Setting Up

In deciding to set up a childcare facility there are many issues to consider and this section aims to assist you with these, step-by-step.

First of all – Is it for you?

Starting a new business is not something that should be taken lightly. It can mean an increase in responsibility and a simultaneous decrease in security.

It also means that you will often have to become proficient in a range of areas, in which you may have very little experience, such as accounting and HR. Becoming self employed requires technical competence, energy and an appetite for risk.

If you are seriously considering starting your own service it is worth talking to other people who have already done it – ask relevant questions and get advice.

Join Early Childhood Ireland

One of the first things to consider when setting up a childcare service is joining Early Childhood Ireland, if you have not already done so.

Early Childhood Ireland supports and represents the people who play a role in the development, delivery and oversight of early childhood care and education in Ireland, and prioritises the interests of children. We are also able to provide professional support and training for early childhood care and education providers, contributing to research and public policy development, promoting quality, accessible childcare for all children, exploring innovative and creative child-centred approaches to childcare.

Conduct a Feasibility Study

Once you have carried out some preliminary research and you are confident that you are ready for the tasks and challenges involved in starting your own childcare setting, it is a good idea to conduct an in depth feasibility study to delve deeper into the childcare market. A feasibility study will address the question as to whether there is there a need for a service in your area and will allow you to identify childcare needs in the area where you plan to open your childcare service. Some useful ideas on gathering information to identify feasibility are as follows:

  • Contact your local County Childcare Committee (CCC) and the Health Service Executive (HSE) to see what services currently exist in your area and the types of services offered. Do these services have a waiting list?
  • Check the latest Central Statistics Office (CSO) statistics for your area
  • Find out what new housing, commercial or industrial developments are happening in your area.
  • Check with your local primary schools for the enrolment figures
  • Check with your local County Council website for any planned housing developments in the area
  • If developing a community (not-for-profit) childcare service, establish a committee – ask parents, members of the local community and any other interested bodies if they would like to be interested in participation in the services’ committee.
  • The Department of Jobs, Enterprise and Innovation provides financial assistance to carry out studies such as these, in the form of a feasibility grants for assessing market interest and demand for new products and services.

Tax Responsibilities

When you are starting a new business it is vital to make sure that you are fully aware of the related tax responsibilities that this involves. If you find these new responsibilities daunting initially, it might be worth seeking the advice of a professional to get you up to speed. This will enable you to establish a framework that you can build on in the future.

For further information please visit the Tax and Self-Employment page of our website.

Registering with Tusla

It is a legal requirement for all early years services proposing to operate from the 30th June 2016 to make an application under section 58D(2) of The Child and Family Agency Act 2013, at least 3 months before it is intended to commence operation ( except in the case of a Temporary early years service in which case at least 21 days notice must be given).

See the Tusla Registration webpage for details : http://www.tusla.ie/services/preschool-services/new-providers.

Registering your Business

The legal structure that you choose for your business could effect the corporate rules you must follow in relation to your accounting, tax, the records you keep and the personal liability you will have.

In order to set up a company with the Company Registration Office  you will need to complete form A1 which contains a range of details about your business, such as the company name, location, directors and their shares.

Premises and County Council Requirements

If you are considering starting a childcare service it will be necessary to identify appropriate premises which are suitable for childcare provision indoors/ outdoors, in conjunction with Pre-school Regulations. It is also necessary for providers to familarise themselves with their local County Council requirements, particularly planning permission, rates and fire safety.  

Sourcing Suitable Premises

There are a few options for sourcing childcare premises:

  1. When setting up a childcare service some individuals / groups purchase or lease a property and renovate it to suit the delivery of a childcare service and in the process obtain Planning Permission for this process.
  2. Alternatively you could contact your local estate agent to see if they have any purpose built childcare facilities or buildings that can be converted for this use, to purchase or lease, available www.ipav.ie.

You should make sure to identify appropriate premises which are suitable for childcare provision indoors/ outdoors, in conjunction with Child Care Act 1991 (Early Years Services) Regulations 2016. Consider the following to further support you with finding suitable premises:

  • Check out other childcare services who have established good quality services and are in receipt of a quality assurance award such as the Early Childhood Ireland Awards.
  • Arrange an advisory visit to your potential premises, with the HSE Pre-school Inspection Team and the Fire Officer.
  • Engage an Early Childhood Specialist from Early Childhood Ireland to advise and support you through the process.

