Childcare centres - Who knows about them?

Hi All

Looking for someone in SS land who knows the ins and outs of childcare centres.

I am just wondering what sort of business they really are:-

How much Government subsidy is involved per child, does it differ for different age groups.

Whats the average charge per child, what age

What are the minder to child ratios

What are the expenses like - salaries, insurance, lease costs (notice some leases are written in cost per child space. If I was to venture down this path it would need to be fully managed how much hands of can be achieved and at what cost.

What are the hours they need to be open for.

And any other pertinent information

Cheers
 
Hi All

Looking for someone in SS land who knows the ins and outs of childcare centres.

I am just wondering what sort of business they really are:-

How much Government subsidy is involved per child, does it differ for different age groups.

Whats the average charge per child, what age

What are the minder to child ratios

What are the expenses like - salaries, insurance, lease costs (notice some leases are written in cost per child space. If I was to venture down this path it would need to be fully managed how much hands of can be achieved and at what cost.

What are the hours they need to be open for.

And any other pertinent information

Cheers

Hi, I can answer a couple.

Ratio 0-2yrs = 1-5

3-5 yrs = 1-10

That's why lots of places won't take kids under 3 (more expensive).
Wages. You need a director (usually a teacher) to run the place. I'm not sure of the ratio of teachers to child care workers or if, in fact you could just have childcare workers. Teachers, of course, are more expensive.

Hours- There are 9-3 preschools but most people these days demand longer hours. Some are 8-4. Others are long day care 7-6pm. The lease and set up is different for different operating licenses.

The premises will have a license for so many children, that's why the lease will mention that. To have it changed (eg for more kids) I think it needs to be passed by council (+other body?)

Sorry, not much help but a start.
I had thought about starting a centre while I was at Uni but then got a job straight away so never pursued it. I would only consider setting up one if I wanted to work in the centre. Not as a business opportunity. I think there are easier ways to make money.
 
I have a relo who managed one and a friend of a friend who owns a few.
Will try find out some details and let you know via PM this week sometime.
 
A friend of ours has in very recent years built quite a few centers here in SA (a chain) that his business manages. He tells us they are doing well and is planning on building more in the future.

I think in his case though owning the buildings and having adequate funds and cashflow would help make it less of a risk.

This was a big deviation from his usual business projects which have always been a success so I figured there's got to be money in childcare.

Sorry for the lack of detail. An experienced child care director is probably the person that can help you most regarding costs turnover as well as and mandatory regulations and policies.
 
Hi handyandy

I would suggest contacting the Private Child Care Centres Association in your State for accurate answers to your questions.

The Contracts for each business will tell you how well each business is trading, utilisation rates, operating profit etc just as any business must declare this information.

Child Care is a labour intensive business, with very little room for error.

I owned and operated a Long Day Care facility from 1989 - 1994. I traded from 7am to 6pm six days per week. I had 18 permanent staff and was registered to provide a Pre-School (Kindergarten) program.

I took babies from 13 weeks through to school age children and we offered Before and After School Care and also a limited Holiday Care program for the school aged siblings of the children in care. I also provided a shuttle service and took children to and collected them from primary school.

My utilisation rate was 95% full capacity for each licensed hour. The licence was for 35 children and we had 35 children in attendance for every hour, except Saturday.

I had a Locum Doctor attend each Friday and encouraged all staff to study and to increase their qualifications, which meant that wages rose significantly each year.

Child Care is a mixture of hospitality and education. It is not child minding. It is extremely difficult developing a team of staff which can offer good quality, appropriate and consistent care to the children and their families.

When I bought the business there was seven families / nine children attending the centre. When I sold the business there was 107 families registered with the centre.

A centre of 35 places is too small to be economically viable. I was in the process of upgrading to 65 places when I sold the business. Even 65 places would be lucky to be at break even point. If you are paying for all staff and expect a return on investment I would suggest that no less than 100 places would be the minimum to look for.

Centres are extremely expensive to run. The wear and tear factor on toys, equipment, bedding, linen, indoor and outdoor equipment not to mention staff fatigue - the Day Care Workers Award provided for 20 sick days each year, plus infectious diseases leave - means that budgets are fragile and parents expect centres to be well maintained.

In five years I used less than one packet of Bank-Aids. Safety and Security issues take vigilance, constant maintenance, and money.

Good luck if you decide to pursue this idea, but Child Care is not the cash cow that many people think it is.

Cheers
Kristine
 
sorry m8 i have not had a chance to speak to anyone yet.
A few of my employees left, and I sacked the rest lol, so been a bit busy.
I can try find out the info if u still need it.
tried to PM but your inbox is full. Clear the bloody thing out!
:)
 
kristine made the important point that centres with 65 kids or more to make money
and a good segment of that kindy age which gets more funding and needing less teachers ration is a start.

