Advice With Regards To Opening Up A Pre-school.

[Serena]

Am thinking of opening up a pre-school as from September 2008. Presently l am a childminder working with multiple assistants and two other co-childminders. There has been a lot of requests for funded places which we are unable to offer as we are not accredited. Trying to find information on the internet without any success. The most specific question is the payment of my staff. What happens during non-term time? Presumably, the funding is only for term time. What are the pitfalls?

[Helen]

Hi Serena,

My pre-school is only open term-time, so I work out my staff salaries like this:

hours per week X hourly rate X 39 weeks (I know it's usually 38 and a couple of days, but it's easier to round it up). I add in 4 weeks of holiday pay, extra allowances for curriculum responsibilities, then divide the whole lot by twelve to get a monthly salary.

 

But, I'm guessing that you will be working outside term-time, too? My only suggestion is that you have to alter your rates so that parents have to make up for the loss of the nursery grant. Or, to increase your rates generally so that you can cover your costs throughout the holidays. However, I'm not a childminder, so I'm sure much more knowledgeable people will be here to give you better suggestions.

[Serena]

Hi Serena,

My pre-school is only open term-time, so I work out my staff salaries like this:

hours per week X hourly rate X 39 weeks (I know it's usually 38 and a couple of days, but it's easier to round it up). I add in 4 weeks of holiday pay, extra allowances for curriculum responsibilities, then divide the whole lot by twelve to get a monthly salary.

 

But, I'm guessing that you will be working outside term-time, too? My only suggestion is that you have to alter your rates so that parents have to make up for the loss of the nursery grant. Or, to increase your rates generally so that you can cover your costs throughout the holidays. However, I'm not a childminder, so I'm sure much more knowledgeable people will be here to give you better suggestions.

Thank you Helen! My understanding is that you will still pay monthly salaries to the staff. Is it difficult to keep afloat. I suppose l should be doing my prejected earnings.

[Guest]

I work in a term-time only preschool and we get paid half termly. During school holidays I do not get paid.

 

Sally

[Shiny]

When calculating pay bear in mind that holiday pay goes up to 5.2 weeks from April 2009. There is some really useful information on the PSLA web site

 

http://www.pre-school.org.uk/resources/

 

Sorry I haven't got time to post too much now will pop back later!!

[HappyMaz]

I add in 4 weeks of holiday pay

Sorry to be pedantic but is that four weeks at their usual number of hours, Helen? I know that we've talked about the increase in holidays a lot on here, but you would need to check that the amount of holiday pay is equal to 4.8 times the average number of hours worked per week over the whole year.

 

Its not so much of an issue at present, but given that the statutory holiday pay is going up to almost six weeks, anyone starting a group from scratch would do well to think about this now before setting up employment contracts etc to make sure they don't take on a bigger liability than they think!

 

Here's the link to the Department for Business, Enterprise and Regulatory Reform website which gives an FAQ section about what it all means if anyone needs to check!

 

Maz

Edited April 12, 2008 by HappyMaz

[Andreamay]

mustangsally - you are entitiled to 4 weeks hol surely?

[Guest]

mustangsally - you are entitiled to 4 weeks hol surely?

I don't know how it works - I only work part time (14 hrs a week) so I should check out the hol pay entitlement. Will ask my supervisor next week. I'm starting to get a bit worried now!

 

Sally

[Shiny]

I don't know how it works - I only work part time (14 hrs a week) so I should check out the hol pay entitlement. Will ask my supervisor next week. I'm starting to get a bit worried now!

 

Sally

I used to get holiday pay and worked 12.5 hours a week when I first started at the preschool!! You are still entitled to holiday pay. Some info here

 

http://www.direct.gov.uk/en/Employment/Emp...ons/DG_10027738

[Serena]

I am actually intending to start up a pre-school from scratch at another premise. Has anyone got any sample of a projected income. It is very different from setting up a day nursery where there is an abundance of information available. l am intending to rent a community hall but am so unsure of the expenses involved. I dont really think there is any kind of profit invloved unless l am missing the point.

[fizzy]

Wages are the highest expenditure, then rent with our pre school.

 

when i took over my pre school it was quite easy to forecast as i had the previous years books from the previous owner.

 

Do you have to pay utility bills or is it in with your rent.

All our cleaning equipment/materials/toilet rolls paper towels ect and utility are in with the rent.

 

our LEA have advisers who will come out to you and help with these kind of things. They might be worth a ring. i did nt know of these services when i first started, had i have done i would have certainly have used them.

[Guest]

I used to get holiday pay and worked 12.5 hours a week when I first started at the preschool!! You are still entitled to holiday pay. Some info here

 

http://www.direct.gov.uk/en/Employment/Emp...ons/DG_10027738

Thanks for that Shiny. Some light reading for later I think.

