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From Charity To Business


marley
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Hi all

Well had my parents round tonight and had a bit of a telling off (as parents do when they are concerned about their children!!)...its generally about the amountof work and effort I am putting ns as chair at school club as volunteer. I was talking about how much current manager is on £8.50 per hour compared to my £6.25 as pre-school assistant, how I am doing so much to support her etc etc. How I am trying to pass things down to her but there are issues cropping up all the time (had another call today about windows being left open at school over weekend due to club staff).

They then said what if was to step down as chair what would happen? Would we get anyone? Last AGM only one new parent, next year have already been told that 2 of my main supporters will not be renewing. In fact 12 months ago when I was a general member of commitee the then chair went to head teacher and said that parents coiuld not carry on running club as it was just too much work dealing with staff recruitment etc. He said he would think about it..but never got back to us and we manged to plod along with hard work from 2;/3 of us on committee..... and as most of you are aware I have already dealt with so much in the last month. Hubby is getting peed off with amount of work/time it is taking me ie phone calls on holiday, weekend even.

 

Then today he said why not consider taking it over and running it privately and make it my main job/business. To be honest I wouldnt know where to start! Its a full club most days (apart from holiday c.ub which can be quiet), Its the only childcare after school available in a rural village and has been making a steady profit for a few years now.

 

Do you think its worth considering? How would you proceed next?? Help!!! What do I need to look into????

 

Thanks for any advice/info

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Not a simple process, but briefly you would have to look at your constitution and look at dissolution of the pre-school as a committee run setting. The assets would have to be valued and you would have to purchase these assets to run it as a private concern. You would have to have an extraordinary general meeting (with notice periods, quorum etc. according to your constitution) and dissolution could only occur if members vote in agreement. if you are memers of the Pre-school Learning Alliance they would be able to advise you on this, but it's not a simple (or cheap) process.

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Not had many replies to my query so must be a nightmare!!

Its an out of school club and we are not with the PLA. However dissolution is a similar process according to our constitution.

 

I was just wondering how do they go about valuing how much it is worth?

JUst wondered if anyone had done it?

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Hi who advises you now. There should be someone at your local county council that could help you with this. What a fantastic idea of hubby's seeing as you are doing most of the work anyway. Good luck Marley do let us know how you get on .

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I did reply but seems to have vanished in the ether...

 

Cannot remember who did it but we did have an independent valuer come in to value our goods once... came up as very little as once depreciation , age, and use was taken off a lot was just written off.. even the laptop we had they said was not worth anything because of age... so value of the goods may not be as much as expected.. perhaps someone in lea could help or citizens advice may have someone they could recommend..

 

our problem was the money in the bank account was quite substantial at the time and that would be 'lost' even after giving everyone their redundancy they would be due it was too big an amount to just hand over...

 

there was the charity commission to deal with when dissolving the charity.. then re registering with Ofsted, re negotiating for the setting rooms or wherever it is held - some charge more once it is no longer a charity. Re employing all the staff etc.. as well.. think of it as a new venture and all that you would have to do to get it up and running..

 

it all sounded so easy when we started to look into it we found it so complicated that no one wanted to continue... and we didn't have the money for me to do it alone..

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Bank account - you need to close down your existing account and any money left in your account you need to donate to a charity, you can overcome this by setting up a ' friends of' like the schools have who just do your fundraising and donate the money to them so the money can still be spent on the setting.

 

To value your assets - this can be done by the committee, they say how much they believe it is worth and price it up at car boot prices.

 

you can move from a committee run to a non profit making limited company, it is quite easy to do and well worth it...........

 

With the charity commission, it is just a form you need to complete to end, and if you want the friends to be registered agin its just a form to be completed, the friends do not have to be registered as long as they dont have over £5000 in their account

Edited by Guest
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Hi

We dont have any LEA advisors for school clubs anymore...they wentin the cuts along with lev 3 playworker qualification :o

Inge it does sound pretty complicated doesnt it??? If only it was easier....i suppose it all comes down to if anyone else would be willing to take it all on when I step down??

 

Thanks for the info ...its something to think about.

Edited by marley
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Marley

I have read your posts over the year and admired your commitment and energy. The whole set up has sounded a nightmare and the time and effort you have put in are amazing. In many ways you have been working with one hand tied behind your back.

I think your husbands idea is brill - you would be rewarded for your work and the setting would not lose you - as they certainly will when you realise you cannot do everything and become burnt out. Speak to the head and get the support of the committee to move forward.

Good luck

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Marley

I have read your posts over the year and admired your commitment and energy. The whole set up has sounded a nightmare and the time and effort you have put in are amazing. In many ways you have been working with one hand tied behind your back.

