Frequently Asked Questions
- Do I need planning permission to open a nursery?
Q. Do I need planning permission to open a nursery?
A. The majority of start-ups will need to apply for planning permission or a change of use if the premises have been used for an alternative business, contact your local planning department who will be able to advice you. The majority of planning applications are now completed on line. The planning regulations are being relaxed to allow childcare to open in premised previously used as office space,care homes etc.
- How do I work out the occupancy of my nursery?
Q. How do I work out the occupancy of my nursery?
A. To work out the occupancy level of your nursery you need to know the total number of hours available for sale against the actual take up of hours sold. Don't fall victim to the illusion that you are doing well just because you have a lot of children on the books. Occupancy isn’t how many children are ‘On Roll’, but how many Childcare hours you are actually managing to sell
Example 24 place nursery open 5 days 10 hours a day, so they have a total of 1200 hours available to sell they have sold 746 hours
24 places x 5 days x 10hrs = 1200 divide by 746 x 100 = 62.1% occupancy It’s not very complicated to do once you have a system and a routine set-up. All you need is your registers, a calendar, and a calculator or a computer spread sheet. This should be done as ‘best practice’ by the Manager, Owner or Committee at least as a monthly exercise (though weekly would be even better!). And then compare this month to last month - and to the equivalent month last year, and so on - to see what’s different. This should prompt you to ask yourself “what if anything has changed and why?"
- I spend hours working out the monthly invoices for parents...
Q. I spend hours working out the monthly invoices for parents, only to find parents then question the amount they are asked to pay.
A. I find this a quite a common problem, often made more complicated when providers have a complex fee structure and are using pen and paper rather than a computer based system. Obviously you need to make sure you are collecting the correct level of fees, and are able to demonstrate clearly to parents just how the invoice total was achieved.
Using a computer based system is the simplest way of achieving this, there are lots of commercial products on the market which help with the administration of running a childcare business, and I would recommend you look at purchasing one of these. However these solutions can be costly, as an alternative, I can provide an easy to use low cost system, that is guaranteed to save you time, provide accurate calculations and enable you to answer parental queries easily, contact me for details
- How do I work out the unit cost of providing 1 hr of childcare?
Q. How do I work out the unit cost of providing 1 hour of childcare?
A. You add all your annual fixed and variable operating costs; including staffing costs; together and divide by the number total of your hours open per week multiplied by number of weeks open, then divide this figure by the number of places you are registered for, this will give you the overall hourly unit cost for all age groups
To calculate the unit cost for each age range; 0- 2yrs, 2-3yrs and 3 -4yrs; calculate the annual fixed and variable operating costs including none childcare staff costs, i.e. cook, cleaner, manager (if not counted in the rations), caretaker etc. Divide this total by the number of age ranges, usually 3; this will give you a sub total for each age group. Calculate the childcare staff costs for each age range and add to the sub total for each age range. Finally you divide the total for each age range by the total annual hours available, this will provide the unit cost for each age range
EXAMPLE to calculate the unit costs for a 9 place baby unit, open 52 weeks a year, 5 days a week, 10 hours a day (2600 x 9places = 23,400 hours annually)
Annual overall non childcares costs are £33K divide this by 3 (number of rooms) = £11K for each room, add childcare costs for 0-2 year’s room of £83K = £94K annual costs for the 0-2 year room.
Divide £94K by 23,400 hours, = £4.01 this is your hourly unit cost
- Should I be using social media as a marketing method?
Q Should I be using social media as a marketing method?
A. Yes. Childcare needs to embrace all forms of social media, twitter, Facebook, LinkedIn, and of course a website, they are all free tools, (or almost free) that will help raise your profile and help market your business.
- Is my Profit and Loss statement useful to me?
Q. My accountant provides me with an annual balance sheet and profit and loss, is this useful in managing my business?
A. Not really, it is needed to submit to HMRC and Companies House (not sole traders) to be able manage your business effectively you really need to understand your key financials ratios, which would include Sales growth, Gross profit %, operating profit % , breakeven. A management report will provide this information.
- Does Ask Askew provide single hour support?
Yes! Support on a per hour basis is available. Usually this would be delivered over the telephone or via Skype. Setting visits will incur travelling fees.