Is being a childminder profitable?

@SMaCM

Those ratios may be a bit misleading - most people need care for children below the age of 3 in which case the recommended ratio at nurseries is one adult to 3 children for age 2 and less - SAME as childminders (which doesn't justify the same level of fee for that age group) and for children aged up to 3 it's one adult to 4 children (so as a childminder you'd only be missing one placement compared to a nursery with significantly higher running costs)

Most children move onto preschool age 3-4 and the cost of wraparound care provided by preschools where the ratios are similar to the one you stated in being 1:13 - their cost is also comparable to what my current childminder rate is (£35 a day) therefore it's difficult to argue you are missing out on up to 8 children's worth of fees by being a childminder and therefore justify a similar level of fee to a nursery

@ivfgottostaypositive...
Nursery have less staff to child ratios and typically employ apprentices on very low wages less than minimum wage whilst also getting a grant from the government to train them. They buy in bulk so get economies of scale ....so whilst they have some costs a childminder dosent they also have savings a childminder dosent. They are 2 different business models. If I worked in any other setting I could have more children 1 to 1 than I do now and access to Grant's equipment loans and free training I cant access now.

@jannier I’m aware not all is profit. And I didn’t say she’s working more topping up her income after a long day, I said she’s only childminding 5 days a week, she’s finished by 6pm at the latest. She then works one day on the weekend because she likes working and earning money, her night shift money goes towards taking all of her many grandchildren to Disney Florida for 10 days every summer And given the fact that she’s an amazing childminder and we live within 5 minutes walking distance of 3 schools she’s very high in demand. She doesn’t get the problem of just having part timers, all of her slots are permanently full. I know this is an example of one person, but I think most people i know of must be earning about the same as it’s very hard to find a good childminder with spaces, everyone has waiting lists

@Herpesfreesince03.
Not all you charge is profit.
Most parents dont go back to work full time so while at one time a childminder had 3 children 7 to 6 now most have part timers so it's common to have quiet days, afternoons etc. You have to ask why your neighbour needed to top up her money after a long day by then going out to work if her income was so high?
My friend was full and employed an assistant they had 6 full time plus school drop offs then the assistant went on maternity leave....she had to pay her for a year before getting any back from HMRC but could not have the same number of children....you pay all employee benefits. Then 3 went to school leaving her with 1 on 2 days and now 2 on another 2 days.....so it's very unpredictable.

Ivf - we don't have the same overheads, but we also have lower ratios. If I worked in a nursery I could look after 13 x 3 year olds. As a childminder I can only have 3. It's not comparable.

Not far from London in Berkshire. Generally the rates round here are slightly less than nurseries. Mine is about the same, because we are set up slightly differently to a 'traditional' childminder (more like a nursery, but also using the local community) and are both qualified. Even in the next town from us the rates are very different, so location is a key thing. We are right next to a motorway junction and a large business estate.

Our funding rate from the government is significantly lower than our normal rate and our tax free childcare payments from HMRC are frequently late.

I should also say no way as a parent would I be prepared to pay more than a good local nursery for a childminder - childminders don't have business premises overheads etc and I would expect to cost to be at least 1/3 less if not more

Wow @SMaCM are you in London? That's more expensive than most of the top nurseries in my area (and we are in what you could say is an affluent area - certainly not deprived)

@jannier

My childminders day rate is £35 - or £3.50 per hour - the LA in my area pays £3.75 for 15/30 hours so actually she gets more if she signs up......

Our former childminder made a fairly decent profit however she had grown up children and took advantage of her location near a very big hospital so would do 13/14 hour days and offer to do 13/14 hour overnights as well.

Of course it’s profitable or people wouldn’t do it. I think it doesn’t sound a lot when you’re looking at earnings from an individual child, but they have multiple children. I live in a deprived area where childminder fees are pretty low. My next door neighbour is a childminder and has 2 baby’s 5 days a week. It’s £50 per day per baby so that’s £500 a week just from them. She also has another 3 children for wrap around care before and after school (she drops them off and picks them up). It’s £4 per hour and it’s an hour before school and 2-3 after so that’s another minimum of £84 a week. She then does a night shift at a supermarket on the weekend. She’s making around £700 a week before tax and her fees are pretty low

I charge a daily rate £65.50 per day for under 5s and £43 per day for school children in the holidays (I don't do school runs). I include everything in this rate - outings, nappies, food, etc. I have a degree in Early Years and an Early Years Professional (it's called Early Years Teacher now) qualification.

I love working with the children, or I wouldn't have done it for the last 20 years. I also loved my previous job working in accounts, so completely different. My daughter had a few grumpy times about sharing toys and not getting my undivided attention when she came home from school, but I tried to explain that I wouldn't be there at all if I was back in the office. I have worked with my husband for the last 10 years, but before that I just used to go out to groups and parks to have some company and for the children to mix with extra children.

