1

The Importance of
Planning
The Issues
If you offer a childcare service and ask the users of the service to contribute towards
the costs, then you’re running a business.
If you have set out in business to make a range of relevant and up-to-date policies
profit, then your business will need to be and procedures. Above all, it’s about being
planned in a way that enables you to able to step back from the day-to-day
make a surplus that can be drawn from organisation and start thinking strategically.
the business as profit for yourself, your
The principals of planning for success are
partners or shareholders.
simple:
If your childcare business is not run for- 1 You need to make an assessment of
profit (as for example, a voluntary organi- where you are against a small num-
sation), you still need to make a surplus ber of key business areas.
from your operations, but the surplus
needs to be reinvested in the organisation 2 From an assessment of where you
to provide future security and investment. are currently, you need to decide
where you are going and set objec-
In many respects, whether you make a
tives for getting there.
profit from the business is not a consider-
ation (see Section 2), but whether you 3 An Action Plan needs to be developed
survive or not is important to you, the par- to set out the route to achieving your
ents and carers who rely on your service objectives through the business
and the children who benefit from high planning process.
quality care. 4 Once you’ve started the process,
Business planning, though, is not only about you shouldn’t stop! Once you have a
finance (although this is very important), plan, you need to spend time imple-
but about business structures, market menting it, reviewing it, and then,
research, planning, funding, legality, based on your successes and failures,
staffing, marketing and having in place a start the process again.

“If you don’t know where you are going you are sure to end up somewhere else.”

Mark Twain

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Good Practice
Why think about business plans?
There are many reasons why you would o A comprehensive business plan
not wish to draw up a business plan or should provide much of the evi-
think strategically: dence required for inspection by
Ofsted and be the cornerstone of
o Just keeping going on a day-to-day
achieving a Quality Assurance mark.
basis is often enough of a struggle –
particularly with a management o The constant rate of change and
comprising of volunteers. uncertainty in the childcare sector
means that no childcare organisa-
o The language of business planning
tion can afford to stand still.
is often off-putting.
o Changes in legislation, new funding,
o The word ‘business’ might be objec-
short-term priorities and new ways
tionable to some people within your
of working mean that you can easily
organisation.
be reactive to external events rather
o It is difficult to plan in a period of than taking a grip on where they are
constant change. going and on what they are doing.
o The goal posts keep moving! o A business plan can be a ‘living’
o The organisation has a lack of skills document that provides a service to
or resources to develop and imple- your organisation. Having a good
ment a business plan. business plan is almost like having
an extra member of staff.
Luckily, there are several better reasons
for you to think about Business Planning: o All childcare organisations are going
somewhere. The future could be
o A business plan is usually required about getting bigger or getting small-
before a lender or funder will consider er; doing more or doing less; doing
an application for money to start-up the same things or doing new things.
or develop your childcare business.

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Practical Tips and Hints

Toolkit you will find a Checklist with some
The key business key questions to ask. Alternatively, all of
functions that need the approved childcare Quality Assurance
to be managed schemes provide a foundation of gath-
ered evidence from which an assessment
There are a number of key business func- of your current practice can also be made
tions that need to be managed for your (see Quality Assurance in section 11).
organisation to become more strategic
and therefore more successful. Setting the
These are, in general, the areas covered Objectives – ‘where
in the rest of this Toolkit:
o Management & Organisational
we want to go’ as a
Structures. business
o Researching and understanding Once a complete assessment of your cur -
needs. rent situation has been made, the next
step is to look at where you are heading
o Financial Planning. (or should be heading!).
o Funding & Fund-Raising. This can be difficult, as in many groups,
o Awareness of Legal Issues and not all those involved in the organisation
Responsibilities. (managers, staff, parents and children)
will have the same sense of purpose or
o Financial Management.
vision. Part of the business planning
o Recruitment, Retention and process needs to be focused on work that
Employment. ends in a common vision or ‘mission
o Marketing & Public Relations. statement’ that clarifies the aims, purpose
or goals of the organisation and is accept-
Review of ‘where we able to all. Work spent on defining the
mission will have the following benefits:
are now’ against the o It sets out a longer-term perspective.
key functions o It can create unity around a common
To start the process of business planning vision and identity.
or review you need to be very clear about
o It makes it clear for insiders and
your current situation and make an
outsiders what the organisation is
assessment of your strengths and weak -
about and what it is not about.
nesses and the opportunities and
threats that might face you. o It creates an overall sense of purpose
from which strategy and action can
There are many methods for doing this,
follow.
and at the end of each section of this

