Aibu to set up a private day nursery?

[Wonderponder]

Just that basically. I'm a experienced early years teacher, sick of the system in schools and the politics. Only one year round nursery where I live. Got the initial investment money and the first six months wages. Anyone done it? Or am I being ridiculous? Old time poster, just changed name recently!

Thanks for your responses. The end goal is a chain. But Katymac- do you know any that have been successful? I'm wondering what makes the difference? If it helps, I live in an affluent area, where the majority of children are sent to private school, so there must be the money?

Affluent areas understandably do better. I live in quite a socially deprived town, and the affluent families living on the outskirts of town mostly consist of DH working in city and DW is SAHM, so very little need for Day nurseries. That's not a generalisation btw, that's genuinely the demographic round here.

When the council is paying 3.30 an hour? umm no - they lost 90 places within a 3 miles radius in 4 months

Wow I thought our LA was bad Katymac, we get £3.85!

Perhaps I won't offer the free places then. Or as part of a full session, to recoup the costs. Or I suppose the alternative is term time only, then make up the rest out of term time. And charge extra for food etc. I think that would cover the shortfall. I'd also predominantly focus on under three to start, no free hours there!

Er yes there are 15 for 2 yos slightly better funded

I worked out my non funded hours would have had to be about £8 to break even

I am a manager of a day nursery in an affluent area
My occupancy for September is currently 35%
It's an affluent area but most people are not using nursery like they used to
I will only have 2 full timers in September
Most people use a combination of nursery and grandparents
They mostly work part time or only one parent works
Or they just do funded hours term time only
I'm trying to persuade the Paramaribo who qualify for 30 hours to increase their sessions but the parents are preferring instead to just reduce their outgoings
I am actually quite stressed at the moment and considering my future
Morale in the sector is at an all time low
People are leaving the sector in droves and it's getting harder to recruit good quality staff
Minimum wage keeps going up but management wages haven't been rising at the same rate
I can only see it getting worst when the full effects ofcthevndwefunfing is felt
Quality is going to suffer and I don't want to be a part of it

Katymac- not round here. Very limited amount would qualify.

Don't do it !!

Seriously you could set money on fire right now and save yourself heartache and stress

Everyone wants the free hours but it's not practical to provide them, they have to be free at the point of entry so you can't add strings to them and with the 30 hours it's just not plausible

Let's talk paper work ! You need a constantly updated sef, development plans, health and safety plans, constantly changing safeguarding plans in place, children development trackers
Now onto learning journeys and observations for each child which are large and immense for each staff to complete but will need moderating by you or a deputy.
You will need a policy on everything that will need to be constantly updated and time will need to be given to each staff to ensure they know the policy.

You'll need training budget for a senco, paediatric first aid, prevent training, child protection training, British values training, FGM training for all staff.

Now onto astronomical insurance costs, toy costs,furniture costs, food costs, lighting/heating/rubbish collection/specialist nappy collection etc costs

Actual staff costs it's about £9900 for one practitioner for 30 hours a week term time only and you'll need at least 1:4 for 2 year olds and 1:8 for every 3/4 year olds. Oh btw that's just staff take home not including what you have to pay for each staff for tax etc

You'll need a qualified deputy and that's about £13,000 30 hours term time only take home for them.
You will also need to find these staff and quality nursery staff that you can hold onto are like gold dust they don't exist or they are staying where they are at the moment.
You'll also need to have a agency for supply for holidays or sickness too and they cost about £20 an hour that you'll end up paying a agency for pretty crappy staff but you'll need them to ensure ratios

You'll need a payroll company or in house payroll person and a HR person.

You will also need a time turner to ensure all supervisions, appraisals, peer on peer observations and moderation gets completed.

This is the bare minimum for a passable nursery and if you want a great nursery youlll need a lot more

Just don't do it

I just read DH this "Don't do it !!

Seriously you could set money on fire right now and save yourself heartache and stress"

He said yep, don't do it

I know someone who set up one 3 years ago and they made NP of £170k last year. It can be profitable but they did own the building.

over split sessions and charge extra for the food) to make up the cost to 5p/h which is the going rate round here

Be really careful. Some LA's are stopping settings charging extras to top up the shortfall.

I've left the early years now. It's a sad place to work and the 30 funded hours are killing it. 6 nurseries, though full, have recently closed in my area as they can't afford to run. The LA were paying £3.20 per hour per funded child with the daily nursery rate working out at £4.50 per child so a £1.30 shortfall per funded child per hour.

Get yourself on Champagne Nurseries Lemonade Funding on Facebook to see the effects it's having.

I'm in the Midlands and was paid £8 per hour as Room Leader, Third in Charge of Nursery. The Deputy Manager is on £10 per hour and the Manager/owner doesn't draw a wage. She has mainly funded children as that's all the parents want, yet it's in a really affluent area where out of the 50 children on the register, around 11 of the parents are both working, the rest are wealthy but still only use the 15 free hours.

