How to Start a Home Based Childcare Business

Starting a Home Based Childcare business can be a lucrative venture, but it requires careful planning and execution. Let us guide you through the critical steps, so you can build a thriving childcare business that makes a positive impact on young lives!

 

1. Overview
2. Pros and Cons
3. How much can I earn?
4. Regulations and required qualifications
5. How much does it cost to start a childcare business?
6. Choice of Business Structure
7. Making a business plan
8. Branding and how to market your childcare business
9. More red tape
10. Conclusion

 

The UK is the third-most expensive country for childcare in the world, based on a couple earning the average wage, according to data from the OECD. Staggeringly, childcare costs have risen by nearly 6 per cent over the past year, whilst the availability of places has fallen.

So horrified were parents that this prompted thousands of people to protest across the country in what became known as the “March of the Mummies” in October 2022.

The latest survey carried out by the charity Pregnant And Screwed finds that childcare in the UK can consume up to an extraordinarily whopping 75% of parents’ incomes, with the average cost of a full-time nursery in Britain coming in at about £14,000 a year, but it can be double that in London and many other areas of the country.

 

 

• Potential Annual Revenue: £20-60,000 depending on how many children are in your care
• Startup Cost: £600-2,000
• Time To Revenue: 2-3+ months 
• Annual Market Growth Rate:     %
• Best for: Hard working, child loving, trustworthy entrepreneurs

 

Bearing all this in mind, the demand for childcare is on the rise with many parents desperately hunting for free places in their local areas.

If you are organised, focused and committed to running a safe place for young children to thrive and grow, childcare can be rewarding both financially and emotionally. 

Whether you’ve previously been in the education sector and are looking for a challenge or this is a brand new idea, starting a home-based childcare business can be a great way to work from home. Simultaneously, you will be providing a valuable service to families in your community, but you must be totally dedicated to your business.

Childcare can be very profitable and if you are organised and resourceful you can start up your own business at a low cost. 🙂

 

Before you throw open your front door, here are some pros and cons to keep in mind:

 

6 Great Reasons to Start a Home Based Childcare Business

• Low Overhead Costs: Running a childcare business from your home typically requires lower overhead costs compared to leasing or purchasing a commercial space.
• Convenience: You can enjoy the convenience of working from home, which can save you time and money on commuting. It’s also easier to balance work and family life.
• Personalised Care: Home-based childcare often allows for more personalised and individualised care for children. You can have a smaller group of children, which can lead to stronger relationships and tailored educational experiences.
• Family-Friendly Environment: Parents may prefer a home-based setting for their children as it can provide a more comfortable and familiar environment compared to larger day care centres.

• Flexible Hours: You have the flexibility to set your own hours and schedules, which can be advantageous for both you and the parents you serve.

• Annual Growth:  Retain business from year to year with new siblings

 

6 Common Challenges when Starting a Home Based Childcare Business

• Licensing and Regulations: Operating a home-based childcare business often requires compliance with local and national regulations, which can be complex and time-consuming to navigate.

• Limited Capacity: Your home may have limited space, which means you can only care for a small number of children. This can limit your income potential.
• Income Fluctuations: Income in a home-based childcare business can be inconsistent, especially if you have part-time or fluctuating enrolment.
• Safety and Security Concerns: Ensuring the safety and security of children in your home is a top priority. This can be demanding and may require additional safety measures.
• Catering: Most day nurseries/childminders provide 3 meals a day. Do you have the facilities to do this? 
• Unpredictable Hours: Childcare often involves working outside of standard 9-to-5 hours, including evenings, weekends, and holidays, which can disrupt your personal life.

 

 

How much can I earn running my own home based childcare business? 

This is linked mainly to how many children you are caring for. 

How many children you can look after depends on a few things. What’s the size of your home? Do you have children of your own? And will you be working alone? 

 

Do your research. What are other childminders in your area charging per hour?

Younger children, under 2 years old are more time consuming and expensive to care for, therefore you can charge more for their care. 

