When you have decided that you want to set up a childcare business, whether that be as a Childminder or Nursery, you need to do the following to set things up:
1. Do your market research
2. Get your support in order
3. Write a business plan
4. Get compliant
5. Decide on the legal structure of your business
6. Choose a business name
7. Let HMRC know you’re self employed
8. Set up a business account
9. Get your business image in order
10. Start accounting for everything
11. Sort out your work space
12. Keep costs as low as possible
13. Manage your cash flow
14. Sort out insurance cover
15. Organise your communication
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1. Do Your Market Research
This simply means find out if there is a market for your business.
Do people need what you are going to offer? If yes great! If not, then you may want to rethink your plans.
2. Get your support in order
No matter how big or small your business is, businesses are not one man or one woman enterprises. To be successful, business people need support and lots of it.
If you have children, you will have less time to spend on them and may need additional support to look after them, when you carry out your business duties, such as paperwork.
You may also find you need emotional support to help you through the highs and lows that come with running a business. Therefore, it is important to get your support in order from the outset, so that you can rely on it when you need it most.
3. Write a business plan
Once you have decided you want to go into business, you need to check that that the business idea is really viable and worth the financial investment you are going to make.
In order to make this decision you will need to write a business plan.
The purpose of a business plan is to structure your thoughts and ideas in order to work out which of your ideas will work and which won’t.
The business plan will also allow you to think about practical things, like finance and how much things will cost, what you need to do, who you need help from to run your business and to think about things you may not have thought about initially.
In short a business plan is:
– A working document – it will be reviewed and amended as your investigations progress and you learn more about the business you are interested in setting up.
– It should also be written by someone who has some knowledge of the industry
Its purpose is to describe:
– The business
– The objectives – the aims
– The market
– The strategies to meet the aims
– The financial projections
4. Get compliant
Compliance occurs in every industry and simply means following the rules of the industry you are going into.
In the childcare industry it could mean ensuring that you have the right training, the right documentation – first aid certificate etc. Are registered with Ofsted and meet all the requirements.
5. Decide on the legal structure of your business
This means decide whether you are going to go into business as:
– A sole trader – with you as the business owner and solely responsible and liable for all the business activities, even if things go wrong. In other words legally responsible if problems occur.
– In a partnership – with responsibilities and liabilities being shared between you and others if things go wrong.
– As a limited company – where your business is a company in its own right and you have limited liabilities. Meaning if things go wrong you are not solely, legally responsible.
6. Choose a business name
Having the right name can make your business stand out for all the right reasons and attract customers to you, but having the wrong name could cause confusion or disinterest heavily detrimenting your chances of success in the long run. So it is very important that the right name is chosen.
7. Let HMRC know you’re self employed
As a business owner you will be entitled to a different level of Income tax and National insurance, and will also be able to claim money back for business expenses. It is therefore important to register with the HMRC as a self-employed person to gain these benefits.
8. Get your business image in order
Like your business name you need to think about your business image. This includes the logo or symbol that will represent your business, the colours that will go with your logo and the design of your letterhead.
These need to be simple, easy to reproduce and realistically no more than 2 or 3 colours if you want to keep your printing costs down.
Your logo or brand image will be used on all your business material such as:
– Letterheads
– Emails
– Clothing to name a few.
Simplicity, should therefore be key.
9. Set up a business account
As part of your self- employed status you will need to keep records of all your incomings and outgoings. This will help you work out your finances. Your business affairs should also be kept separate from your personal finances and for this reason, you should also have a business account solely for your business activities and accounting purposes. You can have all your income paid into this account under your business name and pay for items specifically for your business use from this account too, making accounting easier.
10. Start accounting for everything
As you can claim back on business expenses, it is important that all the expenses related to the business are recorded. This means receipts, invoices and bills are also kept as evidence of your expenses.
11. Sort out your work space
In childcare, the workspace is not only where you will work, but also where the children in your care will be cared for. This needs to meet Ofsted standards and will be inspected so ensure it follows their guidelines.
12. Keep costs as low as possible
Setting up a business can be very costly, if you lose sight of the purse strings. It is very important when starting out to shop around, look for deals, discounts and get the best quality resources at the best price. After all, the more you spend the more money the business needs to make to cover those costs.
13. Manage your cash flow
Cash flow is the balancing of money coming in against what is going out. If more money is going out regularly than what is coming in, then you will build up debts which could become very difficult to pay back. It is therefore important to manage your cash flow to ensure your expenditures are covered by your income and if this isn’t the case, then other ways to increase revenue may need to be considered, or costs cut back.
14. Sort out insurance cover
As a business you may need to guard against injuries, damage, income loss and liabilities. Ensure you have the right type of cover in place for your business, to ensure you are adequately protected.
15. Organise your communication
Whether you are planning to communicate via:
– Phone
– Letter
– Business cards
– Flyers
– Newsletter
– Social media etc.
You need to think about your communication methods and prepare them.
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