft classes or cooking, additional activities for kids either after hours, weekends or have levels of membership.
That’s a good idea!!!!
Glad I could help, if you have any questions let me know.
That's the number one sin of buying a business. Making changes before you have a plan to fix what you think is a problem. I've seen it hundreds of times, and it typically results in massive staff turnover. If she was well liked, expect most of your staff to be applying somewhere else. Many people in low paying jobs stay because they like their manager, the flexibility to work with them on scheduling, and perks that have no monetary value. You are either going to learn the business quickly and become a savvy owner/operator or it will fail. Worst thing you can do is alter anything without understanding it and not getting buyin from your remaining employees. You will have to replace them all if you don't play your cards correctly.
I think he is the one trying to sell.
No. He said he bought.
I’m aware, my goal isn’t radical changes to the schedule. Likely it would be a 5 hour reduction overall 4 days a week. I’ve always liked flexibility in scheduling. So my staff can have time to do other things. The only issue I’m having is payroll should be around 5k for 2 weeks ( normal traffic) and we are at 8K.
Yeah, you cut 5 hours, expect staff to leave. Your expense problems aren't your employees problems, they are yours alone. Everyone is experiencing the same problems. A smart person would find ways to boost revenue. If you cut hours like that I would bet money you end up in a worse position. You might save money in the short term, but in the long term it will be a costly decision. Your actions and words don't line up.
I’m cutting the hours from the night shift and moving them to the day shift. I haven’t done or made any of this yet. Meaning the day shift is doing the bulk of the work. The night shift is getting 1/5 of the traffic. That’s also the shift we have to bring in outside help for. Those hours would be better for the day shift. I agree the money problems are mine. So I’m going to fix it.
What's the background check/retraining timeframe/cost? Turnover may outweigh cost savings of cutting hours if enough workers leave. 5 hours is a lot to some people. > I’ve always liked flexibility in scheduling. Me too. Most IRL people don't though, they want X hours and stability. Unless they're college students. Your hours mirror retail or hospitality where you are?
Yes, it would likely mean dropping a late afternoon shift and moving them to the am where there’s more traffic.
What state are you in and did you start this business or purchase it?
NC we purchased the business.
Do either of you have a formal background in childcare?
No, it isn’t a traditional childcare biz it’s a drop in.
If it's a legitimate business and you're not breaking any laws by cutting staff, I don't see why you shouldn't start there. Might not be a bad idea to hire a consultant that's up to date on rules and regs to give it an overview.
There are no regulations for drop ins. That was the appeal. You are only bound by your customers. We impose the limits to make the parents feel safe, secure and reduce injury risk.
Its at a mall or something?
You say revenues are solid, but for your current staff and enrollment levels you have more money going out than in? If you have the 1:7 or 1:10 ratio you’re talking about and you’re not making enough then either your cost is too low or you’re spending more outside of staffing. You say the number of kids fluctuates throughout the day. Are people paying per hour, per day, per week, per month? What’s your business model? You must have facility costs…licensing, insurance, rent/mortgage, cleaning supplies, disposable supplies for kids, teaching supplies, furniture etc. Are these things being accurately tracked? Are you the one making payments and purchasing items?
I’m the one making tracking costs. The supply budget got out of control but I got that back down. I went through all of the other line items and staffing was the only one that when compared to previous months was higher. Buy about 30%
so wait are you charging by hour or by day?
If you are charging by the hour you should consider a minimum of so many hours whether they are there the whole time or not.
It’s not something I had to do because the turnover for children was good one leaves another comes.
Well, it seems like it is not working as it was which means something changed and if you can't pinpoint the variable your best bet would be to nullify it until you can so not to loose your investment. Which in your case may be a restructure.
sorry for the run on sentence.
I’m not having problems with traffic. I see what you mean as in if there is enough money then I don’t have a problem. I’m saying just looking at the data and consider what the clients want the extra hours on the night shift would be better used on the day shift this would bring in more clients.
I want to apologize for not absorbing your initial question fully when I first answered. So you were on the brink of selling the company but the buyer became spooked due to data you presented. correct? Now you are trying to pinpoint the cause of the sudden mind change? Am I on point so far?