According to the Childcare and Early Years Provider Survey 2022 on the Government website the average cost per hour of an child under 2 years old is £5.36

The average cost of sending a child to a private day nursery in the UK is £53 per day or £263 per week.

However, these prices can vary significantly, due to your location, full time or part time attendance and the age of the child.

There are many factors to consider when you are starting up, such as establishing whether siblings would be discounted and what facilities and equipment you can offer your customers.

Are your fees set in stone or are they variable if a child is very ill? Do you charge extra for early drop offs or late pickups? 

Are meals included in your price? Do you charge for providing nappies and milk?

How many children can you care for?

A single childminder may care for a maximum of six children under the age of 8. Of these six children, a max of three may be ‘young children‘. Children are classed as ‘young children’ until 1st September following their fifth birthday. Only one child can be under a year old. 

In certain circumstances, exceptions to the above rules may be permitted, as long as levels of care can still be maintained for all children.

Only wanting to care for little ones? You can only look after 3 children under 5 at one time. But with an assistant, and if your house has enough room, you can let another 3 children join the fun!

 

Regulations and required qualifications

All day care centres are regulated and have very strict guidelines

These guidelines are for England. Please contact your local council and independent regulator for more information in your area. 

In Scotland, a childminder must be registered with the Scottish Care Inspectorate and in Wales with the Care Inspectorate Wales.

 

In England, you must comply with the Early Years Foundation Stage (EYFS), which safeguards the welfare standards for the care and development of children aged up to five. 

 

• You’ll need to have a Disclosure and Barring Service (DBS) check beforehand, along with everyone else you live with over 16. Be aware that Ofsted will only accept a DBS certificate within 3 months of the issue date. 

 

•  You will have to fill out a Government Childcare and Children’s Social Care Health Declaration Form before you register with Ofsted to look after or care for children. You’ll need to fill in parts A and B1 then print it off and take it to your GP for approval and completion. Your surgery can charge you for this service.  

 

• You must complete the relevant training for the age group you will be caring for. Your local council can help you find the course most suitable to you. This will help you understand and implement the early years foundation stage (EYFS) before you register with Ofsted. There are many courses available online.

 

• Early years education providers must meet the paediatric first aid requirements set out in the statutory framework for the early years foundation stage (EYFS)

 

First aid training is available from a wide range of providers including St John Ambulance, the British Red Cross and St Andrew’s First Aid, who together are acknowledged by HSE as one of the standard-setters for currently accepted first aid practice for first aid at work training courses.

It may also be helpful to refer to HSE’s guidance about choosing a first aid training provider.

 

• Registration with Ofsted.

  There are two registers; the Early Years register  for children aged 0-5 years and the Childcare register (which has a compulsory and voluntary part) for children aged 5-8 years old. For further details about the requirements of registering on both the Early Years and the Childcare Register visit the Ofsted website.
  You will need a home check by Ofsted to determine whether your home is suitable and complies with safety regulations before completing the registration process.

More information about when and how an inspection will take place consult the Government website 

Your Ofsted review can be found on their website. Many prospective parents will look here when choosing a child milder. See it as an opportunity to showcase your business.

 

• You will need to register with the Information Commissioner´s Office (ICO)

The ICO is the UK’s data protection regulator. Your businesses has to keep digital information about the children in your care and pay an annual fee. Families will see that you care and are taking data protection seriously by registering with the ICO.

• You must register as a food business with your local authority if you provide the children with meals. You will then be inspected to ensure food hygiene standards are being met.

 

Thoroughly check regulations, licences, and legal cover that you require as these differ depending on whether you’re going to be based in England, Scotland, Northern Ireland or Wales.

 

From registering your company, establishing your brand to marketing your services, we’ll cover everything you need to know to help you turn your creative talent into a childcare business.

 

How much does it cost to start a childcare business?

 

Depending on what level you intend to set out on your start up costs can vary quite a lot. Prices as of Sept 2023

The above regulations will have to be paid for before you can start. 

The DBS check is currently £38 ( renew annually)

A pre-registration training course can be pricey, enquire with your local council they could offer discounted courses. 

