T h e E a r l y Ye a r s a n d C h i l d c a r e S e r v i c e

A guide to effective planning

How to write aDevelopment Plan

In t roduct ion

Introduction

The content of a development plan needs to betailored to suit the purpose of the individualorganisation or project. It should not be a largedocument (we suggest 8 to 12 pages of A4 plusappendices) but it needs to be precise and clear.Every development plan should be reviewedregularly and updated as the organisation orproject develops.

A development plan provides:• A framework within which any management

structure can work

• A vital tool when preparing proposals forpotential funders

• A planning tool, which in turn provides:

- An opportunity to assess achievements

- Time to evaluate progress towards particular targets

- Increased efficiency and financial stability

What does a development plan look like?Generally it will include:

• A title page including a review date

• An index

• A brief summary or overview (usually found atthe start of the document, although it may bethe last piece that is written)

• Background

• Evidence of need and consultation

• Activities and services

• Resources

• Financial management and projections

• Appendices

Please Note - A development plan does not have to be written by one person!

It is better if it can be shared among a group of people with a range of different skills. The more it isshared - the more ownership of the plan the group has, and often the better the plan is.

It is your plan and you, as a group, need to write it, believe in it and…act on it!

Contents

Introduction

Section One: Summary

Section Two: Identify the need

Section Three: Activities and Services

Section Four: Resources

Section Five: Marketing Strategy

Section Six: Finance

Section Seven: Appendices

Helpful People

CD-ROM

Sect ion One: Summar y Sect ion Two: Ident i fy the need

Section Two : Identify the need

In order to be a success, there must be anidentified need for the services the new projectwill provide. You will need to identify your targetarea, explain why your have chosen this area anddemonstrate how your project ‘fits’ alongsideexisting provision in the area.

In this section you should includethe following information:• The reason why you want to start or develop

this project

• The area the project will benefit

• Who will benefit

• Who else in the area provides similar services, andhow your project will complement any existingprovision, include a summary of consultation

• Evidence of demand and lack of existing provision

• Why you are best placed to provide this project

A starting point for this sectioncould be:• Talking to other people in the local area

(including consultation with potential users)which may help you identify the need. Include asummary of any consultation you haveundertaken

• To carry out a survey of the local area. You candevise your own questionnaire or adapt a pro-forma. Attach any examples of questionnairesused as an appendix

• Oxfordshire Children’s Information Service can provide information on the number ofchildcare providers and analysis of need in aspecific area

• The Early Years and Childcare Service canprovide information on the sufficiency of earlyeducation places in Oxfordshire

Asking some simple questions may help. For example:

• Why are we doing this?

• Why do I think this is needed?

• Is there really a need for this service in this area?

• Am I the only person who thinks this is a good idea?

This is a short, punchy summary of the plan.

In this section you could includethe following information:• Your organisation’s purpose and aims – a

“mission statement”

• A brief description of what you plan to do, whatthe project involves and why it is important

• A brief overview of the specific groups ofpeople who are likely to benefit from theproject

• An outline of the most important features ofyour project and how it will impact on theorganisation’s present financial position

Starting point for this section:Consider the overall aims of the organisation. If the group is established and is working to aconstitution and/or has a “mission statement”then this may already be in place. If this is a newpiece of work it should be shared in order that allpossible stakeholders (committee, staff, parentsand children) can have their views heard, valued,discussed and developed.

Asking yourselves questions may help. For example:

• What do we hope to achieve?

• Where do we want to be in one, three, five years?

• What would we like the “club” to look like?

This will help you to define the aims of yourorganisation and project.

Section One : Summary

BackgroundThis does not need to be detailed, but whereprovision already exists it is needed to explain thehistory and the development of the organisation.

In this section you could includethe following information:• When and why the organisation was started

• Its legal status

• Other groups you work with

• The organisational structure

• The role of paid staff

• The role of volunteers

Starting point for this section:How is the group managed? Is it:

• Run by a volunteer management committee?

