Opening a nursery. Would you do it again?

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Opening a nurseryCompetition for places, condemnation of the Government’s Code of Practice and restricted cash flows. Can the love of providing quality childcare really be enough for someone to start-up their own nursery today?

We are often asked for advice by those considering starting a nursery, on where to start, best practice or simply if the idea is right for them.

The shape of the industry today, suggests that nursery owners have never had it so tough, so  would new, and inexperienced owners be able to cope?

We thought who better to ask than our readers, experienced and professional childcare providers? We want to hear about your experiences and advice on running a nursery, so that we can provide the next generation of providers with a future reference point to help them make their  decision.

Are there any common mistakes that you’ve learnt from over the years, or is there a secret to maintaining a healthy relationship with parents? 


Thinking of opening your own nursery?

Ask us for our expert advice about marketing your setting, collecting parent fees and using software to make sure you always have enough time for the children!

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44 thoughts on “Opening a nursery. Would you do it again?

  • May 7, 2013 at 8:57 pm
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    I’m currently studying a L3 childcare course, then to go onto university to study Early years and childhood studies – to then teach and eventually open my own nursery. As it stands at the moment, I work in a nursery part-time whenever I can, but opening my own one is becoming more appealing to me.
    I was wondering if there is any “top tips” or pieces of advice that anyone could give me when thinking about going in to this type of business?

    Thanks a lot

    Hannah.

    Reply
  • February 18, 2012 at 10:33 am
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    I am 13 and I would like to know if you earn enough money and is it worth it?

    Reply
    • February 20, 2012 at 11:16 am
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      Hi Laura,
      Unfortunately these courses are for people 16 years old and over. If you want some more information to help you make your choices later on please call us on 0844 504 5504.
      Many thanks
      Fiona

      Reply
  • December 7, 2011 at 10:47 pm
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    Most people start their own business because they want to earn money, if you enjoy the job as well that is priceless. There is certainly money to be made in opening a nursery or childcare business, you can find plenty of examples of people successfully setting up their own chains having million pound turnovers in a few years.

    There are plenty of other opportunities around childcare that you can earn a decent living from without having to commit yourself to to starting a new nursery from scratch. If you want a few free tips try http://www.howtostartanursery.co.uk/nurseryfreetips it gives you an idea of some of the things you might want to consider before setting out.

    Good luck.

    Reply
  • September 17, 2011 at 3:35 pm
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    Dear All,

    I do not believe a word about how bad day nursery business is. Either you do it on purpose to discourage people entering this field, or you expect millions out of doing nothing.

    You do not need a degree in Mathematics to see that an average nursery has about 50 places and about 14 members of staff. With one full-time place generating an income of over a £1000 a month, I can not see how this nursery business can be so bad. What is more, all nursery places are usually taken as there is a great need for childcare providers. The nurseries do not even have to care too much about their standards, as they are full anyway. As a parent I speak from my experience. Thus, it must be an absolute lie to tell everyone that to run a day nursery is not profitable and that all you do it out of love to children. It is a HUGE LIE.

    So, dear All, please be a little be more honest and open. You are not going to discourage those who what to do it anyway, but a little bit of honesty would give some positive credit to all those who say they run day nurseries.

    Jo

    Reply
    • January 12, 2013 at 1:18 pm
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      My wife started a nursery with her friend 2 years ago – trust me it is very difficult and not very profitable – she just loves working with children.

      Jo – have you actually looked into running a nursery in any way – it doesn’t sound like it from your groundless argument.

      Reply
      • March 25, 2017 at 2:27 am
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        Agreed! I have started my own nursery two years ago and I have not yet seen what Jo is saying. I wish she was right!

