Taking over a charity run pre school

[mumtotwo1988]

Hi,

Me and a friend are looking to take over a charity run pre school and turn it to a limited company of which we would both be directors of.
We have sent up an AGM to discuss and hopefully get the votes from parents to go ahead. We have faced alot of hurdles so far, we know are being advised that the charity will have to be valued for us to buy and also put to tender which we have not been told up to now.

I just wonder if anyone has been through this with the pre school being valued and then put out to tender. I find it odd that we haven't come across this yet after lot of research.

Thank you in advance for any help x

I have a bit of experience in helping to transfer a committee-run preschool to another owner. As you've no doubt learned by now, it's not an easy task.

I don't remember having it specifically valued - although we did have to put together a list of any assets that were owned by the preschool. There wasn't a great deal really - computer equipment & tablets, some of the bigger play equipment, tables & chairs and any money in the bank account. The building was rented so we also had to ensure that the landlord was willing to rent it out to the potential new owner.

The LA were able to advise and support us. I think they were the ones who arranged for it to be put to tender (it wasn't a charity run preschool so that may have made a difference).In any case, the owners we wanted were the only ones who were interested so that was straightforward.

The other thing to consider is what will happen to the existing staff. We had to go through the TUPE process and hold a consultation to find out their views and whether they wanted to move across to the new owners or hand in their notice instead. If they choose to transfer to your new company, you'll need to think about their new employment contracts and any new terms and conditions.

Ofsted decided that new ownership meant that the preschool had to be given a new registration number. They gave the go-ahead for that and made arrangements with the new owners for an inspection.

You need specialist advice.

What premises is it in? What are the lease arrangements? (casual let? short or long term contract?)

TUPE of staff? (you will be responsible for any future redundancy) What would you be buying? (goodwill, lease? resources?)

It is VERY hard to even break even running this kind of provision even with a low lease. If you change to a profit making company then the rental may increase (for example in a village hall)

Have you looked at at the costs of running a limited company?

Do you both hold a L3 or above in childcare?

Is the local school in the position to open a nursery class? (if they do will your business be gone overnight?)

The LA EY and Childcare will be able to offer advice.

To be honest, it would be a risky venture at the best of times. Our preschool was barely breaking even. I can only imagine how much harder it would have been with the current conditions and closures.