@FoxtrotSkarloey - The main costs are staff wages and rent. In London, rents are astronomical and take between 30-50% of what comes in.
Utility costs are also grossly inflated for small businesses. My electricity costs for example are about £6000 per year. The phone and broadband costs me about £2000 per year. Insurance is £250 per month (and for what?!!!).
But the staff costs are crippling. The on costs, even for those on NMW are barely affordable. When employers pensions were introduced, the costs were low, but in recent years, they have spiralled.
To compound matters, we now have a culture where parents expect not to pay and in fact resent paying anything.
If you looked at my nursery, you would think it made a big profit because we have lots of children. But in fact, everything that comes in gets paid out. I can’t even afford to pay myself a salary - I have to rely on housing benefit to survive.
I keep my nursery open because it provides a valuable service to the community (I think), and frankly because I hope to sell it at a profit to get some money back out of it after putting in so much for so long. But it looks like that won’t happen now and I’ll have to close.
I’m sure most nursery owners are like me.