        Reply
    • July 18, 2016 at 2:18 pm
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      Running your own business is a headache in itself. Ensuring staffing levels, parents paying on time as well as early years paying for funded children on time. Sometimes this can be 2 months into childcare given. So money is not always in the bank. Gov pay 38 week at a rate below actual costs, which as you say do provide a profit, or else there would be no point in running a business, but I still have to pay staff for 52 weeks. Yes 50 children on the books, but two days a week are really quiet, where staff can catch up on paperwork, so were not on 50 children paying £1000 per week….unfortunately. So to ensure we keep the staff we work hard and pay for to train, we have to pay well above minimum wage, as well as pay towards their pensions! So yes it is profitable, not as profitable as it used to be. More and more legislation…more time out for training, more training costs…gas, elec,rates, ins, wages,up keep, equipment etc etc etc. Business owners dont get all the money. We work hard keeping everyone happy, whilst the gov keep cutting back money but increasing our workload! Would you go to tesco and tell them you were only paying £100 for a tv thats sellingin at £150??? Nope thought not. yet that is what this government does when they expect private nurseries to work at a loss, and yes this loss is subsidised by ordinary working parents, and let me tell you; there are more working parents in poverty now than ever before….what does that tell you? Governments need to support working parents more that others……only my opinion, if I’m allowed one…..

      hope this helps to put it in perspective, fortunately I do love my job.

      Reply
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  • January 28, 2011 at 10:59 pm
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    Is it worth it financially? Judge for yourself. Invest £150,000 and work 60 hours a week and come home with less than £25,000 a year for your efforts.

    Is it worth it as a vocation for the job satisfaction? As the owner, the nice time with the children will be about twenty percent of your time if you’re lucky. The rest will be dealing with staff problems, regulatory demands, book-keeping, cash flow, suppliers, officials who always think they know best, and parents.

    Is it worth it for accolades? All the above came with an “outstanding” rating, a long waiting list and a generally well pleased bunch of customers.

    Maybe the financials would have been better if we’d gone for a “satisfactory” with shift-working under-21’s on minimum wages or even apprenticeships and worked the assets 7am-8pm for 50 weeks a year? But what of the outcomes for children???

    Reply
    • July 22, 2011 at 2:43 pm
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      Hi

      I came across your post and found it very interesting. I am a trained accountant and have a lot of experience of working with a number of small and large organisations. I am thinking of starting a nursery. Although I am aware that financially nurseries are not money spinners as some people think they are due o the regulated nature of the industry. However, I did not know that returns are so bad. Really – do you just make £25k on £150 investment? Can I contact you ? My mail id is annie.ag.1983@gmail.com

      Reply
    • October 27, 2011 at 1:13 pm
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      Hi,

      My wife and I are considering opening a day nursery.

      It appears there are several very experienced owners on this site – would anyone be open to sharing some of their exeperiences with us and providing some guidance?

      Likewise happy to pay for the right in-depth advice etc post an initial discussion.

      Best regards

      James Allen

      Reply
  • January 20, 2011 at 2:39 pm
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    Anyone who dreams that opening a nursery will involve endless fun activities with the children are sadly misguided. You have to be a strong business person to deal with all the red tape involed and make sure the finances come in to pay the bills. My “to do” list this week includes. Doing the Early Census and our NEF funding returns for the local aurthority, chasing the local college who owe a lot of money for a student’s child that comes here, updating my Self Assessment online, completing paperwork for the EEL/BEEL programme, doing a spreadsheet and evaluation to show how the Capital Funding we bid for was spent, go through the policy folder as some need reviewing, ordering new uniforms, looking for a cheaper phone/broadband provider, have a fire drill and pay the Corporation Tax… i could go on. I do love to go down and have a little chitty chat with the children and cuddle a baby now and then, but most of my time is spent staring at this computer screen!

    Reply
  • January 7, 2011 at 5:01 am
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    Hello, I am looking into buying a daycare nursery, I have an accounting background, no formal education on childcare so would be employing a Manager … ,

    My questions , if i want to start from the scratch , how long for approval ? then, is it financially rewarding ? because this would then be my main source of income

    …. if i am buying an existing one {is this better?}, that has an approved number of 50 placements with 90% occupancy roughly what will my adjusted net profit be expected to be ?

