To think someone MUST be profiting from private nurseries?

[SprinkleofSpringShowers]

Nursey saying that the free hours cripple them. My bill has gone down by £200 from £940 to £720 for the 15 free hours. My child is booked for 3 days/30 hours (not that he’s ever there 30 hours) I don’t really understand how they are struggling so much when any shortfall in the funding is just made up by parents.

The branch we use charges £73 a day now. They’ve open two new sites in the last year. Can’t be doing that badly can they?

Also think it’s really poor taste when they seem to pedal this image they’re struggling and the staff are likely paid NMW and the directors turn up in 2 year old Porsches.

How do you know for sure? Even if they were that could be from years of building the business steadily, you just don't know.

Our business wasn't a nursery either.

You do seem rather angry about the fees you're paying. There a necessary evil if you work, and those fees need to cover costs and keep the business viable. It can't be avoided, credit to them if it's a family business, it's hard work to run one, and run it with family on top of all the other stresses and dealing with people who make ill informed judgments about your business and life style.

I'm just pleased I sold my business as I don't have to be judged like this anymore.

Totally get this. Also schools becoming Academies, therefore making Academies becoming landlord to the preschools and upping what was a nominal rent from the Local Authority is making it impossible for some.

Thanks for the education. Two kids and 5.5 years later I hadn’t figured out they are a “necessary evil”.

Exactly.

When handing over a huge proportion of my salary to what is clearly a solvent business model, I don’t expect to have to feel sorry for the provider…

True but you've (presumably) no idea whether these people have partners. The lady who runs our preschool isn't earning much from it but goes on plenty of fancy holidays. Her husband has a relatively highly paid job.

Childcare and care homes. Care homes are always pleading poverty yet the ones I’ve looked up are making millions.

Care Homes make a FORTUNE.
Private nurseries also make a FORTUNE.
Just look at Companies House.

For those saying "but the staff arrive on the bus" no doubt they do. It's not the staff, room leaders or even manager who will be profiting from this. It's the shareholders of the limited company.

I can imagine that Owner owns the Property freehold (probably as a pension investment) and then leases the Property to the Limited Company (thus earning rent). Limited Company shares held by Owner.

I would add, i was involved in assisting a local community preschool with their finances for a while and could absolutely see they didn't make money.

Their staff were all older, qualified and very experienced. They only took for the two years before school, term time only, school hours, and were heavily reliant on 3 year old funding, and refused to charge much top (only a small weekly consumables fee).

https://www.independent.co.uk/news/uk/politics/rishi-sunak-koru-kids-akshata-murty-b2398515.html

I can’t imagine Rishi Sunak’s wife had shares in a childcare company if she didn’t think it was going to make her a nice profit!

The chain of nurseries I used to work for are 100% making a big profit. They own about 12 branches and the three directors are very wealthy, drive flashy cars, big houses etc they pay their staff just over min wage but they are always understaffed and over ratio. This nursery has been going for over 30 years though and possibly smaller nurseries don’t make as much.

I know a nursery owner, he has a chain of about six nurseries. He is minted, really flashy. Always on very extravagant holidays, massive cars, employs a housekeeper etc. It does make me wonder about nurseries always crying poverty.

It's nit about feeling sorry for them, it's about realising there is more to it than you think and you possibly don't have a full understanding of why it is the way it is.
I can see both sides from being on both side many don't have this perspective resulting in unrealistic views and opinions which are often wrong.

As an ex childcare practitioner, private owners are usually making a fortune and staff tend to scrape minimum wage. My previous bosses had very nice new cars, big expensive houses and enjoyed luxury holidays. One of the reasons I stepped out of the profession - worked like a donkey to barely make ends meet.

The owners may be making a fortune, would it have always been that way?

What about in the beginning, the many years of building it up, nit taking a wage, or staff being paid more that you, what about the possible failed attempts at the business if they lost everything, loosing family time to build it up.

It isn't a sob story, it's a different way of working to being employed these fortunes can take years to build up. There is nothing stopping anyone from giving it a go.

Truth is many can't cut that way if working.

So long as they break even on costs v income, they are making a killing - because the businesses usually own the property; the business services the mortgage/property repayments; the business provides a way for related interest payments to be tax deductible… if the business eventually goes bust or simply ceases trading, the company is sitting on a huge, highly marketable, property asset that has increased in value and been partially paid off via the business.

It’s a huge property development scheme. I know this as I was able to get £1m in asset funding to buy a property to run a private nursery - negotiated over the course on one afternoon of discussion (and a business proposal obviously). Covid happened so I didn’t take the money or buy the property (thank god) - but it’s all about the underlying asset.

YANBU because in many other countries (Germany, Austria, Denmark, Sweden, Netherlands etc) nurseries provide exactly the same facilities and care for a fraction of the price. Private nurseries cost a maximum of €400 per month. That would include food and all-day care. The vast majority of nurseries have kitchens with freshly prepared hot meals every day.

Staffing is obviously an issue and full-times places slightly hard to find but on the whole, the actual cost of childcare is never an issue. It's absolutely normal for parents to get 1-2 years of paid parental leave and then put their children in nursery around 2, paying few hundred euros a month at most. Paying the equivalent of one adult's monthly salary to have someone take care of your baby for a few days a week is absolutely mind boggling tbh. The UK system is incomprehensible for many people outside the country.

YADNBU. Nurseries are some of the biggest CF's going.

Big presumption that businesses usually own, leases are also very common. Difficult to know which applies without actually knowing the ins an outs.

I can do basic maths. I posted about funded hours and the fact that the nursery is claiming these disadvantage them.

When the reality is they collect the funded hours and charge me the shortfall vs what they used to charge (not withstanding the fact they increased their rates quite significantly a month before the hours came in).

So the funded hours can’t be disadvantaging them to the extent they’d like you to believe, they’re just collecting the fees from somewhere else, in addition to me.

The nursery owner I know is a very wealthy man.

It’s like any other business surely?
Everyday costs : staff and additional staff costs, accountant, heating, lighting, water, rent/mortgage, insurances , advertising , cleaning etc..,
Then build in cover for staff sickness, holidays, double time if open BH etc..
Food, cleaning materials, building maintenance, maybe garden maintenance. Driveways/parking areas have to be fit for purpose and maintained.
Equip the place. Sinking fund for replacement of materials.
Contingency fund for emergencies.
Then pay the directors.
It’s not a cheap business to run.

No one “invests” in business that isn’t profitable. Not sure why some parents think private school owners shouldn’t make a profit.
Schools/nursery are expensive to operate with thin profits.

Premises, insurance, employees, payroll, rent, supplies.
How much profit would you want to make on your money running a nursery - 5%, 10% ? They need reserves in case of an emergency.
They are providing you a service and are expecting a return on investment.

(btw charity bosses roll in dough on high salaries, perks).

Not a presumption at all - I was in the industry and ran a small business from home before exploring branching out. I spoke to industry leaders when exploring operating as a local independent or as a franchisee when competing with three national chain nurseries operating in the area. All the chain nurseries own the properties. It’s the business model. It’s what hedges them from going under - they weren’t the ones closing down during the lockdowns were they? Their underlying asset continued to appreciate regardless of impact on income.

The ones run in village halls, where they hire facilities, obviously not but they are a rapidly dying business model as they can’t compete with the need to be open from 7am until 7pm (and weekends in some cases) to accommodate modern working practices.

Strange interpretation of my post. I’ve not posted to say they shouldn’t profit, I’ve posted to say they should stop pretending they don’t.

I always wonder about the care homes as well that seem to be closing down at a rate of knots. Given the insane amount of money they charge, one can't help wondering how they struggle so much