Your GP medical check can vary in price and paediatric first aid courses vary between £50-200. 

The Ofsted registration fee is £35 to care for children aged five and under. For children aged five and over only it is £103. If you are going to care for children of all ages, then the fee is £35. 

The ICO registration is £40 per year – it must be renewed annually

You may have to make alterations to your house. Safety is paramount and you should have an electrical, gas and fire inspection. Ofsted can ask for these certificates. 

Your house must be baby/child-proofed. This can be costly so why not search on second hand websites and ask friends and family for monitors, baby gates etc. Car seats should be new. Have you considered CCTV? 

Then there are toys, games, beds/cots, nappies, music and TV equipment, outdoor games and the normal mountain of everyday paraphernalia  you need to look after a child.

Your snack and meal costs must be incorporated into your budget. Buy in bulk and plan your weeks nutritional menu ahead. Food allergies and dietary restrictions must be noted and catered for carefully.

Insurance is very important. There are many Insurance companies offering specific Childminder Insurance Packages, which include public and employers´ liability insurance so compare their prices.

 

 

How I’d set this childcare business up.

So do you think this sounds like the business for you?

Here’s how I’d make sure you get off to a stress free start.

Choice of business structure

This is fundamentally important when you are setting up any business. As a solopreneur, you can start this business as either a sole trader or a limited company.
I’d also strongly consider a hybrid startup structure where you can reap the benefits of both structures with minimal cost and risk.

This could enable you to start trading with the simplicity of a sole trader but also have secured the limited company for marketing hacks and saving tax later if you decide to incorporate your business.

Not thought of a company name yet? Use our FREE Company Name Checker Tool and find your memorable name. You’ll be searching through a huge database of over 5 million registered company names and over 11 million UK domain names.

 

If you are unsure what to do at this point I recommend seeking professional advice, WE can walk you through this in a clear and concise way you will understand. 

 

Create a strong business plan: 

Start this by asking yourself plenty of questions. 

Have you undertaken any local market research to see if your proposed services are required in your area? 

Is your property suitable to operate a childminding business from? Is your kitchen suitable for child meal preparation?

What type of childcare service are you considering offering? ( full day care, sessional care, term time only, after school clubs, breakfast club, holiday play schemes)

 

A business plan should outline your goals, target market and services you will offer plus and financial projections. This will help you stay organised and focused as you start your business. 

There are different types of business plans. Take a look here for your 1 page easy to use business plan.  It’s designed to cut the waffle but has enough detail to make it a meaningful tool so that you remain laser focussed on what needs to be done when you set up this business.

 

How to market a homebased childcare business.

This is a business that I would definitely want to fast-track from the beginning for growth. You want to get busy as quickly as possible and there is only one real way to achieve this.

Most potential clients are going to use Google search to find childcare for their little one. Sure some will use an app, some might ask for a recommendation on social media but MOST will look on Google.

Google knows that when someone is looking for a childcare service, they want to see results close to where they are located.

This usually means that Google will show a maps listing at the top of the search results like the image below.

 

If your business shows up here then you are right at the top of the search results, under the nose of people who want to find a childminder business.

For any type of business/search term where Google shows a Maps listing like this , I describe these businesses as having “high local marketability”.

High local marketability means if you know what you are doing and tick the right boxes with Google you can get a lot of business enquiries very easily.

 

So if potential customers can’t find you on Google, they won’t be calling you. And guess what? That means someone else is picking up that parent and you’re missing out!

 

So how do you dominate Google search results for this business?

You have to optimise for the Google maps listing.
How do you do that? 