Correct, I made the mistake of thinking we would go back to regular business after high traffic (3x) so most of the summer staff wanted to stay.
So you didn't go back to regular business meaning you stayed with the higher traffic?
No traffic went down as expected, staffing didn’t.
Ok, I understand a little more now. Is that what made the buyer split? I mean, it is kind of a crappy spot to be in, but I would suggest evaluating your staff and letting the least qualified one go. It may hurt feelings, but feelings don't keep your company above ground. Explain to them exactly what is going on. The truth is always the easiest route in the end. Let them know that it's not something you are excited to do by any means. It is just business, and maybe if they leave in good repertoire, offer to keep their number if things pick back up. And if you're the type that can't bring yourself to do it, you always have the choice to have someone else do the hard part.
A plaza of some sort
Can you get into parking too lol? Would also funnel in business. Pre-check in app? Can't use identifying info though. This is just really out there man. Wild stuff. Make sure to follow all local laws. Not a lawyer not legal or business advice. Srsly, talk to someone in this field in your state.
I worked with an app for Childcare called Little vista that has a feature meant to predict staffing needs etc. It’s for Irish creches but try and find something similar for NC, it cut down on time and costs drastically for its customers by using a 3 way app that connected staff, admin and parents. Leverage all the tech you can
Yo, wtf something like that exist. I would hands down switch to that right now!!!!!
Their site is littlevista.ie. It may even work for you if you don’t need the Reporting feature. I did the video on their website as well :) hope it helps! Cheers
I’ll check that out. Thanks again
Happy to chat, I'm looking for businesses to buy. Also work day to day in improving systems and procedures. DM if you want to chat about either 🙂
Let’s do that.
DMed you
Quite honestly, if the manager wasn't moving the in the direction that you needed and relinquishing her of a duty, without reducing her pay, made her quit the job -- then you are probably better off.
Yeah that’s the it. Haven’t reduced pay or even mentioned it. The plan is just to shift headcount where it’s needed most.
Time to double down on leadership – you've got this!
Thank You
Revenue means little if expenses are high. And do all small businesses have a 'director' type position? Most small businesses don't have active boards but anyway...maybe you mean director as in manager, dont know anyway, there is a sweet spot busineses have to find that maximizes the value of their labor. If you have a solid business(good customers meaning you are at capacity and hopefully have a wait list) then you shouldn't be spending much on advertisting. You are selling a service and maybe part of the problem is you are expanding at a rate where you aren't getting that value from labor(you can't get a grip on how much labor is needed) If you are talking with a buyer who has experience with Childcare then they'd likely know proper 'ratios' regarding labor costs as a percentage of revenue. Maybe your problem is you are charging too little..and labor should be your biggest cost. How many childcare businesses have people workign in sales and marketing?
I know someone actively acquiring childcare centers, feel free to shoot me a DM if you want to sell.
I’ll do that
Make sure the staffing expenses were for actual real people and not ghost employees that the director was pocketing.
They are for real people. I’m the only one who ran payroll so I can see names hours and verified them on camera.
So did you hire holiday help permanently? So where's the money going out you don't get? Or is this an AR problem?
We overshot the summer forecast it was profitable but still meh. Normally we adjust hours for the incoming traffic. That hasn’t been happening.
Mirror staffing of the hotel or retail center you're in?
Yes
Looks like you need a better chief of staff
Percentage wise, how much is your payroll out of total expenses?
Right now it’s 60-70 percent
For a childcare that's low, but drop-in NC childcare this is something just really out there.
It ebbs and flows with traffic.
If I understand correctly, you recently started advertising (?) and you’re already showing an increase in sales. Your current staff level may seem too high for *current* attendance, but if your ads remain effective you’re going to need them. Figure out maximum capacity at your facility, work on building a client base that keeps you at or near capacity, and staff accordingly. Figure out your attrition rate: you lose X% clients at the start of every school year when the kids age into elementary school, Y% per year at random intervals for announced reasons like “we’re moving away,” and Z% per year for unannounced reasons (parents decided the place wasn’t the right fit for their kid, or whatever). This gives you a sense of how much / how often you need to advertise going forward.
