Parents "take over" of failing nursery - any experience?

[FamilyTree2010]

Hi
My son's nursery is currently local authority run and benefits from Sure Start grant funding.

The council have effectively said that unless the parents want to take over the nursery it is likely to close. If the parents do decide to take it over the council will provide some transitional assistance and administrative help during the first year or so as they do not want to see the nursery close but claim that they cannot fund it any longer.

I'm torn - this nursery is the best in the area and my son (who is nearly three) has been there for two and a half years and is very settled and happy, BUT do the parents really want to take on responsibility for a nursery? We have no idea where to even start with such a project!

Can anyone with any experience in owning/running a nursery offer any advice please?

Thanks in advance.

hi katymac would you mind answering a few questions for me please

are you really finding it that tough to make a profit? (i hope that didnt sound rude, as i wasnt trying to be)

we were looking at renting a place that could hold about 70-80 kids and it would cost us just under £16,000 pa in rent and rates

if we were to get the 56 kids as above and have 11 workers plus ourselves would there be much other expences - i wount pretend to know much about taxes but we have a pretty good accountant so i think he would help us out there but do you have a rough idea how much i would have to pay, and is there any big problems you have encountered?

any help here would be really appreciated as we would like to go into this with our eyes firmly opened thanks again

oncosts - i used to calculate oncosts at 18% of every salary. amazing how that alone mounts up.

11 staff vs 56 children is erm 1 to 5 ratio?? that's not enough surely! what about your manager, cook etc who are not even working directly with the children?

Well 56 children is 80% - you would do well to get that

Staffing is a nightmare new A/l levels plus sick, plus training (time more than cost), plus maternity, plus NI, recruitment, induction, appraisals, holiday & sickness cover

OFTSED registration is tricky - impossible without 3 years childcare management experience is what they told me

The H&S/buildings requirements are obscene for new premises

Heating/lighting/equipment/crafts are all much more than you expect

What age ranges - how many in each?
How are you dealing with the toilet issue?

ami was it you that started another thread on this? If so, could you link it to here (to avoid disrailing this one further?

BTW, have you got an actual site in mind with the necessary planning consents to use as a nursery?

You need premises with direct acess from the ground floor to a large outdoor area for all 3 and 4 year olds. Not easy to find. Then a car park usually to meet requirements.

Business rates are variable but can exceed rent.

I can't see 11 staff working for 56 children unless you are going to cook all day.

6 babies (need 100 hours cover a week plus hols, cpd cover etc)
16 2-3 ( may not all be in for full 50 hours but need 200 hours if they are)
24 3-4 (again may be lower at certain times but need 150 hours) very hard to run a quality provision indoor and out on minimum staffing. I would you need 4 which is 200 hours.

500 hours staffing a week plus manager, cook, cleaner, admin. You will be looking at 550 ish hours at variable rates but say an average including ni pension with on costs of £9 an hour. Then add 10 per cent holiday etc

DDA as well as toilets.

Simba - we were told direct access for all ages not just 3-5

Don't talk to me about DDA it was my nemesis

That may well be the requirement in some las. Not ofsted although they don't usually like upstairs for babies. Most las say a condition of funding is direct access for all funded children.

hi im sorry if iv came over a naive i was only looking for a bit of advise, yes selling houses is alot different from running a nursery. iv been helping out in a nursery for the past year so i kind of know what materials are used and how much they would cost.

as for advertising iv been looking at trailer boards, flyers,adverts in local papers etc. to get costs

the figures i was giving was just an example i know that i would have to get these near exact to be able to put a business plan together, im only thinking of opening a nursery just now and i would get these figures exact before going through with it.

but annh your right i didnt think much about the maintenance costs, could you help me and tell me what other maintenance costs i could be looking at please

we are only just starting to look at running a nursery its not as though we are going to be opened in a few weeks

On Simba's numbers you will need minimum of 4 child toilets

Staff - I would say 2 ladies 1 mans - prob one of each plus a disabled with the disabled being accessible from the public areas of the building

Your kitchen alone will cost 10's of thousands to fit out

You have at least £5.5k staffing costs before anything else

Plus budget for supply staff to cover illness, jury service etc, and extra person for lunch and breaks cover.