    Reply
    • January 20, 2011 at 12:42 pm
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      I would question the 90% occupancy to start with, and be very careful about employing a manager having no skills yourself. The accounting background is good, but with a nursery it is reputation led, you need to lead from the front, therefore childcare knowledge is very important, I would suggest that you yourself qualify to at least level 3 before going ahead

      Reply
    • January 24, 2011 at 4:39 pm
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      Denise

      If you are still interested in this sector and still looking at buying into the childcare market, please feel free to contact me on 01926 430002 ext 110 I am happy to discuss things as we franchise Banana Moon Day Nursery and have most of the answers you are looking for.

      Regards

      Mark Bates
      Director

      Reply
    • July 28, 2011 at 12:41 pm
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      Did you go through with this? and or did you get any answers on the net profit?

      I’ve done some back of the fag packet calcs and if you have 36 kids, freehold location circa £275k and the associated operating costs (lots of assumptions), 7 staff including a manager to run it…priced at £35 per day per kid, you should be looking at over £100k cleared….thats without sourcing any grants to offset some of the start up costs….I’m thinking around £50k start up…

      really interested to know if this is a mad projeciton…

      Reply
    • September 25, 2012 at 2:49 pm
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      Hi Rita,

      I see you posted this nearly 2 years ago and i was wondering how it is going. I am exactly the same as you, no experience, and i work in accounting. I have only just started looking into this and any advice you have or your experiences would be great. Even the cost to set up would be a bonus, as i would be getting this as a loan, as i certintly dont have the £80,000 that has beern mwntioned on this page!

      Please contact me on zoe_e_fuller@hotmail.co.uk

      THank you

      Reply
  • January 3, 2011 at 7:26 pm
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    Hello
    i would like to open a nursery and would like some feedback on whether or not i should consider leasing a building; purpose built or otherwise or finding a church hall, council hall or community centre. I suspect the lattar would be more cost effective and my children have attended nurserys in both a church hall and council building hall when they were small.
    I would appreciate options from anyone who has experience of setting up a day nursery in either or all of these places, who could give me some beneficially feedback.

    Reply
    • January 24, 2011 at 4:43 pm
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      Hi Celia

      If you are still interested in the childcare market and would like to know more, please feel free to contact me on 01926 430002 ext 110. I have recently started franchising our nursery and if you get the model right it can be rewarding.

      Regards

      Mark Bates
      Director

      Reply
  • November 24, 2010 at 4:46 pm
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    Most people who go into this industry go in to it because we love children and we want to make a difference. I have ran my nursery for 6 six years now and have found that my time and responsibilities have been more focused on financial and office business matters rather than the children as the years have gone by. My staff came into this industry not to be academic but to help the children in their care to develop into well rounded children, to be happy, friendly and willing to try new things. Not to spend hours writing up what they have been doing and printing off hundreds of photographs to prove it to Ofstead when they turn up on your door step once every three to four years. I love this job, the children and my staff but it is me losing sleep, turning grey and making myself ill trying to make sure I have enough money in the bank to cover wages. My advise would be NO dont do it, go into childminding when you only have to worry about your own money or work for someone else and let them worry about the money not you.

    Reply
  • November 15, 2010 at 6:03 pm
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    I opened up my first nursery in 2000.
    Very successful 7 years , sadly last year of being open I was slowly squeezed out of the market, as my nursery was rural.

    I have missed the buzz and excitement of day to day running of the nursery, so I have decided to start up again infact I am waiting for my registration to come through.

    I won’t rely on funding as I will provide fantastic sessions based on affordability for all parents whether working or not.

    I aim to open January 2011 because I miss the best job in the world; watching our children grow and develop.