• Registered as a charity? If so, it will have acharity registration number

• A non-profit making business – such as acompany limited by guarantee?

• A private enterprise?

Section Three : Activities and Services Section Four : Resources

Section Four : Resources

In order to deliver the activities and services youare planning, you will need a variety of resourcessuch as staff, premises or equipment. In thissection you should identify the resources requiredto support your project.

In this section you should includethe following information:Management• How will the provision managed?

• What are the skills required?

• The organisational structure or family tree

Staff• How many staff will be needed?

• How are you going to find and retain staff?

• How much will you need to pay for staff?

• What skills will your staff need?

Training & Qualifications• What qualifications will be necessary

immediately / in the future?

• What training needs have been identified?

• How do we get information regarding training?

• How much will it cost and is there help withtraining costs?

Premises• Where will the project take place?

• Do you have premises available to buy, lease orrent? Or do you plan to build from new?

• Is the premises child friendly and is thereaccess to outdoor space?

• Will you need to adapt or refurbish thepremises at all?

• How much will the premises cost?

Equipment• What do I need?

• Who are the suppliers?

• How much will it cost?

A summary of the activities and services theorganisation provides, including the planneddevelopments.

In this section you could includethe following information:• Detailed information about the project,

including any new facilities it will create andany new services your organisation will be ableto provide as a result of these developments. Itis useful to have an overview of the projectand the timescales to be met

• How the development plan will be a workingdocument, with measurable outputs,timescales, management responsibilities andhow it will be costed

• How you plan to meet the National ChildcareStandards and work towards Quality Assurance

• Your plans to make the provision inclusive forall children

A starting point for this sectioncould beLook at how you would like the group to developover the next 3-4 years. Start to identify how thegroup needs to develop in order to meet thesegoals. Again, ask yourselves questions such as:

• How are we going to achieve our goal?

• What do we need to achieve our goal?

Section Three : Activities and Services

Section Five : Marketing Strategy Section Six : Finance

• The wages you plan to pay – what have youbased these on?

• An estimate of the oncosts for each post

• Running costs, how have you estimated these?Is it based on existing evidence or the researchyou have undertaken?

Funding strategy. Through the forecasts, budgets and cash flowforecast you should be able to identify certaindetails:

• Who you will approach for funding, what forand an estimate of the amount you will applyfor, the closing date for the application and thedate when decisions will be made?

• Identify charitable trusts, grants, localbusinesses and banks that you could apply tofor help

• The funding strategy will identify the fundingsources and future development

• This may be an appendix

Budgets and CashflowsBudgets – Estimating what Expenditureand Income will be At first this may appear to be a daunting task butbroken down into stages budgeting should not beparticularly complicated or difficult.

This will be one of the last parts of thedevelopment plan to be finalised and the figureswill result from the other parts of the planning e.g.services/activities being provided, cost of staff andpremises, meeting legal requirements etc.

Budgeting is common sense rather than crystalball gazing. In fact you already probably carry out

some form of budgeting for running your homeand could make a list of expected householdexpenses, say, for the next year.

The budgets for your provision should be a similarexercise. By using last year’s actual figures, and/orgetting together with other group members, itshould be possible to note down all foreseeableexpenses. In addition helpful guidance is available(see Helpful People section), which new/plannedprovision may find particularly useful.

The next step is to put a cost against each item.Where possible obtain a known price e.g. a salary orrent is agreed or a quote for insurance obtained, asthis will make your budget more robust. In somecases an estimate is required but it is usually easy tomake a reasonable guesstimate e.g. utilities bill willrise at the current level of inflation, or activity costswill be £x per child per day.

It is also recommended that you build in acontingency each year to cover unexpectedexpenses.

When planning for the longer term you will bewanting to ensure the continuation of your provisionand should aim to build up a reasonable surplus tocover future unforeseen circumstances. 3 monthsrunning costs and sufficient to cover redundancyliabilities could be considered a reasonable level ofsurplus to build up over a few years.