 

County Council Requirements

In setting up a childcare business, all providers should familarise themselves with their local County Council requirements, particularly planning permission, rates (commercial and water) and fire safety, further details of which can be found below:  

1.   Planning Permission

The development of a childcare facility by means of the provision of purpose built structures or changing the use of any existing structures requires full planning permission to comply with building legislation. Planning applications and guidance notes on the process are available from the planning section of your local County Council. In general the Department of Environment and Local Government considers that the following are appropriate locations for a childcare service:

  • New Communities / Larger New Housing Developments
  • Near large centers of employment e.g. business parks, industrial estates etc.,
  • In the vicinity of schools
  • Neighbourhood, District and Town Centres
  • Adjacent to Public Transport Corridors

For further in depth information have a look at the Department of the Environment Guidelines for Planning Authorities.

2.   Rates

Water rates

All consumers of mains water, apart from for the moment domestic consumers are liable for this charge. This means that a charge is payable on all business premises, on agricultural supplies, on schools, crèches, preschools and on churches. Consumers pay either on the basis of actual usage (metered supplies) or, in cases where usage is minimal, on a flat charge (fixed accounts). For further information on water charges contact the water charges section at your local county council.

Commercial Rates

Commercial rates are local property taxes that are levied by local authorities on commercial properties rateable under the Valuation Act 2001. Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered on the valuation lists prepared by the independent Commissioner of Valuation. The determination of the annual rate on valuation, which is applied to property valuations to calculate rates, is a decision taken locally by the elected members of a local authority in their annual budget.

Advocating on Behalf of Members in Relation to Rates

Early Childhood Ireland have led the ECCE sector in advocating on behalf of members for the abolition of rates on ECCE services or a fairer more equitable method of imposing commercial rates on ECCE services.  

3.   Fire Safety

All ECCE facilities must comply with fire safety standards – whether you own the premises or are leasing the premises as the ECCE provider it is your duty of care to ensure that all fire safety requirements are in place.

Fire Certification

If you are leasing a premises or setting up a business in a fully serviced premises the Fire Certification may already be in place – you should check with your landlord or the purchaser regarding this. If this is not in place you will need to go through a Fire Certification Process – this is usually carried out with an application for planning permission. A Fire Safety Certificate is a statement made by the Fire Authority stating that the building is constructed in accordance with the submitted plans and documents and it will need to meet the requirements of nationally accepted fire safety standards. To obtain a Fire Safety Certificate an application Form (similarly to planning permission) must be made to the Fire Authority – this should be available from your local County Council Office. You do not need to put a notice in the paper in relation to this (unlike with planning permission), however you will need full plans for your service. Your architect can assist you with this. You will also need to have a copy of the Fire Safety In Preschools booklet on the premises.

Fire Safety Management

Fire Safety Management of your service will involve the following: Putting together a Fire Safety Register which should include the:-

  • Name of the service and person in charge in relation to Fire Safety
  • Procedures for calling out the Fire Brigade
  • Management of fire drills and records of same
  • Details of emergency procedures
  • Details of Staff training in fire prevention and fire safety
  • A maintenance schedule for the fire protection equipment on the system.

You can address these issues under your fire policy.

Marketing your Business

Marketing you business will be key to ensuring its success, particularly in the early stages of development.

It is very important to prepare a marketing strategy for your childcare service. The following are the key elements that need to be included in your marketing plan:

Product You need to identify who your customers are, what are they looking for in terms of childcare service types?
You also need to define what are you offering the children in your service and what your unique selling point is?
Place This relates to the location of the business and how people are going to access the childcare service.
Price This refers to your pricing strategy for the type of service you wish to offer, particularly when compared to that of competitors?
Will your service be a budget or upmarket service?
Price is a balance between what your customers are willing to pay and what profit you would like to gain for private providers
Promotion Promoting your childcare service is very important. In this section you will identify how you are going to advertise your service (e.g. via newspaper adverts), publicity (via interviews to local radio about your new service to word of mouth), direct marketing to potential customers. Also decide what sales promotions you will use  e.g. first month fees at half the normal price etc.,

Draw up a Business Plan

Your business plan is the story behind your business idea and should be broken down as follows:

 

Executive Summary

This is an overall synopsis of the detailed plan, outlining your business idea clearly and explaining a clear path forward.