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Developing action Carry-on Planning!

plans When asked if they have a business plan,
many childcare providers will say yes.
With a review of current practice and a
When asked where it is, most will say that
vision for where you want to go, you can
it’s at the back of a filing cabinet or at the
start to develop action plans that set out a
bottom of a drawer!
strategic route to follow. These can then
be brought together in a concise and ‘What use is a Business Plan – we’ve
practical business plan. already got our funding sorted out?’
Throughout this Toolkit, you will find refer- A business plan is not just an extended
ences to elements of planning within each application form for funding – whether for
section. The common thread that runs a bank, investor or other funding body. A
through all of the action-plans is that they business plan needs to be a ‘living’ docu-
are SMART: ment that needs to be open on your desk
at all times for everyone to see, providing
Specific: Plans that set out in detail
support, guidance, reassurance and an
what is to be achieved.
early-warning-system for potential prob-
Measurable: To enable success or lems that might lie ahead.
failure of the action to be assessed.
Make your Business Plan work for you
Attainable: Not just a ‘wish list’ but
Making a business plan relevant to the
action plans that have a high chance of
everyday running of your business as well
success.
as being acceptable, understood and
Realistic: Achievable with the resources owned by all of those within your organi-
available or made available through sation, is important.
the plan.
Every business will need to adopt different
Timed: Set within a timeframe that will ways of working to achieve this, and need
enable measurement and review of the different levels of support from business
action to take place. advisors or local childcare development
workers. If you are involved in a recog-
“If you’re failing to plan, then nised quality assurance scheme, you will
you’re planning to fail.” be more aware of this and more likely to
continue the planning and review
Business Consultant Folklore
process.

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‘We had a Business Plan but no-one measurements to check progress, identify
even looked at it….’ problems early and enable action. In sec-
tion 14, Business Health Check, you will
Three reasons might contribute to this:
find information on ‘Key Performance
o The plan never really dealt with the Indicators’, or in other words, the mea-
realities of the business. It is about surements that can be made to assess
how you would like it to be in a per- quickly, and easily, whether or not your
fect world. business is operating effectively.
o The process of putting the plan By taking your business’ temperature reg-
together never engaged the people ularly, you can see if it is getting worse, or
who need to implement it. The people hopefully, getting better!
(staff, managers, parents, owners)
who drove it forward never created a
feeling of ownership throughout the
organisation.
o The plan itself is fine, but managers
have neither the time nor the skill to
manage the changes involved.
Making a business plan relevant to the
everyday running of your business as well
as being acceptable, understood and
owned by all of those within the organisa-
tion, is a key task.
Make sure you can measure success
Possibly the best test of strategic aims
and objectives identified in a business
plan is “can they be easily measured and
monitored?” Often, when something is
hard to measure, it reveals that the objec-
tive for it is not clear.
Business plans need milestones. Within
your plan you need to identify a number of

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Checklist
Question Yes No
Does everyone involved with your business understand the importance
of business planning?
Will everyone in your organisation be involved in the business planning
process?
Are you clear what the objectives of your business are?
Do you regularly review the strengths and weaknesses of your busi-
ness and the opportunities and threats facing it?
Do you know where you would like your business to be in 5 years
time?
Do you have a clear plan that sets out how you’re going to get there?
Do you measure the success of your plans?

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