working out the actual cost of employing someone

[Katymac]

I have added in

NI
Uniform
Holidays
Food
Bank Holidays

How do I factor in sickness?
Is there anything I have missed?

And when working out potential income - how do I estimate the %age of use we have?

bump

Employers Liability Insurance
Training
OFSTED etc. registration
Payroll
Pension ?

How you deal with sickness depends on your business model. Are you going to have to hire daily temps to cover? Budget for perhaps 1/2 a day a month and see how it goes/adjust with experience.

% utilisation depends entirely on your business model - do you want them to have 1/4 hour preparation time at the beginning of the day (and to avoid going over number if parents early and/or staff late)? You usually model income separately from expenditure, unless you are just selling people's time (like a cleaning service).

I'll have a look over the spreadsheets when you are done if you like.

CRB..?
Corporation tax?
An accountant?

Payroll takes an hour a month so I can ignore that
Statutory Training I have added - not sure about optional
Registration is £30
PLI is 47.60 (I think)

Pension.... no, no pension yet

Sick - half a day hmm OK

CRBs are free

No Accountant, & I am a sole trader (I think)

I was hoping to use the spreadsheet to calculate the rate for childminding vs the level of wages I pay (in case the minimum wage goes up suddenly)

But it seems to be saying "don't bother"

I thought CRBs were around £50...

But I employ guys who go to schools and do engineering works so it may be different.

Childminding CRBs are free (don't know why)

Oh, well ive learned something today then!

I have never made much money at it but writing it all down it looks crap tbh

Thing is Katy, I get the impression you have always looked at it as a charitable social service to parents and even to staff rather than as a business - that is not a criticism, just an observation.

It is perfectly possible to make money out of childcare, that's what nurseries do. How do they do it?

1. They only open when they can fill all their spaces, not when it would be convenient for some of their customers. This keeps their utilisation (the ratio of paid-for spaces to available spaces) up, but means that if you want to pick up at 6.15 instead of 6.00 - tough.

1. They work to the minimum allowable staffing ratios (and of course they are allowed much lower staffing ratios than childminders).

1. They keep staff costs down by paying low wages and working employees hard (minimum rest breaks, statutory holidays, change into/out of uniform in own time etc.)

Now if I was going to run a childcare service I would not be happy with these constraints - just like you (I assume). But you can't expect to drive your costs up by paying a high wage, keeping staffing ratios high and opening when you can't get a break-even level of utilisation and still make a decent profit.

Not sure I like "charitable social service" but I think you might be right

It would be nice to be even a little bit profitable

I think the problems are the 1st & 2nd, 4th & 5th and 7th & 8th children as they lose me money

But if I get offered a f/t child which means I need a third member of staff on say a Tuesday (because they are the 7thchild) - the profit I might make on the other days (when they are the 3rd, 6th or 9th) outweighs the loss on that day

The 1st, 4th & 7th cost me money, the 2nd, 5th & 8th break-even & 3rd, 6th & 9th make money

You get it all in balance & then someone leaves & it all goes to pot

I think (perhaps wrongly) that staff work betterharder if they are happy

Ratios are fixed & earlys/lates done by me

I need to fix it a little but I'm not sure how as when the start-up loan (ie my conservatory) is paid for I want to become a co-op