Once it has been established what is needed tospend to run your group, you will need toconsider the other side of the budget – where isthe money going to come from?

As for expenses note down all sources of incomeand then estimate what will come in this year.This is a good time to consider opportunities for

This should provide details of the total fundingrequirement for your organisation and project.

In this section you should includethe following information:• A projected spend and cash flow forecast

(usually attached as an appendix)

• Possible sources of funding available to you

• How you plan to make the new placessustainable in the future, especially after any“start up” funding has ended

Starting points for this section:• Ensure that the project you are setting up is

financially viable and robust. A financialforecast, projected spend and cash flowforecast will enable you to predict any surplusor deficit in the budget, and this will enableyou to plan for your financial viability

• Record the assumptions you have made indrawing up your financial plan

• Plan for future funding requirements. Theseshould be reflected in the projections

• One of the highest costs for any project isstaffing costs. The costs of employing staffneed to reflect the salary levels for theexpertise and experience you require

• Remember to include any professional fees youmay incur

• Details on record keeping, control on finances(who will sign cheques?) and how the budgetwill be monitored

Assumptions(The assumptions you have used to support yourfinancial plans are important and should be stated)

This could include:

• The fee rate you plan to charge – what haveyou based this on?

• The occupancy level you have used to estimateyour fee income. It is not going to be fullimmediately

Section Six : Finance

Section Five : Marketing Strategy

You will need to outline your plans for promotingyour provision.

In this section you could includethe following information:• How and when you will advertise and

market your project

• Identify your target audience and determinewhere you need to advertise

• How are you going to promote Working Tax Credit?

• How much will your marketing activities cost?

• Who will be responsible for organisingmarketing?

Sect ion S ix : Finance Sect ion S ix : Finance

Cashflow – Estimating whenExpenditure and Income will happenHaving prepared your budget for income andexpenditure you now need to draw up a cashflow,which is a document showing when money will bereceived and when it will be paid out. It is essentialto do this in conjunction with a budget, as you needto ensure that you have money to meet expenses,as they fall due.

It therefore follows that a cashflow needs to bedrawn up well in advance, so that any problems can

be identified early. If appropriate this would enabletime for a fundraising strategy to be put into placethat will ensure money is available at the right time.

Preparing a cashflow is very straightforward,although it may take some time. Take all areas ofexpenditure listed in your budget and work out inwhich month they will need to be paid. Someexpenses may be paid evenly through the year;others may be paid quarterly or even by onepayment. There may also be seasonal variations totake into account such as summer/winter, andholidays in the summer or at Christmas.

Here is an example based upon the budget on the previous page:-

Cashflow Forecast For Next 6 Months

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 TotalIncomeFees 1,000 1,000 1,000 1,000 1,000 1,000 6,000Grants 2,000 2,000Total Income 3,000 1,000 1,000 1,000 1,000 1,000 8,000

ExpenditureWages 700 700 700 700 700 700 4,200Rent 1,200 1,200 2,400Insurance 500 500Consumables 100 100 100 100 100 100 600Total Expenditure 800 2,500 800 800 2,000 800 7,700

Net Cashflow 2,200 -1,500 200 200 -1,000 200 300Bank B/f NIL 2,200 700 900 1,100 100Bank c/f 2,200 700 900 1,100 100 300

Income £Fees 6,000Grants 2,000

Total Income 8,000

ExpenditureWages 4,200Rent 2,400Insurance 500Consumables 600

Total Expenditure 7,700

Excess of income over expenditure £300

increased income, e.g. annual fee increase ormore people using your group, as well as anythreats to your income such as changes to schoolintakes or grants that may not be repeated.

Expenditure is usually easier to predict thanincome but it is essential that both are watchedcarefully. Time spent in preparing budgets properly

Once you have done this you can plot each expenseon a sheet of a paper or a computer spreadsheet,against the relevant month(s). Similarly plot yourexpected income. By deducting expenses fromincome each month you establish cash inflow oroutflow for each month.

