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
profit, then your business will need to be
planned in a way that enables you to
make a surplus that can be drawn from
the business as profit for yourself, your
partners or shareholders.
If your childcare business is not run for-
profit (as for example, a voluntary organi-
sation), you still need to make a surplus
from your operations, but the surplus
needs to be reinvested in the organisation
to provide future security and investment.
In many respects, whether you make a
profit from the business is not a consider-
ation (see Section 2), but whether you
survive or not is important to you, the par-
ents and carers who rely on your service
and the children who benefit from high
quality care.
Business planning, though, is not only about
finance (although this is very important),
but about business structures, market
research, planning, funding, legality,
staffing, marketing and having in place a
“If you don’t know where you are going you are sure to end up somewhere else.”
1.1
range of relevant and up-to-date policies
and procedures. Above all, it’s about being
able to step back from the day-to-day
organisation and start thinking strategically.
The principals of planning for success are
simple:
1 You need to make an assessment of
where you are against a small num-
ber of key business areas.
2 From an assessment of where you
are currently, you need to decide
where you are going and set objec-
tives for getting there.
3 An Action Plan needs to be developed
to set out the route to achieving your
objectives through the business
planning process.
4 Once you’ve started the process,
you shouldn’t stop! Once you have a
plan, you need to spend time imple-
menting it, reviewing it, and then,
based on your successes and failures,
start the process again.
Mark Twain
 1
Good Practice
Why think about business plans?
There are many reasons why you would
not wish to draw up a business plan or
think strategically:
o Just keeping going on a day-to-day
basis is often enough of a struggle –
particularly with a management
comprising of volunteers.
o The language of business planning
is often off-putting.
o The word ‘business’ might be objec-
tionable to some people within your
organisation.
o It is difficult to plan in a period of
constant change.
o The goal posts keep moving!
o The organisation has a lack of skills
or resources to develop and imple-
ment a business plan.
Luckily, there are several better reasons
for you to think about Business Planning:
o A business plan is usually required
before a lender or funder will consider
an application for money to start-up
or develop your childcare business.
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T H E I M P O R TA N C E
OF PLANNING
o A comprehensive business plan
should provide much of the evi-
dence required for inspection by
Ofsted and be the cornerstone of
achieving a Quality Assurance mark.
o The constant rate of change and
uncertainty in the childcare sector
means that no childcare organisa-
tion can afford to stand still.
o Changes in legislation, new funding,
short-term priorities and new ways
of working mean that you can easily
be reactive to external events rather
than taking a grip on where they are
going and on what they are doing.
o A business plan can be a ‘living’
document that provides a service to
your organisation. Having a good
business plan is almost like having
an extra member of staff.
o All childcare organisations are going
somewhere. The future could be
about getting bigger or getting small-
er; doing more or doing less; doing
the same things or doing new things.
 1
Practical Tips and Hints
The key business
functions that need
to be managed
There are a number of key business func-
tions that need to be managed for your
organisation to become more strategic
and therefore more successful.
These are, in general, the areas covered
in the rest of this Toolkit:
o Management & Organisational
Structures.
o Researching and understanding
needs.
o Financial Planning.
o Funding & Fund-Raising.
o Awareness of Legal Issues and
Responsibilities.
o Financial Management.
o Recruitment, Retention and
Employment.
o Marketing & Public Relations.
Review of ‘where we
are now’ against the
key functions
To start the process of business planning
or review you need to be very clear about
your current situation and make an
assessment of your strengths and weak -
nesses and the opportunities and
threats that might face you.
There are many methods for doing this,
and at the end of each section of this
1.3
T H E I M P O R TA N C E
OF PLANNING
Toolkit you will find a Checklist with some
key questions to ask. Alternatively, all of
the approved childcare Quality Assurance
schemes provide a foundation of gath-
ered evidence from which an assessment
of your current practice can also be made
(see Quality Assurance in section 11).
Setting the
Objectives – ‘where
we want to go’ as a
business
Once a complete assessment of your cur -
rent situation has been made, the next
step is to look at where you are heading
(or should be heading!).
This can be difficult, as in many groups,
not all those involved in the organisation
(managers, staff, parents and children)
will have the same sense of purpose or
vision. Part of the business planning
process needs to be focused on work that
ends in a common vision or ‘mission
statement’ that clarifies the aims, purpose
or goals of the organisation and is accept-
able to all. Work spent on defining the
mission will have the following benefits:
o It sets out a longer-term perspective.
o It can create unity around a common
vision and identity.
o It makes it clear for insiders and
outsiders what the organisation is
about and what it is not about.
o It creates an overall sense of purpose
from which strategy and action can
follow.
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Developing action
plans
With a review of current practice and a
vision for where you want to go, you can
start to develop action plans that set out a
strategic route to follow. These can then
be brought together in a concise and
practical business plan.
Throughout this Toolkit, you will find refer-
ences to elements of planning within each
section. The common thread that runs
through all of the action-plans is that they
are SMART:
Specific: Plans that set out in detail
what is to be achieved.
Measurable: To enable success or
failure of the action to be assessed.
Attainable: Not just a ‘wish list’ but
action plans that have a high chance of
success.
Realistic: Achievable with the resources
available or made available through
the plan.
Timed: Set within a timeframe that will
enable measurement and review of the
action to take place.
“If you’re failing to plan, then
you’re planning to fail.”
Business Consultant Folklore
1.4
OF PLANNING
Carry-on Planning!
When asked if they have a business plan,
many childcare providers will say yes.
When asked where it is, most will say that
it’s at the back of a filing cabinet or at the
bottom of a drawer!
‘What use is a Business Plan – we’ve
already got our funding sorted out?’
A business plan is not just an extended
application form for funding – whether for
a bank, investor or other funding body. A
business plan needs to be a ‘living’ docu-
ment that needs to be open on your desk
at all times for everyone to see, providing
support, guidance, reassurance and an
early-warning-system for potential prob-
lems that might lie ahead.
Make your Business Plan work for you
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 your organi-
sation, is important.
Every business will need to adopt different
ways of working to achieve this, and need
different levels of support from business
advisors or local childcare development
workers. If you are involved in a recog-
nised quality assurance scheme, you will
be more aware of this and more likely to
continue the planning and review
process.
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OF PLANNING

‘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

1.5
 1 T H E I M P O R TA N C E
OF PLANNING

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?

1.6