Accounting Lesson Is One for the Books
Gale Walker lost her job in 1985 after she took a leave of absence to care for her dying mother. With two young children, Walker resorted to welfare for five years until a social worker encouraged her to follow her dream of opening a child-care business. Last month, Walker’s day-care center expanded into a 7,000-square-foot facility where she is licensed to care for 141 children and provide jobs for 50 employees. Keeping meticulous financial records was particularly important in allowing Walker to obtain a $200,000 bank loan to expand her company. She was interviewed by freelance writer Karen E. Klein.
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When I first started out, I would get so engrossed in the everyday running of the business that I just kept putting all the details aside. But I found out eventually that those details were really important, especially when you have goals for your company and you’re trying to grow. Then you realize how crucial it is to have meticulously accurate records.
The problem was, I wasn’t able to delegate anything. I thought I had to do everything myself, so I did all the financial records alone for the first couple of years. Before I knew it, I had papers all over my office. Invoices here, there and everywhere, stuffed in shoe boxes and drawers.
When I moved from my first location, where I was caring for a few kids, I expanded my license to a dozen children and I hired two employees. That is when I realized I was in a place where the business could really take off, and I needed to learn how to delegate the important jobs. It’s still a hard process, reminding myself I can’t do it all.
Finally, I went to the Small Business Development Center and got some technical assistance in straightening things out and getting organized. Because I’d been doing it myself for so long, it took a little over a month to get a handle on it. Then we got all the records computerized, which was a big help.
As you cultivate business alliances or expand or begin dealing with financial institutions, you find that they want to see at least three years’ worth of financial records. By the time I applied for my loan, I had gotten organized and hired a bookkeeper. If you can’t afford that, then you should get a mentor or take a class and learn how to do the books the right way yourself. If you’re not careful with all the financial data, you could lose your business very easily.
Keep all your checks, your invoices, your books--don’t throw anything away, because you’ll need to have whatever they ask you for. The more prepared you are and the more accurate your paperwork is, the easier the loan process will be.
I have had 173 inquiries about the new facility. Currently, I have 35 children enrolled on various schedules between 5 a.m. and 1 a.m. The center is customized to meet the needs of parents who are entering the work force off of welfare, because they are most likely to get the entry-level jobs with night and weekend hours. When they go back to work, many of them also want to go to school at night or on the weekends, so we help out there also. We do after-school care, and we work with children from ages 1 to 12, so an entire family can be cared for at our site.
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If your business can provide a lesson to other entrepreneurs, contact Karen E. Klein at the Los Angeles Times, 1333 S. Mayflower Ave., Suite 100, Monrovia 91016 or send e-mail to Kklein6349@aol.com. Include your name, address and telephone number.
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AT A GLANCE
Company: Children of the Rainbow Inc.
Owner: Gale Walker
Nature of business: Child-care center
Location: 3044 L St., San Diego 92102
Web site: https://www.childrenoftherainbow.usrc.net
Founded: 1991
Employees: 5
Annual revenue: $140,000