By taking into account any opening cash reservesand the cashflow for the month in a final column

you can establish your group’s funding position inadvance.

If there is any doubt on timing it is prudent to takean earliest date for expenditure and the latest datefor income.

is vital and getting it right will save unexpectedproblems in the future.

Always note down the assumptions made, so thatyou have a record of how you arrived at thefigures and can show funders that you haveproperly considered the financial aspects ofrunning your group.

Here is an example of a simple budget:-

Sect ion S ix : Finance Sect ion Seven: Append ices

Section Seven : Appendices

Appendices provide you with the opportunity toprovide additional information on your project.

Appendices will include:– SWOT analysis

– Action Plan and Risk Assessment

– Cashflow forecast

– Budget Profit and Loss

Appendices may also include:– Fundraising Strategy

– A copy of questionnaires used for anyconsultation process.

– Staff job descriptions for any new posts.

– A list of policies you have or will be adopting.

SWOT AnalysisIt is important that any organisation can identifytheir abilities and possible weaknesses. The mostusual method of assessing these in anorganisation is through SWOT analysis. A SWOTanalysis examines the Strengths and Weaknesseswithin the organisation and the Opportunities andThreats it faces. Through this type of analysisissues that initially are seen as a threat to anorganisation can possibly be turned intoopportunities (your development worker can helpwith this process).

Action Plan and Risk AssessmentYou will need to formulate an action plan ortimetable of development that will enable you todetermine how the project is progressing. You willalso need to assess any changes in progressthrough risk assessment.

In this section you could includethe following information:• A breakdown of the whole project into smaller

components or tasks. Each of these will bepart of the process of developing the projectas a whole

• Each task should have a timescale with oneperson taking responsibility for each task. If thedifferent tasks can be shared around a numberof people the responsibility for the wholeproject will not fall on one person

• Details of the management structure and skills audit

Starting points for this section:• Discussions with professionals e.g.

development workers, architects, planners etc

• Discussion within the planning “team” andsharing out of tasks

This Action Plan can be attached as an Appendix.

Appendices also provide you with the opportunityto give further information regarding the work ofthe group.

And finally...Please include a review date when the progress ofyour plans will be reviewed and revised to meetthe needs of your organisation.

However in order to demonstrate how a seeminglyrosy picture (with income exceeding expenditure)can be misleading here is the same budget asbefore but with the cashflow showing differenttimings:-

Cashflow Forecast For Next 6 Months

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 TotalIncomeFees 1,000 1,000 1,000 1,000 1,000 1,000 6,000Grants 1,000 500 500 2,000Total Income 1,000 2,000 1,500 1,000 1,500 1,000 8,000

ExpenditureWages 700 700 700 700 700 700 4,200Rent 1,200 0 1,200 2,400Insurance 500 500Consumables 100 100 100 100 100 100 600Total Expenditure 2000 1,300 800 2000 800 800 7,700

Net Cashflow -1000 700 700 -1,000 700 200 300Bank B/f NIL -1,000 -300 400 -600 100Bank c/f -1000 -300 400 -600 100 300

This reveals that for the first 2 months and againin month 4 expenditure is exceeding income.Without any action being taking the group wouldnot be able to pay all its bills.

By preparing a budget and cashflow well inadvance the group will be able to plan its

fundraising strategy in ways that will ensuremoney is available for the expensive months. Ifyou plan for your group almost a year ahead interms of budgets and cashflow then this shouldpossible.

(David Mendham, Business and Finance SupportOfficer, Early Years and Childcare Service)

Anonymous

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Content provided by:

Jo Roberts Childcare Development TeamEarly Years and Childcare Service01235 549343

With support and contributions from others in the Childcare Development Team.

November 2003Updated Feb 2004.Creative & Production by Pear Tree Design Ltd (01865 792536)