I have got friends who have started from scratch or bought ready set up centres and done well if you want that level of stress these days with the huge expectations and paperwork in accreditation.

many centres arent full to capacity and still make good money

you need to see costs for food salaries
how much you are getting per child
there was in the newspaper about a centre that the gov bailed out as it got into alot of debt because of high costs of replacement agency staff

i had some notes as this is a venture that has interested me over the yearsthese are the notes

look at it and trust your gut feelings
look at the
occupancy
rent
overheads
weekly daily fee
what set up for in each room
each age in room
competition in area
equipment old
can u work with what get
gut feeling
gotsee
certificate
by front door says registered form legally binding
go see
drive around
competition
how long been on market
280 divide by 33 equals 8 ½ (i think this is per child or soemthing)
reasonable in 100% or 90% occupancy.

good luck

there are estate agents who specialise in child care centres and will send you emails of what is on the market.
some are easier than others to deal with. some will easilly release information witha confidentiality form filled out

while others will make you see every single centre before they release any documents

i think they usually take them to the centres when its closed but its good to check them out when they are open maybe as a prospective parent and really see whats going on between staff, parents, children and capacity etc.

if you do purchase one its easy enough to do a 2 year childcare course and be able to run it yourself as thats where the money is rather than if you have to pay for the coordinator to run it.

a centre is as good as its staff is at any point in time. i've seen centres with fabulous staff and centres who unfortunately get a real shoddy staff. equipment is also important good equipment means children are busy and happy.

if there are 2 staff per room rather than one then it means there is always one stable known staff so children are happier.

paper work is important and knowing and clearing any hazards to prevent accidents.

if youbuy one its always good to watch for a while the staff culture before making decisions of what to change or who to keep and who to give a warning to or fire.

also have some sort of safety for cameras and items that are costly that seem to 'walk' in centres. sometimes they are just misplaced but sometimes they 'walk'. dont leave them lying around. you never know when a shoddy parent or staff decides to take them and it does seem to happen alot and its a horrible experience.some centres provide lockers for staff which can prevent stealing.

training is important and meetings to make sure everyone knows about all the acrreditation details and expectations and yes ongoing training.
like with any business there are rules and systems for everything and booklets that say what they are.

and also beware of new rules that mean that a centre that used to be allowed 65 children is now allowed less wihtout renovation or that there isnt enough space for the renovation.

good luck
 
Hi Handyandy,


I have a couple of golden rules regarding whom I do business with....anything to do with the below are definitely off ;

Children
Anyone on a pension (aged / disability / veteran / single mothers etc)
Church groups
Community groups
Families
Poor people



Why - because the other side of the Contract will ALWAYS put their emotive, humanitarian and safety aspects above the cashflow commitments they have made to you in the Contract. Forget signatures on paper - you are squarely in the realm of "feelings".


A child care business incorporates multiples of the above groups with a litany of safety and legislative commitments, all wrapped up in a delicious parcel of motherly emotion and baby development and care.


Nowhere in that mix as an investor is your capital outlay and cashflow concerns......you'll be hung out on a limb quicker than they can yell at you "you uncaring heartless cruel bar steward".


What's the attraction for you ??
 
because the other side of the Contract will ALWAYS put their emotive, humanitarian and safety aspects above the cashflow commitments they have made to you in the Contract. Forget signatures on paper - you are squarely in the realm of "feelings".
A child care business incorporates multiples of the above groups with a litany of safety and legislative commitments, all wrapped up in a delicious parcel of motherly emotion and baby development and care.

hehe, and I'm being called the heartless jerk... :eek:
But it's a good & valid point.
 
hehe, and I'm being called the heartless jerk... :eek:


Don't take it to heart P&B.


The big Landlords of the world, such as McDonalds / Catholic Church / super funds and instos are NOT particularly reknowned for being the caring sharing type. I'm yet to meet a chairman of a super fund or the principal trustee of an institution who gives two hoots about the other party not fulfilling their contractual obligations. No sob stories allowed.
 
It has it's roots (at my best guesstamation) 55ad with Epictetus, the stoic philosopher.

James Stockdale

The philosophy of Epictetus is well known in the American military through the writings and example of James Stockdale, an American fighter pilot who was shot down over North Vietnam, became a prisoner of war during the Vietnam War, and later a vice presidential candidate. In Courage under Fire: Testing Epictetus's Doctrines in a Laboratory of Human Behavior (1993), Stockdale credits Epictetus with helping him endure seven and a half years in a North Vietnamese military prison - including torture - and four years in solitary confinement.[20] In his conclusion, Stockdale quoted Epictetus as saying, "The emotions of grief, pity, and even affection are well-known disturbers of the soul. Grief is the most offensive; Epictetus considered the suffering of grief an act of evil. It is a willful act, going against the will of God to have all men share happiness" (p. 235).

James crediting Epictetus's philosophy with helping him survive.

Philosophy of using/not utilising emotion as a tool. Disturbers of the soul.

Pretty impressive mind development strength.

http://en.wikipedia.org/wiki/Epictetus
 
my friends who run child care centres earn 100 000 p/a after all the expenses and loans, even when they are not full to capacity.