If your area is £4-£5 per hour, then taking on 3 more under 5s with an assistant would bring you in £12-15/hr. If your expenses are 1/3 then that is £8-£10/hr which you have to pay minimum wage, holiday, sick etc out of. It might be worth it if you were full with after school children too.

Ratios (assuming you're in England):

No more than 1 under 1
No more than 3 pre school
No more than 6 under 8

So ... you could have your 2 children, 1 more little one, 3 school children under 8 and more over 8s if your insurance allowed it. Ratios can be changed in exceptional circumstances (but generally not).

@ivfgottostaypositive.
National surveys show that funding rates in the majority of boroughs are a lot less than regular hourly charges. In my borough taking a 30 hour funding family is a loss of £120 a month.
Many childminders are not keen on the HMRC scheme because of problems with payments when it started some taking 3 months. Similarly the tax credits can cause problems as they often suffer delays. The voucher scheme isnt bad once it was set up but some have had issues.

Childminding can be very rewarding I work with lots of children and families with various needs illness, bereavement, special needs its emotionally draining at times but knowing you've been in a unique position to help is very worthwhile....lots of unpaid hours though as these families need support that no funding takes into account (research, meetings, extra paperwork, phonecalls, night visits, weekend emergencies etc,)

@jannier

In my LA the hourly rate for 15/30 Hours is the same as her daily rate if not a bit higher so she didn't lose out although it was a NIGHTMARE to get her to agree to it even though our LA have been really good and she gets the entire term upfront and it's always been paid on time

(It's disappointing when childminders refuse to help parents as childcare is a massive cost to us - more than our mortgages in some instances)

@yorkymidge

The initial day rate was £40 but this EXCLUDED ALL food even though my child was there sometimes until 6pm depending on my work (hours were 730am to around 5pm).

Im pretty sure she didnt do a single trip.....other than the odd park visit on a sunny day in 4 years. She also didn't drive. (Although that didn't bother me)

My DD was there 5 days a week

We had a big issue getting her to sign up to the tax free childcare account because she apparently "didn't like the HMRC knowing her business" 🤔 so because I'd lost child benefit due to the higher income charge (although I'm the main earner and DH barely pulls in minimum wage so actually our combined family income isn't as high as many who still get to keep child benefit) we negotiated the daily rate down to £35

We have left her now as during lockdown she insisted on full fees even though she is closed and I've been furloughed and my income has halved.

We have now found a new childminder from September for a similar cost but provides both breakfast and evening meal

@ivfgottostaypositive.
The costs are higher than you think...on average I have 3 plumber visits a year. The amount of cleaning food and replacement equipment is high. A decent car seat every few years....I have 5....new pushchairs, highchairs, consumables like paint and craft. Training...which if your serious is ongoing and not just the minimum requirement. Outings and food. Carpet cleaning, car cleaning, extra heating professional membership, insurance, extra car insurance etc....then you have times when you may only have one child in...few parents are full time. When a child takes funding at 2 or 3 your hourly rate goes down. Most earn about 1 third of what they charge....and no there is not much cash in hand as most payments are made on line through various schemes so they are not hiding income.

You can take 10% off your income for west and tear on your house, then take off the appropriate percentage of your heating/lighting/water rates/council tax/rent according to how many hours you work.
Then all your expenses, cleaning materials, food, toys/books, outings, food, nappies/wipes if you provide them etc.
Childminders expenses are usually about a third of their income although obviously more when you start up.

Hello.
Childminders' allowable expenses accepted by HMRC shown here

I use a childminder, so clearly offering opinion based on perspective rather than fact.

The overheads look high, 7 seaters car or van for school pick up unless you are near a primary school.

Food, ours eat soo well with the childminder, home cooking daily and they get pudding. If they’re there all day they snack on fruit, carrots and popcorn.

Toys and equipment for children of varying ages.

A quiet space for older children who may wish to read, play games console etc.

Ongoing wear and tear to the house, therefore maintenance. Our CM closes for 1 week a year to paint and repair.

I am assuming it’s a rewarding but expenses heavy business.

Now to me that doesn’t seem very profitable.

You don't really have many overheads as a childminder though? So the money is almost all "profit" You can't count the mortgage etc as everyone has that.

My childminder had a young child and then had mine and at least 2 others but mine was the only full time - full time fees were around £800-£900 a month plus she had older kids for school pick up/drop off so I'd speculate she was earning at least £2.5k a month minimum probably more

I used to be a nurse, working unsociable hours, contracted for 30hrs a week but doing much more. I'm now a childminder, working 45 hours a week. I bring home much more, I don't have a commute, I don't buy lunches at work, i don't have to buy office clothes, I don't work in an evening, I'm here when my children come home from school, I spend my days outdoors having fun...