Is being a childminder profitable?

[Yorkymidge]

Hello,

I have two children aged 2 and a 3 month old baby. Lockdown (amongst other factors) has made me realise that i don’t want to go back to working in a nursery. I know two childminders, one claims to earn £40k per year, before deductions, the other is always on holiday and seems to have a comfortable life, she says she claims a lot of bills eg heating/water. She only has one child during the day, then before/after school children. But from what i’ve heard from forums, childminders don’t seem to earn much. So, what i’m asking is, is it all that it seems from the people i know? Is it profitable? I have an attached converted garage so could keep the business separate from my home as such and i hold a foundation degree in early years.

Thanks!

@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

@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)

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,)

@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.

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).

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

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.

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......

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

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.

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.

@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.

@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

@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.

@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

I am £4.50 an hour no set day rate, (contracts are for minimum of 7 hours a day starting at 8am) parents provide everything there child needs nappies, food etc. I no longer offer the funding as it’s nearly £1 below what I charge and I am not prepared to subsidise someone else’s childcare., Also my funded money was taken off me one year and given to the nursery who had entered the incorrect figures and I had to fight to get it paid back to me, the la thought I should just forget it about it and let nursery keep it but it was nearly £400 ! no one has left yet as they have used pre schools on days they don’t come to me. I also no longer offer preschool, nursery runs as found I was constantly coming and going and the younger children in my care were never getting quality time to play, nap and rest as it was always time to get ready to collect x. It has made a huge positive impact on my setting and now parents actually choose me as I am not doing all the running around and it means we can go on day trips out .

@destinasia I'm a nurse working 30 hours and reading some of these comments people take home nearly £800 more. Would you say you made the right choice. Do you miss nursing?

@Tiredmum100 I haven’t missed it once. I had a wobble about giving up my pin “just in case” but that’s it. I’m so happy now - and everyone has commented they can see how happy I am too. Ok it has its stresses but it’s nothing in comparison. My days are so happy and relaxed.

There should be some good info on your local council site .., there may also some set up grants if you are in area that is short of providers..
a friend also got a women in business grant ..

You will need insurance/first aid training (certified ) food safety ...

A range of toys/activities
Way of tracking development

A lot will depend on your area if there are lots of childcare options then your less likely to make lots of money...

It's hard work and as your kids are small they may not understand why you are spending time on other kids ..

I did it for a few years and really enjoyed some of it but once my dc fully in school and old enough to do activities after school earnt better getting an office job ..,. Also got bored with going to playground/play groups etc ...

If you have qualifications already why not teacher training? Part time used to bd an option....

The money round our way used to be before/after school as that was a fixed rate... although that got a lot less when the schools expanded provision which hurt a lot of minders ... investigate your local area before anything else!

I looked into becoming a childminder at one stage. I remember whoever I was speaking to pointing out that you have to remember that it's a job and just like you couldn't clean your house while out at work, you can't do it with kids in your care so that all has to be done after the children leave. With young children of your own that's likely to be difficult. Another thing to think about is your own children and any possible activities they may do in the future. You can't drag other children to activities for your own children - swimming lessons, dance, football etc.

You can have 6 under 8 But no more then 3 under 5 unless exceptional circumstances like a sibling born to ongoing mindee

So you could have 1 more under 5 so baby /toddler And your two

Then 3 under 8 who are at school

Who could be there before /after school

But not all get allowed The extra one under 5

over 8 as not counted in ofsted

So @Apple40 what happens when your baby /toddler grows and starts nursery 3/4

Do you stop minding them so have a quick turnover as such

The money round our way used to be before/after school as that was a fixed rate... although that got a lot less when the schools expanded provision which hurt a lot of minders ... investigate your local area before anything else!

I was a childminder for 8 years and it can be profitable, or you can end up making just over minimum wage. It depends how you approach your work and how much you are prepared to commit.

I used to work from 8 until 6 (no lunch break, no breaks at all, even going for a wee is a challenge). After the children have gone you still need to clean/prep your next day, shop for an enormous amount of food, prep meals, etc. So in all it was about 11 hours a day and I had two children. It was an income but not massively profitable. And it was very tiring. Your house isn't your own, you end up with 'wash your hands' posters, high chairs, push chairs, various car seats, plus all resources, toys etc. Garden has to be children friendly with all sorts of toys/games/slides/swings. It's overpowering on your environment and time. And there's all the paperwork, the funded hours for which you are expected to work for practically nothing, the stress of the ofsted inspections, so I gave it up for a job in a secondary school which is so much better.

Having said that I did enjoy working with little ones and I do miss the children!!