Childminding involves looking after other people’s children, usually in your own home, on a professional basis. (‘Home childcare’ involves registered childminders looking after children in their parent’s homes. ) As a professional childminder, you will operate as a self-employed business person. As with any other business venture, setting up a childminding business will require some financial planning. There are also practical and legal matters to take into account. This Business Guide will help you to complete your cash flow.
The topics listed under Income and Expenditure relate to fields in the cash flow section of the Business Plan. Cash sales ‘Cash sales’ means all income from your main business activity which is received either in advance or on the day when you carry out childminding services. For the purposes of completing a cash flow projection, Cash sales will also include payments received at the end of each week in return for looking after children during that week. While some of your customers may pay you in cash, remember that Cash sales can also include cheques, childcare vouchers and debit or credit card payments if you decide to accept these.
Estimating your income To prepare your cash flow, you need to estimate how much income you will receive over the next 12 months, and when you will receive it. To do this, you will need to: decide how much you will charge for your services, and what your normal payment terms will be decide what your hours of business will be. For example, for how many hours per day will you agree to look after children, and on how many days each week find out how many children you will be able to look after.
Your registration certificate will specify a maximum number of children, depending on your circumstances estimate how much demand there is for your services. For example, do you anticipate that you will normally have the maximum permitted number of children in your care decide if you’ll offer ‘free’ places for three and four year olds. Your local authority may not reimburse you as much as you would normally charge for these places Bear in mind the following points when you make your estimates: certain times of the year are likely to be quieter than others.
Many families take summer holidays together during July, for example the level of demand for your services will be affected by the amount of competition in your area your charges are likely to reflect the local ‘going rate’. However, you might consider whether there is demand for a ‘premium’ or quality-assured service at a higher than average rate – and think about what will set your childminding business apart from your competitors as with any other business, you will need to market your services to potential clients.
Think about how you will advertise your business effectively Doing some market research will help you to make your estimates as accurate as possible. Growing your business As with any other business, there’s no reason why you shouldn’t be ambitious when you start up your childminding service. You could aim for the highest standards of professionalism, fees that reflect the high quality you provide and a bookings diary that’s always full. However, one thing you’ll have to accept is that there isn’t much scope to expand a childminding business.
You’ll be limited by the maximum number of children that you’re legally allowed to care for at any one time. There are also limits on the number of childminders who can work together on the same premises. If you go over the limit you’ll need to comply with a different set of requirements because you’ll be classed as providing ‘childcare on domestic premises’ instead of being treated as as a childminder. To help with your decisions, click on the checkpoints for guidance. Once you have worked out a Cash sales figure add it to the relevant field in your cash flow forecast.