    Reply
    • January 26, 2011 at 11:33 am
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      Hi Marina
      I was wondering if you could offer me any advice. I am hoping to open my own nursery in an annexe which is attached to my house, it is only small but has own lounge bedroom bathroom and kitchen, floor space is hopefully big enough to take up to 6 babies. Like you I love working with the little ones and feel I could offer a nice cosy home from home in a smaller environment. I hopefully will employ 2 staff members and for me to do the management. I have been working in a nursery for the last 10 year so have a good understanding of what is required from ofsted etc, staff recruitment checks & EYFS but wondered if you could give me any info of where to start? seem to be going round in circles as to what to do first?
      many thanks
      chris

      Reply
    • March 22, 2012 at 7:16 pm
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      Hi, Im just finishing college with Level 3 diploma. Is this enough to open up my own nursery business?

      Reply
    • July 8, 2012 at 5:53 am
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      Hi, you’re post stood out to me.I’m just about to start level 3 child care at westminster college, I hope to set up my own nursery in the next 2-3 years. I would love to know more about your experience in the business. I hope to hear back from you, Tiffany xxxx

      Reply
  • November 15, 2010 at 1:42 pm
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    I opened a nursery 22 yearsas I loved working with young children. 10 years ago I decided to move from Nursery to joint childminding as the paperwork was getting more and more and I was seeing less of the children. Now the paperwork has caught up with me as childminders have to do the same as nurseries! Crazy! Ofsted are squeezing us out.

    Reply
  • November 15, 2010 at 12:33 pm
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    No, you would have to be mad. I sold up after 12 years, couldn’t continue doing paper work at midnight every night. I did not start my own business to be dictated to. As parents we want different things for our children, the current rules and regs, makes all child care the same with no choice for parents. There is no common sense applied any more. Years ago we had FUN, does anyone remember what that means? Children need to have happy fun childhoods, life is miserable enough when you get older. Staff should be having fun with the children, this is where inspiration comes from and how children learn, not via mountains of paper work that the poor carers are so bogged down with. I agree the industry is over regulated, the younger children are subsidising the funded children and I can not see any future in it, unless you are in an area where there are no other nurseries for miles around and the local primary schools don’t have nurseries within them. Please credit parents with a little sense, let them choose what sort of child care setting is right for their child, stop making all child care the same, that way providers will have a unique selling point of there own.

    Reply
    • November 16, 2010 at 9:55 pm
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      I agree with you totally Louise after 20 years of running my own nursery. I remember the days we could have fun and play and do so much more when we weren’t writing observations and next steps and learning journeys and CAFs and funding claims and courses and all the paperwork. It’s 10pm and I have just decdied to stop working . I started this morning at 7am with nursery related emails and texts on my blackberry and 15 hrs later am finishing to go to bed before I start all over again tomorrow. I fear my own daughter will have a lot of resentment towards my job as she realsies how many hours it has stolen from her over the years. What a depressing time. I would not start a nursery in 2010.

      Reply
  • October 26, 2010 at 12:17 am
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    Early years childcare is delivered from the heart. It is the best job in the world. We work with under 5’s and demanding parents to produce our best quality parenting advice and we shape children for the future and watch them grow.

    As a business, we now have to be more creative in reducing our outgoings for us to continue our level of care and also to attract new business. These are difficult financial times.. but every business is in the same position.

    My thinking then is this.. Lets share just positive ideas on this Parenta forum site. Share what works well. Share ideas.
    We have a huge amount of child care and business experience across the country.

    Jacky Roast.

    Reply
  • October 23, 2010 at 5:37 pm
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    I love owning a nursery but financially it’s very scary at the moment. My nursery is doing well in terms of the level of children accessing the provision but as in line with another provider’s comments, taking in 2 year old NEF funded children, 3/4 year old funded children, college funded children and any other government funded childcare children is making life so very very difficult. And as the other provider said, I am still waiting for funding since September and in the case of 2 year old nef funded, since June for payment. I reckon I am owed around £8K. I want to provide children from more disadvantaged backgrounds an opportunity to access good quality childcare but the powers but be make it financially not viable and will be thinking of not accepting them. From what I gather I was the only ‘mug’ in the area who would accept 2 year old NEF funded children!!