Premises will need staff loos, lockers/cloakroom, children's loos, nappy changing area, kitchen that meets hygiene regulations, an office, the actual rooms for childcare (which meet space requirements, and are laid out to meet needs of lunchtimes and naps), storage for equipment. All with a layout that meets fire restrictions and allows you access control (and prevents escapees and access to potentially hazardous areas). You need outside space for play, and separately for bin storage.

As well as basic rent, there may be maintenance, also business rates (usually based on square footage).

You will need office systems and secure storage for all confidential information. Also legal advice on contracts (staff and families), an accountant and someone who will deal with the never-ending compliance issues (everything from keeping policies and records up to date and onwards). You'll have to arrange business banking facilities, HR, payroll and pensions.

There'll be big start up costs in equipment (play, furniture, kitchen/lunch) and onwards replacement refurbishment costs.

And probably more that doesn't spring to mind.

Commercial waste disposal incl bodily waste disposal

I should explain that I spent 7 years running a team who advised on nursery set up including business support. They also set up 7 non profit making sure start ones. ( 3 couldn't break even and closed - 4 still going)

These days it's all about supporting closure usually in situations such as the original lister. As la funding is squeezed it is only going to get worse.

We are terrified of being forced to get too big too soon, because of all the local closures

We have no idea if our current boom is sustainable

You don't necessarily make more money being bigger.

I'd rather be small & outstanding, getting children without advertising, than to grow too fast, need to advertise to just pay wages

amiandcharliesmummy - IMHO you could sensibly go away and do some proper market research. Call some insurance firms, inspect some other nurseries, try searching Amazon under 'how to run a nursery'.

amiandcharliesmummy - I'm not sure where you get either the 56 children or the £140 per week from in my posts, if these are what you are referring to?

My son's nursery has space for 56 children in total if it were fully occupied however it is less than 40% occupied. It runs as a full day nursery and the charge for a 3 year old to attend 5 full days per week (before early years deduction) is just over £1,000 per month, or £235 pw (51 weeks)

11 employees would not be enough to staff our nursery if it had increased occupancy.

It needs to be 70-75% occupied to break even. The problem, as Simbacat and others have said, is that not all children attend 5 full days per week. Many are part time and the council also offer fully flexible 15 hours early years places meaning that there are many time "slots" which are unavailable to be filled by full time children. Basically it would be impossible to have more than 75-80% occupancy even if the nursery were fully staffed and running at 56 child per day capacity.

As I've said, I don't want to run a nursery but if the only option is a parent takeover then I will consider it. What I would want is for the council to continue the run the nursery but actually put some effort into promoting it and increasing the occupancy to make it viable.

From my point of view the council are currently saying one thing (e.g. "we don't want this nursery to close" and "we want to work with you") whilst constantly putting obstacles in our path to prevent us getting information which would assist in putting together a business plan.

However, I am very pleased that the nursery has just this week had applications for 3 full time places [smiles]. Hopefully this will show the council that one open to the public session and one appearance by the children in the town centre in Hallowe'en fancy dress is helping to advertise the nursery.

There are 3 further open sessions this month as well as opening the nursery as a creche for late night shoppers once a week in December.

We've also had two recent articles in the local paper and created a website.

We are fighting as well as we know how and are now waiting on the council's consultation outcome before deciding further what to do.

amiandcharliesmummy re: outgoings. I'm happy to tell you the approx outgoings of our nursery off this thread but you need to remember that this is a local authority nursery and not a tradition private nursery so some costs are higher( e.g. staffing and pensions), and others are not payable (e.g. rent). Let me know your email address and I'll pull some figures together for you if you wish.

A brief update - the Council officers will recommend to the Council executive that my son's nursery closes at the end of the Financial Year.

The only option is for the parents and staff to form a Social Enterprise and run with the idea of creating a Community Interest Company. For anyone else considering this option there is good information on this website:

CIC Regulator

I am still completely torn. I have a full time job and a three year old son. I really don't want to be a director of a nursery, but I also don't want my son to have to leave the nursery he loves.

If anyone has any advice I would be grateful.

i really would not reccomend it i mean if the la cant keep it open then there is very little hope of it being open with a parents board running it

staff wages, insurance, training, maintence ofsted all issues you would have to deal with plus depending on where you are pre school places that parents think are free are actually being subsidised by nurseries and they make a loss on them especially if they are not full

i know you love the nursery but i think its time to find a new one however hard it may be to accept