 

Follow these 10 simple steps to marketing your homebased childcare business:

1. Get a website. Make sure it complies with Google’s best practice guidelines.
2. Get your new website in Google so clients find YOU.
3. Provide LOCAL PROOF. Use a local phone number to tell clients and Google you are definitely a local business.
4. Provide SOCIAL PROOF. Show reviews from real customers on your site. This is called “social proof” and turns browsers into clients!
5. Use LANDING PAGES. A landing page is optimised for a specific search term making it rank higher than your competitors. Landing pages are for people who want to buy your service now. They show the client what they want to see
6. Provide great CTA’s (CTA =call to action). Make it super easy on your website for clients to get in touch with you by including features such as a messaging/chat app and CTA’s that show clients exactly how to contact you.
7. Share FEEDBACK. Go the extra mile to provide an outstanding service and you are sure to collect plenty of positive feedback from clients. Ensure you harness this by collecting reviews from every new parent/guardian.
8. AUTOMATE – You won’t have time to be manually updating your website. Make sure you automatically show the new reviews on your website, driving more clients to your business.
9. PROMOTE – Regular updates to your website and using Google tools will give your website an extra edge.
10. MAINTAIN – From time to time websites need technical maintenance to the software they run on to keep peak performance.

 
Most childcare businesses DO NOT invest enough time and money to execute this simple marketing  strategy providing you with the opportunity to step in and DOMINATE in the local search engine results.

 

The Live Chat Function is great as it gives your potential customers a “one click method” to message you straight from your websites – you get the messages on your usual Messenger account, this is probably something that your local carers won’t have and we’ve had clients getting great success using this tactic. Make it easy for your potential clients to get in touch with you. 

 

Still confused? We can create a personal website for you to get you off to the best start. 

 

Always ask for references and reviews on your website. This is so important for new customers looking for a reliable carer. Get the ball rolling, offer an afternoon of free childcare or at a reduced rate for friends and family.

Google reviews, testimonials and recommendations are essential. Potential customers WILL check for reviews when they are searching for a service, product or trade. 

This is difficult when you first start out and asking can be uncomfortable but a happy customer will want to help you up the ladder every time. 

 

 

 

 

 

Building a strong reputation and trust with parents takes time. Be patient and persistent in your marketing efforts, and over time, you’ll see your home-based childcare business grow.

 

Here are 8 great tips to help you market your childcare business effectively:

Promoting your business is crucial to attract new customers and grow your business.

Remember! You will need to advertise your business yearly. Children will be leaving when they reach school age and may not return for after school care.

 

• Do your research:

  The childcare business is competitive, so it’s important to research your competitors in your local area and identify what you can offer that others don’t. This will help you differentiate your business and attract more customers.

 

Do you have a qualification in STEM, early language development or SEND education? Can you offer art or music classes? Focus on what you do exceptionally well . This could be the factor that makes you stand out from the rest. 

Highlight these offerings to attract parents looking for specialised care.

 

• Create a great company and domain name for your website :

  Choose a name that is related to you and your business and is memorable for your potential customers. Remember to steer well clear of similar sounding names so confusion does not occur with other companies. You can do easily this by using our Company Name Search.

 

We can quickly and easily help you get the ball rolling with this, registering your company and domain name and even providing you with fully featured business email boxes making your business look more professional, adding credibility when you are approaching new customers.

So instead of emailing from an @yahoo or @hotmail address you can be emailing from @mycompanyname. Doesn´t that look better? 

Then head to our easy to use domain checker and let´s get you onto the world wide web!!  

 

 

• Create a website:

  A website is essential in business today. Showcase the range of services you offer and give clear and correct pricing, hours of work and contact details. 

Photos and videos are fantastic for a more attractive website! They give lots more information about your business and what you have to offer.   

A little information about yourself can make the business more personal and boost customer confidence. Here you can introduce yourself and give your experience and qualifications.

Also make sure your website is mobile-friendly.

 

 

Obviously there are rules and regs around using content featuring children in your care, including getting parents permission and not naming the child. Do your research first. 

And don’t forget to add all reviews and comments to your website – I can’t stress highly enough how important reviews are.

 

• Word of mouth is a powerful and effective marketing tool and should never be underestimated! 

A lot of your business will come from clients recommendations so encourage them to comment on your website and social media platforms. 

Attend a local parenting group,  community event or childcare-related conferences with a willing parent and network!  Building a strong local network can lead to plenty of word-of-mouth referrals.