I have seen some centres chasing down parents for payment

others i have seen in their policy books allowances to throw out families who are not fulfilling their payment obligations.

if the policies are clear then it should be much less emotional.
 
my friends who run child care centres earn 100 000 p/a after all the expenses and loans, even when they are not full to capacity.

I have seen some centres chasing down parents for payment

others i have seen in their policy books allowances to throw out families who are not fulfilling their payment obligations.

if the policies are clear then it should be much less emotional.

I reckon getting paid would be fairly easy;

when they sign up their child, they receive a list of conditions and the policies.

One of them would be "failure to pay the bill on time will result in your child not being allowed to come here."
 
child care is a massive amount of work

the laws are many and complicated and expectations so high

the burn out and turn over rate of staff is often so high

they have to work incredibly hard for low pay


the repercussions should you make any mistakes can be massive


the paper work is mind boggling

the accreditation so stressful,
centres are often rated highly on areas they feel they dont perform in and rated poorly in areas they know they are thourough in

nevertheless
it can be a good income if you run it yourself
it can be extremely enjoyable if you are good at it, rewarding and full of massive amounts of appreciation unlike any other business.
we are after all caring for peoples most prized assett their children, and its young children so its not like older kids that are dropped off at school, the parents actually come in daily chat often about anything going on in their life and often become very close to staff and coordinator. staff can enjoy this friendship or abuse it and talk behind parents backs backstabbing and finding faults. I know centres that have a rule never to talk behind parents backs.which makes a very positive climate.

even the most nurturing and high quality centres will get a couple of really problematic parents every decade or so at least, not to mention yes some very challenging children. and it can be a very emotional industry, one parent may handle their child being bitten or hurt by another child which can occassionally happen, easily and another will threaten to sue.

the paperwork means that i have seen staff so busy having to find out and document so many details of a hazard or accident that they are preoccupied and more accidents happen. the amount of paperwork is staggering.

However i dont know if there is another industry where if run well, the parents beccome so close and so incredibly appreciative.

it is very demanding, not for the fainthearted.
 
child care is a massive amount of work

the laws are many and complicated and expectations so high

the burn out and turn over rate of staff is often so high

they have to work incredibly hard for low pay

the repercussions should you make any mistakes can be massive

the paper work is mind boggling

the accreditation so stressful,

it is very demanding, not for the fainthearted

....nevertheless....


Holy smokes Francine....don't worry about the stuff after nevertheless.....I was out the back door and gone after the first four negatives. It looks as though Handyandy also buggered off and never came back as well.
 
Hi Andreas,
Around 150m from us, a young guy has been building a long day care centre.
Its taken 2 years from start to finish.
One other thing to factor in is the amount of neighbour protest.

I very much doubt this guy has made much profit , thanks to us neighbours making it difficult for him (we protested on grounds of car parking, positioning of the centre right on a dangerous corner , and the fact we are a very quiet neighbourhood with an oversupply in the area of these centrees amongst other things).
This guy has deliberately cut corners as much as he possibly could - examples -
Single glazed windows (not doubled as asked for)
Acoustic fencing (he put normal fencing)
Double brick (he put single brick and bagging) - and the list goes on.... However the biggest cost wouldv'e been the interest charges as the development has gone way past his target date.
So my advice (apart from all the good posts written) would be to get the neighbours onside from the start , and do it somewhere you don't upset too many people !!
Good luck !!
David
 
I am still looking at this thread and pondering my navel.

It certainly would not be my intention to build a centre but to buy an established one with management already in place ie not owner operated.

This was why I am seeking info (and profitability) related to running one as a business.

The info thus far has been great.

I take your point re working with kids etc ;):D but way back when we had small kids you were very dependent on the centre to mind the kids so collecting payment shouldn't be that hard. Certainly don't get involved in the sob stories - no pay, little Johny is out and little Margaret takes his place.:rolleyes:

I was amazed that parents even have to pay for days that the kids aren't able to attend. It makes sense from a business pov and they pay just to ensure the position stays open.

The other angle that we are interested in is to own the RE but I would want to ensure that the business is a good business and you never know when the operating business hits the wall and the tenants centre falls into your lap. Be prepared on both levels.

Cheers
 
yes i beleive parents have to pay for times that children cant attend even when it could be that they go overseas for a while, if they want the place when they come back.

if a centre isnt full to capacity they may not tell a parent to go for non payment as they may hope the parent will pay and if they arent full anyway they may take the risk.

when various reno vations or changes need to be done or happen by law, some times they are told to make certain changes and they pay and do them, and then another worker comes out and tells them to do other changes and it goes on and on instead of being told everything at once.

remember the people who come out to tell you to do changes have to keep their jobs and thats what their job consists of so sometimes it looks almost like they are looking for more things to tell you to do just to keep their jobs. i heard this from someone inside, a professional it wasnt something i made upand i saw it with the experiences of people i know.

yes i do know a friend who had to put in sound proof fences etc to satisfy neighbours and she did.

francine
 
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