    Working with children is wonderful, but you won’t be earning a fortune and probably, like me, not much better off than your best paid practitioner.

    Reply
  • October 22, 2010 at 9:19 pm
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    I spent 3 years working with architects and a host of others designing my purpose built nursery. It took a year to build. I have fond memories of being on site in my boots and hard hat. My nursery has been open now for 5 years and has won numerous awards. I have over 30 years experience in this industry from nursery assistant , manager, managing a group of nurseries to owner of my own.

    I disagree with the negative comments made here on this blog.

    If you want to work with 0 to 5 years children then of course it is hard work. I have no time for people who buy into this industry to solely make money who have no knowledge of early years childcare.

    Reduce your outgoings, re-negotiate your contracts. Look at your staff costs. Don’t worry and don’t knee jerk reaction. . It’s like any other business in these difficult financial times.

    Find a way your early years setting can provide a top class service to your 0 to 5 children. These children will grow up to shape the future of others.

    Reply
    • November 17, 2010 at 1:15 pm
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      I’m also a nursery owner and have been running my own for 6 years, I agree cut cost, i just remeber the first days of starting up one child, two children three and so on and the same with staff two, then three if i have to cut right back to the days of opening then so be it, the days where you had very little money coming in, i pay my way daily weekly and monthly I keep on top of all the outgoings. and have happy children in my setting.

      Reply
    • August 22, 2012 at 10:40 pm
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      i have been reading your comment on here and i was glad to see that someone has enjoyed opening there own nursery because everyone else seems to think its all a bad idea.I would love to start my own nursery but do not know where to go and ask for advise i have always worked with children but since having children of my own i can not get a job in a nursery i want to do somethink rewarding.where did you go for advice
      thank you for taking the time reading my comment louise x

      Reply
  • October 18, 2010 at 3:08 pm
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    No I wouldn’t open a nursery if I was starting out in 2010!
    I have had my nursery business for 20 years and it’s provided a decent income over the years and I have almost paid for the premises so should be debt free very soon. I work really hard on the business side, have a great team of staff who deserve to earn more and have an Outstanding Ofsted.
    We are a nursery for 0-5’s and I have to say the younger ones are subsidising the older ones. I hate to think how we would get on if we only looked after Nursery Education funded children, i’m sure we would be bankrupt.
    Added to that we have a new financial headache – children who are funded by Government schemes such as Care to Learn, New Deal for lone parents and ones funded by the local college. Ive had no payments for these children yet because of beaurocracy and red tape although the children have been here since September. I will definitely think twice when accepting children paid for by government schemes in future.
    (Am also having a bad day – had the lead nicked off the front of the building over the weekend and the heating’s packed up!!)

    Reply
  • October 18, 2010 at 11:00 am
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    I have owned my group for 13 years, and I don’t know how many times I have said I’m going to sell it, then have a child come to me the next day and say they love you or have a mum thank you for all the support you have given them in changing their child. Unfortunately the reaason why we do the job used to out way the money, but the money is getting tighter and less of it which make s the other side of it less rewarding.

    I can imagine going into Tesco’s and saying “well I only want to pay 5p for that loaf and 50p for that pint because I haven’t got the money today!!” or the government telling Sainsburies that they will pay 50p for the Pint and they can’t charge anymore for it to the customer!!!
    What business is told such ridiculous amounts they will be given for looking after the most important part of a child’s life and the next generation.
    Good luck to any one who wants to spend their life on paperwork and very little money back!!!! for all the effort

    Reply
  • October 18, 2010 at 9:37 am
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    Hi,

    I worked in private nurseries for 12 years, started as a practitioner and then manager. I am currently working for East Sussex doing a job working with all head teachers and other services working with children 0-19 years.