 

Sally

[Inge]

Also need to check that it is needed , a check on other settings close by, how full are they, how many children do they have, you may find that while parents are asking for funded child minded places , a new pre-school may not be needed in the area, and could mean that others surviving end up having to close or be in hardship because of it. (One of our local childminders set up a home pre-school and gets funding but I have no clue on how it is set up or run, just know she is registered as a pre-school but runs it from home with help of a 1 other person)

 

Items to ask about as said what is included in rent. Ours does not include cleaning materials, equipment, paper goods only utilities.

Phone costs.. is there a phone you can use or do you need your own

 

wages are the highest costs remember to include

holiday pay which everyone is entitled to even part time (we get apid for set weeks in a year 1 xmas 2 easter and 1.8 August)and your contribution to national insurance which can add a lot to the wage costs and is often forgotten.

You need to think about, materials such as paper, paint etc which are used in vast quantities in a pre-school or is it just ours?

Then there is the equipment costs, (tables, chairs, books, etc etc etc.) storage if in a hall, will it all fit into the space provided?

 

Not for the faint hearted setting up from scratch.. These are just a few of the things I can think of for now,

 

would definitely go to LEA and ask if they have a development worker who can help with your decision.

 

Inge

[HappyMaz]

Hi Serena

 

Your projected income needs to be a realistic figure based on your current numbers, your research of the childcare availability and demand in your area and therefore an idea of how you will increase numbers of children over time. The amount of Nursery Education Funding will be set by your LEA but it is up to you to decide what level to set your fees at. If you offer a three hour session rather than the funded 2.5 hour session, you need to decide what to charge for the extra half hour (remembering that you cannot charge any extra for the funded sessions, even if the LEA funding doesn't cover your costs). Some groups decide to charge more for under threes since they demand a higher adult:child ratio.

 

All these decisions need to be based on a subtle blend of your running costs, the need to remain competitive and some understanding of 'what the market will stand'. You want to cover costs, make some sort of profit, but you also need to have a service that families respect at a price they can afford.

 

As for expenses - if you have identified a community hall to rent, these expenses will be agreed as part of the negotiations - and as fizzy said, you need to check what is included. Once you know this information you will have a clearer idea - obviously you also need to organise insurance, Ofsted registration, advertising/marketing, furniture, resources etc.

 

When you say you are a childminder working with multiple assistants, does this mean you currently pay them a salary? If so then you will already know what your costs are - including employer's NI contributions etc. This should make it fairly easy to work out your salary bill, which is likely to be your biggest ongoing expense.

 

As for the profit: well no-one goes into this business to get rich However, some preliminary calculations should enable you to identify quite quickly whether this is a worthwhile venture for you: and asking yourself some basic questions will help the decision making process.

 

In your original post you mentioned not being able to access funding because you aren't accredited. Does this mean you are likely to lose children because their parents will look for a setting where they can access their free entitlement and is this the major reason for setting up a new group? Would undertaking accreditation solve this problem and make your childminding business more profitable without the need to move to new premises?

 

Its a lot to think about, I know - it was difficult enough for me when I was offered the chance to buy my pre-school. However starting from scratch is a much more complicated venture. Good luck - let us know what you decide!

 

Maz

[Serena]

Thanks all for all the useful info. I use to be registered as a Day Nursery from 1990 to 1993. I then de-registered to a childminder and my staff became multiple assistants. This has been very economical for me as my bills remain domestic as l operate from home. I am now in the process of registering two of my staff to work with me as co-childminders. They are having their interviews next Tuesday. I will be going away for a few months. I am okay with my numbers. Children who leave to attend pre-school are replaced. Unfortunately there are only two pre-schools in my catchment area. These are always full. I dont know whether the day Nurseries in the area are not taking children just for the 2 1/2 sessions, but all the enquires l have are from non-working people for these places. l believe that there is some level of dis-satisfaction with one of the pre-schools. I am already compiling a waiting list of children but at the same time advising parents that l am not sure. Does the government still pay £7.50 per session? I will ring up the pre-school alliance and see whether they can shed some light. With regards to accreditation. Now thats another story. Contacted the network co-ordinator last May. Came out on a visit. Horrible woman. At that time l was registered as a childminder with multiple assistants and she commented how unfair it is to the other childminders as l am registered for 16 children. The conclusion of it was that l had been unable to go on her network because l wasnt considered a childminder but a daycare provider.

[HappyMaz]

Where abouts are you, Serena? Mind you, maybe you won't want to say where you are given what you said about that 'horrible woman'. I must admit my eyebrow raised a few inches when I read that you weren't allowed to join "her network".