I think your husbands idea is brill - you would be rewarded for your work and the setting would not lose you - as they certainly will when you realise you cannot do everything and become burnt out. Speak to the head and get the support of the committee to move forward.

Good luck

 

 

Aahh thanks Chilli!

Think I will give it to the end of my chair year to see how the land then lies (plus gives me time to think and look into further maybe)...I just havent got a business head really...good at keeping track of my own finances but scared it would mean getting bank loans....ohh an idea tho...does that mean I could hire my own staff??? Deputy is so much better than the current manager!!! (naughty!). Also i would have to ensure I gave myself a wage how do you determine costs, who would do the wages, books etc???!!

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Aahh thanks Chilli!

Think I will give it to the end of my chair year to see how the land then lies (plus gives me time to think and look into further maybe)...I just havent got a business head really...good at keeping track of my own finances but scared it would mean getting bank loans....ohh an idea tho...does that mean I could hire my own staff??? Deputy is so much better than the current manager!!! (naughty!). Also i would have to ensure I gave myself a wage how do you determine costs, who would do the wages, books etc???!!

 

 

yes you could hire your own staff, set the wages, do all of the things to run the setting.. factor your wage in as a manager, but this may be less than the staff to begin with.. depends on the income...

 

wages, books, bookings, etc etc etc would all come down to you, think of all the jobs other committee members do...... or hire of an administrator to do this, again all cuts down on any profit.. although once up and running I used to be able to do the preschool books in half hour each week, wages took a bit longer at 4 hours a month approx.. then there is the banking of all monies to do as well. Think there are companies who do wage rolls for a fee... sure someone on here will know one and costs.

 

I also think a bank account for a business may incur charges/ a cost ... need to check that one as well.

 

things just keep popping into my mind on what it would entail..

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I use some software from a company called 'moneysoft' and that does all the wages, tax, NI, SSP, SMP etc it's an absolute boon!! It costs about £50 a year, but I consider it money well spent as wages take only moments to do

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oohhh keep the ideas/info coming......

 

if i do do it i would have to give up pre-school (maybe not initially but eventually)...so would have more time to do the wages, bank money etc. Think I would manage but not be in ratio so could be there as bank/emergency cover. Re-registering with OFSTED would that be a smooth transition or would it have to close and then re-open after eg six week holidays.

 

Would also need to see about if there was support from this from the school head (he really needs for it to be there as only childcare option in the village). If not then think the idea stops there!!! Just finding out if we have a rental agreement in place at the moment how it is determined etc

 

Also do you have to have a surplus of money when you start ? Would I need a loan?

 

How do you set your level of fees...to cover all costs and then your own wage:? At the moment we are making a small profit per month.

 

I know dissolution is by the committee but do you think you have to find out what parents want?

 

What other benefits may you lose from stopping being a charity? Would we be allowed to access training from LEA still?

 

Could I just use the same booking procedures, finance sheets that are currently used?

 

Lots to consider..bookings all done in one night, finances not sure about how long (will speak to current treasurer), wages currently done by company that specialise in this for charity business...going to check out moneysoft, bank accounts now.....

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oooh another....I know charities have to do end of year accounts for charity commission what do private business do with their accounts??? Is it yearly tax accounts that have to be done...i there anything else???

 

register for PAYE...whats that?????

 

submit VAT????

 

 

this is frightening!!!

Edited by marley
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Guest jenpercy

Ok you need to do anual accounts and you need an accountant. You may have to pay for training. Obviously we have not gone on any training recently, as we are closing, but the most recent Safeguarding that we were offered would have cost us £100 per person as a private setting.

 

you will needd to notify Inland Revenue that you are taking over and they will give you a reference number for PAYE (Pay as You Earn) to pay tax and NI for the staff. I have someone who does my Payroll for me for about £30 a month.

 

childcare is VAT exempt.

 

you willl need to set up a limited comany - or a not for profit company. Mine was set up as the former by the previous owner - but I would go for the latter if I started again as it has some advantages, for grants etc and the business isn't going to make a profit anyway.

 

Well not in the legal sense of giving out money to shareholders. Any money left at the end of the year should be either ploughed back into the business, or withdrawn by the owner, I think before the end of the year, actually, although I never got this far.

 

Can't see any reason to change your domestic paperwork, unless you want to. New name and new letterheads of course.

 

I have never had a loan. it is good practice to have a reserve account with contingency funds. you must build this in. As you will be starting without any money from the charity, it may be a good idea to put some of your own money into the account to tide you over, but you should pay yourself back as soon as possible.

 

You can get advice from the business manager who advises early years, - you do have EYFS, or Business link.

 

good luck

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