How To Manage Costs During The Cost Of Living Crisis

There’s no escaping the problems that the ongoing cost of living crisis is bringing to all aspects of our lives. You are probably watching with horror as your business bills increase, but your income stays the same.

Though we cannot stop the inevitable increases, there are things you can do to reduce the impact of these cost rises on your business. We’ve put together a few ideas and tips on how to save on costs and maximise your investments.

Staff

Staff is generally the biggest cost of any business, and for some businesses, cutting staff can feel like the only option to claw back the money. But in a nursery setting where reducing your workforce isn’t possible due to required ratios, what can you do?

Keep your team in the loop. Any staff who have their own bills to deal with know that things are tough. They will also have their own worries about rising costs and job security. Reassurance from you means you create a trusting relationship that will help when you need them on board for these next ideas…

Delegate additional tasks to your team. Can they take on the end-of-day cleaning? Help prep food for the week? Do your social media posts? You may find that some staff members have previous experience or hidden talents you can put to use. By using existing staff, you reduce the cost of outsourcing or hiring someone else. Make sure they’re happy with their new duties, though, and that they know you value their extra help.

Hire Apprentices. Another great way to increase staff numbers without too great a cost is to recruit and train apprentices. As long as they meet requirements, they can be part of your ratios, so if you have the space, you can increase your intake.

Energy

Energy costs are a significant outlay for everyone these days, and as a nursery setting, you have the lights, heating, washing, cooking, and tech all running all day. You can’t start asking parents to bring extra layers for their children, so how can you bring down those utility bills? 

Shop around for the best suppliers. If you start doing your research and using comparison companies, such as Utilitrack to take the time to do the hard work, you will find that you can make big savings. It may take a couple of hours of your time initially, but it will be worth it for the savings that can be made. Often when an initial contract ends, the energy supplier will put you on a standard tariff which might be more expensive, so make sure you stay on top of it and that you’re on the best rate. If you need an introduction to our contact to Utilitrack then just contact us for details. 

In the winter months, using blinds or insulating window film to improve the thermal efficiency of your building can help bring down heating costs. Even dropping your thermostat by 1 degree makes a decent saving. Blinds are also great for keeping the heat out in the hot summer months, so well worth the initial investment. 

To keep lighting costs down, ensure that all your bulbs are energy-efficient LED bulbs. Again, a little research online can give you the answers to which are the best to use for your nursery setting. You won’t notice a huge difference in your energy bills at first, but every little counts, and over a year, you could be making significant savings. Plus, they’re better for the environment, so it’s a win-win.

Resources

Your resource budget is probably the initial place you will try to cut costs. But what can you cut without compromising the quality of what you offer your children?

Food is one area where it’s possible to make savings without lessening what’s on the menu. You can buy food in bulk where you can. Something as simple as switching from single yoghurt pots to buying a catering-sized one and dishing out scoops in bowls can help save costs. Growing your own veggies, herbs, and fruit is another great way to save on food costs. The initial investment can reap rewards for years to come.

There are also ways to make savings on arts and crafts resources. Junk modelling uses old recyclable materials to make fun things. Rather than buying paper and crafty things in, ask parents to bring in their old cereal boxes, jars and egg boxes and use these instead. You can also take the opportunity to teach the children about the pros of recycling.

Know Your Numbers

You’re about to become besties with your spreadsheet. You need to track your costs and watch them like a hawk.

Separating your fixed costs from your variable costs can help you form a plan on how to make savings. Fixed costs include things like rent and professional fees, which do not change no matter what your intake is. Although do you have any out of date contracts for telephones, copiers or other items, that could be renewed for less – or that aren’t even needed any more? It could be time to sort these out, Variable costs are those you can make  savings on, such as staff costs, food and other direct expenses. These are also the costs that vary depending on how many children you have enrolled at your nursery.

You should be forming a plan to reduce variable costs by a certain percentage. If numbers really aren’t your thing, an accountant can help you understand.

Ideas To Increase Income

Managing costs is not only about cutting costs; it can also be about what you can do to maximise the return from the costs you have.

So, here are a few ideas for ways you could increase your income:

• Additional charges for funded only children is often not implemented effectively enough. Consider how you can increase your income to cover all your outgoings here.
• Hire your setting out for birthday parties at the weekend.
• Holiday clubs – working parents need options during the school holidays, and you have all the facilities already.
• Sell your meals – busy parents are always looking for quick but nutritious food for tea time. Providing meals for them to take away could be a great option.

Every Little Counts

So there you have it. Just a few ways you can make managing the cost of living crisis a little easier on the purse strings. Some of these may seem too minor to worry about, but the accumulation of them all can make a significant difference to whether you can keep your business afloat.

They’re also all great moves to make even without a cost of living crisis, so make a start ASAP!

For more advice on navigating the cost of living crisis, get in touch.