 

Your local authority will be able to tell you what the current rate of funding is. And the Pre-school Learning Alliance should be a great source of information, too! They've probably got a good publication on the subject

 

Maz

[Serena]

Oh! No! Maz, l dont mind saying where l am. I am based in East Staffordshire.

[HappyMaz]

Oh! No! Maz, l dont mind saying where l am. I am based in East Staffordshire.

I wonder if there are any forum members in your area who might be able to help out with some Borough-specific information then?

 

Maz

[anju]

hello everyone on here.

 

serena, our nursery funding rate is now £8.85 per session. the others are right, staffing is the most expensive bit. i always have an excel spreadsheet on the go to put in figures with current numbers, staff rates of pay, hours, an amount for resources every week, snack costs, insurance, book keeping fees, ofsted registration etc. i update it frequently and it seems to ensure that we stay afloat - i am in a small sessional pre-school. we have a mobile phone on a pay as you go tariff although i use my own phone for everything official - for ringing parents i use the pre-school one to protect my privacy. when money is tight i have bought things like snacks myself and all the staff contribute unwanted puzzles and other reources from time to time.

 

are you planning on opening mornings only?

 

anju

[Guest]

Welcome Anju,

[HappyMaz]

Welcome to the forum, anju!

 

Maz

[Serena]

Welcome and thanks for your contribution Anju. l am planning on opening both sessions. i have a choice between the community hall or th house nextdoor. l want to get more information before l ask these two people. But on reflection l think the house next door might be a better option. What sort of rent would be a resonable figure?

[HappyMaz]

What sort of rent would be a resonable figure?

How long is a piece of string?

 

A lot depends on the rental market in your area, plus other factors such as whether you will have sole occupancy? Will you have to pack away each day? Will heating, lighting etc be included in the rent? Will you be responsible for cleaning/maintenance etc?

 

You might not have much scope for negotation - they may need to charge a certain hourly/weekly/monthly rent to cover their own costs. However, if they have a published 'price list' for one-off hirers they should be prepared to make a reduction to reflect your regular usage.

 

Ultimately, what is reasonable depends largely on whether it will support your business and enable you to build a viable group. Until you start talking to the landlords you won't know...

 

Maz

[Serena]

The property next door is a three storeyed accomodation and had applied for planning permission for a day nursery when l applied for mine. Spoke to the owner and he is asking £1000 per month with all bills inclusive. Does that seem too much? He is giving me sole use of it.

[HappyMaz]

The property next door is a three storeyed accomodation and had applied for planning permission for a day nursery when l applied for mine. Spoke to the owner and he is asking £1000 per month with all bills inclusive. Does that seem too much? He is giving me sole use of it.

Well I couldn't afford it but it does depend on your projected earnings/expenses. I'd advise that you do some sums and see what your bottom line says. Sole use would be very very useful - oh the luxury of not having to pack everything away into a small cupboard!

 

Maz

[Shiny]

Would you be open term time only? If so, that is a lot to sustain over the weeks off. Funding is only for 38 weeks of the year and I am assuming you would have to pay the rent on the house all year. If you are doing term time only (and paying all year) your rent will be £315.79 per week.

[Serena]

There are also two large attic rooms and he is okay about me sub-letting them. lt is something that l wouldnt go in with both feet. I could charge £75 per room . But really have to do my sums carefully. It is a really large 6 bed-roomed victorian house. He is quite reluctant to sell.

 

But we have a community centre that l beleive surestart uses and sublets. My friend who wanted to start up a pre-school there was told that the charges would be £300 per week.

[Helen]

I'd be very careful about subletting rooms in a building that houses a nursery. You'd obviously have to have checks on those tenants, and strict regulatuons that they bring nobody else into the house, friends, etc. It would be a worry, I think.

 

Maz,

I give my staff 4 weeks holiday pay but they are all part time, and pro-rata, I'm still over the minimum. Thanks for reminding me that it goes up next year, though. Something else to work out!

[Serena]

I know what you mean about sub-letting. It would have been to my staff members. I do think though that i am inviting trouble for myself by letting next door. Have made enquiries this morning about another property that has come up for sale a few door away and this one has parking. so i am writing a letter to the council about the change of use and ask for a site visit.

[Helen]

The parking issue is so important, isn't it? When we opened almost ten years ago, there was unlimited free parking on our road and surrounding roads. But over the years, it has become more and more difficult for parents and carers to find anywhere to park when they drop off and pick up. We now have yellow lines painted everywhere apart from a few spaces that are filled up at 7.30am by workers elsewhere in the town, and they don't move until 5pm. Our parents have to leave their cars on yellow lines, across driveways,etc and run to the nursery doors, thrust their child through, and shout goodbye as they run back before the traffic wardens appear! Fortunately over half our children walk to nursery, but that still leaves around 8 - 10 cars arriving each day.