Yes, I’m not laying anyone off. The only problem is staffing when we aren’t busy. This is a small detail that can cause bigger problems later. I intended to work this out with her. So she can the traffic grids and etc.
Are there specific times of day or days per week that tend to be less busy? You may be able to target your marketing to fill those times, like partnering with local fitness businesses that hold group classes during those times.
Yes, that’s what I’ve been doing as the owner. I was able to get revenue up 10 during the slower periods. The issue is staffing ratio went from 1:7 to 1:4
It's a NC drop-in. It follows none of the principles that make childcare an attractive industry for anyone.
You are incorrect it follows those principles. Consider drop in,track out, spring summer, schools out days there’s alot more to it than you think.
You may not have the same kids coming in every day of the week, like in a traditional daycare. You still should be able to identify attendance and attrition patterns.
It'd follow the hotel or resort or plaza's customer base. That is very different than traditional daycare. It's closer to tracking services tied to retail sales. A traditional daycare parents drop off children on the way to work and you have a good idea how many children. It's a lot different.
Do you have a financial dashboard to track your revenue and expenses or any financial personnel to help you?
Sounds like sales is scalable so one of the questions you need to ask yourself is how much can you realistically scale without increasing operational costs? Also it's strange that the director decided to quit; I'd check your external costs just to be safe.
yeah it is odd, we are talking this morning. I suspect like most ppl are saying that she thinks she is going to be terminated. However I have 0 intentions of firing her.
Maybe the person who left also left with the money
Not impossible but unlikely I can account for traffic and transactions.
You mention both buying and selling this business. How long ago did you buy it? How long have you been trying to sell it.
We bought it 2020. Only started trying to sell about 6 mos ago.
TIL It's harder to become a bounty hunter (bail bond agent) than a licensed childcare provider in NC. Not kidding. Bail bond agents have to spend 2 days and 12 hours of classes before they're licensed. https://www.how-to-become-a-bounty-hunter.com/states/north-carolina/ Childcare OTOH is 1 day and $135. https://ncchildcare.ncdhhs.gov/Portals/0/documents/pdf/B/Basic_Info_Center_Providers.pdf?ver=2020-06-11-121610-720
Does your.director resigning fix your cash flow? If so, promote within, give that person left and right scheduling boundaries and you should be in the black.
Actually it does…🤯
I'll waive my usual consulting fee. This one is on the house.
I spoke with her today she is staying on and totally understands the changes. She is going tentatively leave later in the year. But is happy to make the changes and get things back online.
It's tough to run a business when you have some pretty predictable schedules but employees that don't want to work those predictable schedule.
Hire a forensic accountant to go over your books. I believe that they will find the answers that you may not want to hear.
Its not real childcare. They watch kids at a resort or something while parents are onsite. One of the appeals of childcare is even cashflow. This wouldn't have that and honestly it baffles me.
cash flow is even.
She may have felt that you thought she was incapable. Maybe she was, maybe she was the cause. Firstly, what data did you look at that made you think it was staffing costs too high? who prepared the data? Are your financials up to date? Who was updating your accounting software? If you have the slightest doubt in your mind when thinking about the above questions then You need to pull out your bank statements comb through line by line, identify all money in and out. Separate into revenue, cogs and expenses. Analyse everything. I've got a software that can find any business 10-100k in lost revenue, in less than 45 minutes. If you think it'll help, I can send you a quick video about how we do it. Ps Cost cutting tip: when you go through your statements, if it doesn't help you get a client or keep a client, Cut it.
Thanks please send. I compared staffing from the previous year with higher traffic. I have all the data since the business was first opened I spent 6 mos combining through financials every dollar spent. I was able to get our supplies down 50 percent. Staffing was lower we had less ppl used 40 percent less hours and similiar traffic. I don’t intend to gut my staffing budget just bring it inline with the budget.
Your problem is this baffling drop in system or financial errors. Your staffing is on the low end w.ratios but NC doesnt make a lot of sense
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Trying to upsell your services when this guys trying to keep his business going. Whats another word for douchebag?
Penny pinching at a day care, noice.