• SEO:

  Search engine optimization is the art of getting your childcare business website to the top of the search results on Google and the other search engines so that you have the best chance of getting the business. 

If you’re new to running a website it’s easy to get caught out with a low cost SEO service that just doesn’t work.

We can help put together an affordable SEO package and we’ll always tell you what we are going to do and what results you might expect to achieve.

 

Unsure where to start with a website? Just ask us. We can help you create a website that will attract new customers and boost your local marketability .

 

• Design an eye-catching logo:

  Your logo is an important aspect of your professional brand identity. Therefore, it’s essential to design a logo that represents you and your business and can be used everywhere, including your workwear, car, business cards and leaflets. 

 Once you have been registered with Ofsted and assessed make sure it is prominent on ALL your marketing materials. Another good source of information and a good association to be a member of is PACEY. This is the Professional Association for Childcare and Early Years, a charity dedicated to supporting everyone involved in childcare and early years to provide high quality services, information and advice to children, their families and carers. 

• Use social media: 

  Your advertising  will focused at your key demographic. Social media platforms such as Facebook, Twitter/X, Instagram and TikTok can be powerful marketing tools and cost nothing.
  So shout out loud what makes you and your business unique! Join local business Facebook groups or similar platforms to promote your business and connect with potential customers. You can also create social media pages for your business and post regular updates, photos, and promotions to attract more parents/guardians. 
  Consider weekly parenting tips, nutritional recipes, new games or activities that can be done at home. 

Run competitions or implement a referral programme that rewards current clients for referring new families to your childcare service. Offer discounts or other incentives as a thank you for their referrals.

Continue to reach out to other businesses that work with babies and children.  These relationships can be mutually beneficial if you both make recommendations. Ask to leave leaflets in soft play areas, cafes and shops etc. 

The rules and regs applied to your website using content featuring children apply here as well. 

 

• Use apps:

  There are many apps available that can help you manage your business more efficiently. You can use apps for booking appointments, saving customer details and receiving payment.  

 

By implementing these marketing strategies, you can attract more customers, improve your brand identity, and grow your home based childcare business.

 

Other formalities that you will need to complete before you can open up your doors.

As well as registering your company and preparing your business plan ….

 

Open a bank account

Keeping your personal and business finances separate is crucial for several reasons. It simplifies accounting and bookkeeping, making it easier to track business expenses, income, and tax obligations. It also helps demonstrate financial transparency, which can be important for legal and tax purposes.

How about a  contactless card payment machine? There are plenty on the market now and easy for you and your customers to use. 

You will need Insurance

Anyone trusting their child in your care will expect you to demonstrate that you have comprehensive business insurance cover.

There are many insurance companies offering specific Childminder Insurance Packages. Make sure you have a good look around and take their advice.

Public liability insurance is crucial to protect yourself and your children, providing cover against injury or accidental damage to their property. 

If you employ someone Employers’ liability insurance is essential to cover any injury and illness sustained whilst whilst being employed by you, 

Then there is insurance for all your office equipment, i.e. toys, furniture etc protecting you from theft, damage and loss. 

Inform your insurance company that your car is a works vehicle if you are picking up, dropping off or using your car for trips out. Obviously you will have your eye-catching logo and contact details  displayed prominently!

 

Conclusion

Starting your own home based childcare business can be a lucrative and rewarding venture. 

From obtaining the necessary licenses and certifications to creating a safe and stimulating environment for children, there’s no doubt that it requires dedication, preparation, and a genuine passion for childcare. However, the potential rewards, both personally and professionally, are well worth the effort.

Establishing yourself in your local area can take time. But, by using our successful marketing techniques and providing children with a secure and caring atmosphere you will not only provide a valuable service to families in your community but will also allow you to pursue your passion for childcare while generating income from the comfort of your home.

As you start on this new journey, remember the importance of ongoing learning, staying updated with childcare best practices, and adapting to the evolving needs of both children and parents. There are many free online courses available, including courses in child mental health, child psychology, autism or SEND.

So, before you take a felt tip pen and colouring book and start drafting your business plan, learn more by registering with us today!