    I would love to open my own nursery. I miss working directly with children. I have an NVQ Four in Management, which I think is essential for running the nursery and managing staff. I have two children and have struggled to find good child care in my area.
    If I opened my own nursery, I know of the pitfalls and pressures, but would hope that I could provide an excellent service for parents and children. I would definitely have baby spaces, as the need in my area is very high.

    Good luck to anyone that does open a nursery, keep the standards high and enjoy it!

    Reply
  • October 16, 2010 at 12:07 pm
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    Absolutely not! What other industry regulates you so heavily but is not actually your Employer!!! I own a Pre-School, the pay is low, the hours of unpaid work too high and the expectations of what can be achieved in 3 hours per day, 40 weeks of the year are totally unrealistic. My poor staff have so much paperwork to do and it detracts form the time and enjoyment that they should be getting working with the children. Then, i have the joy, approximately every 3/4 years of the constructive criticism of an Ofsted inspector who barely looks at the children but at the systems, etc, that are in place! Oh joy!!!!

    Reply
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  • October 15, 2010 at 7:13 pm
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    My main criticism of ‘new owners’ would be the fact that some see it as an easy profit. I have run the business side of a nursery for 8 years and when I first started I probably had enough work to fill 3 days (9am – 3pm) I actually work 5 days 9am – 3pm. I now find that I don’t have enough hours in the day to get my work done. We are in a fortunate position that we have a Nursery Manager who is on the floor and myself who is mainly office based. I don’t know how other nurseries manage their time for the managers. It is probably one of the highest legislated industries and therefore has the most paperwork of anywhere I have previously worked! Good luck to anyone starting in the industry you are going to need it!

    Reply
  • October 15, 2010 at 6:40 pm
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    I am the sole owner of my nursery and have been for the last 46 years, I love my work with children but the ever increasing paper work has taken the joy out of child care. I work from 7am – 5.30 Monday – Friday hands on with the children then go home and spend most evenings and weekends doing the paper work. My advice to anyone who wants to start their own nursery is “DON’T” rather work for someone else and let them do all the administration.

    Reply
  • October 15, 2010 at 6:10 pm
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    I’m alright Jack I have been in the business for more than 18 years and have no debts.
    What is not being funded is either rent, servicing a debt or income from the capital employed which are a major cost. I have no debts but do have a considerable amount of capital tied up in the business which is earning me nothing.
    I would not start a business today because in spite of the low interest rates I would be unable to repay the loan that I would require to start the business. I am really pleased that we do not operate in an area of deprivation because if my two year olds were being funded at the same rate as my three & four year olds I would probably go out of business.

    Reply
  • October 15, 2010 at 5:52 pm
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    I agree with the above to some extent, but nursery provision professionalised some time ago and the industry really requires mangers and owners to have some degree of business sense. Not only to ensure that their businesses are finacially sound but also to be able todevelop strategies for the delivery of high quality care.

    Essentially if the heat of professionalism is too much then one should vacate the kitchen!

    Gary Wilson

    Reply
  • October 15, 2010 at 5:36 pm
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    If the current regime of topping fees and at the same time imposing reflective practice (which requires significant amounts of PAID!! time for Early Years Practitioners) and a strict regulatory regime continues, only the very toughest (and/or most dedicated to children) will survive. Personally, I can’t see it lasting. Closure rates speak volumes. Which other industry would tolerate being forced to operate at artificially low margins?

    Many Early Years Practitioners and ‘operators’ do not have enough business sense or experience, nor time to get organised and campaign. Divide & rule all over again. The government has admirable aims and intentions, but the implementation has disenchanted many, and made them poor.

    Personally, I ceased operating our childminding practice at the end of August as it was too labour-intensive and admin-heavy for the modest income generated. Fortunately all our children found places either with another childminder (3 siblings) or within the extended opening hours of our two Montessori Nursery Schools.

    Only experienced business people have a chance of doing this successfully. How to become an Early Years Millionaire? Start with a billion and good intentions (but remember to quit in time!).

    Reply

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