I'd advise against it. But it's your money. My last nursery, the manager invested all her redundancy money, she's now realised after 4 years, that money has gone. The best she can hope for is a buy out.

DD goes to after school club which is run at a nursery, they do 0-school age downstairs and breakfast/after school/holiday club up to secondary in the mezzanine 'clubroom', and pick-up/drop offs to all the local schools. On a unit on an industrial estate with outside space. Currently full.

Sadly all true in my experience. Real worries for sustainability of the sector. In the past LA officers were in place to support, develop, challenge and quality assure, but of course the demise of local authorities by this government will remove the support you need as a provider as well as the assurances parents require. LA's are not responsible for this mess, funding from national government is just not enough.

Link for those interested.
www.facebook.com/groups/ChampagneNurseries/?fref=ts

A very good group

Also don't forget that nmw is indeed £7.50/hr. But as an employer you need to factor in insurances, employers ni, annual leave, pension costings - so a nmw staff member actually costs you about £10 an hour.
In our area a 10 hour day is £40 but I don't know any full timers at the nursery ds attends. And currently only 2 babies there. A LOT in the 1-2 room though. They've been trading 12 years, have 4 sites and a bloody brilliant reputation locally.

Oh I didn't even mention ofsted who coke round looking for a specific thing they want to see depending on the inspector it could be a maths focus, literacy focus of it could be challenge and risk.

Also inclusion is my passion but it's under funded so you have children in need of 1-1 funding but it isn't there and you vent exclude them from your setting what do you do? You have to find a solution from somewhere because not doing so will end up with a failure from ofsted
You have a child with additional needs who needs additional supportive equipment oh wait there's a 7 month waiting list so what are you going to do when ofsted turn up and this child isn't being supported!

You said earlier you have the first six months money well with that £250,000 I would buy a house or a bloody holiday for 5 years because it's just not worth it any more.

I'm struggling with mine and I have a 97% occupancy and the only reason I am still around is shed and I mean shed loads of fund raising which I do all year every year

This is really interesting. I had no idea.

I really really had no clue.

My dcs are school age now. I used a nursery attached to a hospital which seemed to do well but this was 10 years ago; so much has obviously changed now.

I'm on the committee of a traditional pre school that has just closed its doors for the last time. OK, our model was completely different from a commercial nursery (and ultimately unsustainable), but the sheet volume of legislation hoops that we, as volunteers, had to jump through was absolutely horrifying. The whole sector is in turmoil and businesses are closing in their droves. Get yourself signed up to the Champagne Nurseries on Lemonade Funding FB page to see for yourself.
Remember that you will only be paid 3x a year fur the funded hours and your LA will claw back money for hours that child doesn't attend, or have had any change in circumstances or for myriad other reasons, seemingly on a whim.
You will need to work around the shortfall between what the la will pay per child and what it actually costs and did some very creative extra charges to comply with funding agreements.
Margins are incredibly tight and you'll find that a compulsory course (first aid/safeguarding etc) cost plus a minimum wage/pension/NI rise could tip you over the edge.
I hate to be the voice of doom reason but don't do it op.

Thank you for all of your honest replies. The reason I'm doing it, is because when I walk into my sons nursery. I always think, I can do better than this. I intend to run it as a business. All business is cut throat, and I will cut costs where necessary. I can't see how, if you are given say 3.50 per funded place, you can't make it up through the rest of your fees/ extra. I am also thinking of using the upstairs space as wrap around care. Fundamentally, I think if operated as business, you've got to stand a better chance?

probably over split sessions and charge extra for the food
A lot of LAs won't allow this model for funded hours. Sessions must be offered without any unnatural breaks and any extra charges must be optional, so you have to allow a packed lunch. You can only ask parents for voluntary contributions so can't rely on this money for anything. This years parents may not mind paying but in a couple of years (if the whole thing hasn't been deemed a huge failure) those parents will not get the funding crisis and then where will we all be.
It's hard being in childcare at the moment. So many hoops to jump through with so little financial reward. The lemonade/champagne fb group linked above is really helpful.

I don't think you are listening! But good luck anyway, you will need it.

We've xposted.
I can't see how, if you are given say 3.50 per funded place, you can't make it up through the rest of your fees/ extra.
Because you are not allowed. A funded place has to be completely free to the parent. Providers are not allowed to make compulsory charges for funded places. You can ask for voluntary contributions, but if parents don't want to pay, they don't have too. You can charge what you like for non funded hours, but obviously there might not be many of those (most dc with me are part time so no time to make extra money on additional hours).

So ultimately the nurseries that are failing just aren't trying hard enough OP?