Professional Expertise

This section is all about your experience, skills, qualifications, expertise  – essentially you are making a case as to why you are the right person to develop this business.

Service Plan

Details the type of service, premises, location, set up and running costs, equipment, staff etc., ie., qualified staff will be needed

Feasibility Study

As outlined above

Financial Plan

Think of all the questions that someone might ask about your business, especially if they are a potential source of funding and make sure to answer all those questions in the business plan.

This should include your projected income and expenditure – it is your budget over a specified period i.e. 3 – 5 years. It will also show your Profit/Loss and Cash flow forecasts

Market Research

Describe the market in which you will be operating, making it evident that you have carried out extensive research, are aware of your competitors and understand where you will fit into the market.

 

You will also need to show that your service will be sustainable and why. You also need to show any competitive advantages you have and how you intend to market your business

Finance and Funding

When setting up a new business it is important to consider all the various finance options available to you. You can investigate the possibility of trying to secure a bank loan, which would involve preparing a thoroughly researched business plan with realistic facts and figures, to support your application. You could also explore the various government funding schemes that are available to the childcare sector.  

Bank Finance

Applying for a Loan

If you want to investigate the possibility of developing your business via bank finance you will need to make sure that you are well prepared and have a thoroughly researched business plan with realistic facts and figures to persuade the relationship manager that you have targeted a viable market. You will also need to provide evidence that you have the ability to generate enough capital to pay back the loan. It works in your favour if you are willing to invest in the business yourself, as it shows the extent of your confidence in the venture.

Unsuccessful Applications

If you are unsuccessful in your application for a bank loan and you feel that it was unfairly declined, you could be able to seek help from the Credit Review Office (CRO). The CRO was established to review bank lending decisions in relation to Small to Medium Enterprises (SMEs).  If you are eligible the CRO will carry out an independent review of the bank’s decision. After being declined by a bank another alternative is Microfinance Ireland, who are a state-funded organisation that can provide loans of up to €25k to small businesses.  There are certain criteria which determine application eligibility, including the following:

  • You will need to have a commercially viable business proposal which has been declined by a bank.
  • You need to employ less than 10 people.
  • You need to have a turnover of less than €2 million.

 

Government Funding Schemes

The Early Childhood Care and Education Scheme (ECCE)

Payment under the ECCE programme is by way of capitation fees which are paid directly to the service provider.  A capitation fee is payable in respect of each child enrolled in the free pre-school year.  A higher rate of capitation is payable in respect of sessional playschool services with highly qualified staff.

 

The Childcare Education Training Support Scheme (CETS)

Parents who are availing of certain training courses and initiatives are eligible for a CETS place, where a capitation of €170 per week is paid directly to childcare services to cover the cost of the childcare place.

 

The Community Childcare Subvention Scheme (CCS)

The CCS scheme subsidises childcare to disadvantaged families that use community-based not-for-profit childcare facilities.  Under the scheme childcare services are subsidised to enable reduced fees to be charged to certain groups of parents.  All monies received under the subvention scheme will go directly to the childcare service.

 

Child-Minding Development Grant

This grant is administered by the County Childcare Committees. The maximum grant amount is €1,000 and can be claimed against validated expenditure on equipment, toys or minor household adaptations. Please contact your local City/County Childcare Committee for information.  

Other Organisations Who may Assist You

A Solicitor… will be able to support you with your legal status for your childcare service, assist with leases etc

Your Local County Enterprise Board… will be able to offer you business and financial supports

POBAL… manages funds for the ECCE, CETS and CCS schemes for the government – visit www.pobal.ie to find the relevant contact details.

Local County Childcare Committee… will be able to provide you with childcare information relevant to your county. A full list of the County Childcare Committees can be found here.

Revenue Office… provides comprehensive guides in respect of all aspects of business taxation including a ‘Starting in Business’ guide which can be obtained from your local tax office at (01) 8780100 or the Revenue website www.revenue.ie

All Aspects of PRSI… For information on all aspects of PRSI contact your local Social Welfare Office.  The contact details of the Self-Employment Section are as follows:Social Welfare Services Office, Cork Rd Waterford Tel: (051) 356000 or (01) 704 3000

Food Safety Authority of Ireland… If you are serving food you can contact the Food Safety Authority of Ireland for advice.  Their contact details are as follows: Abbey Court, Lower Abbey Street, Dublin 1. Tel: (01) 8171300 Email: info@fsai.ie Web: www.fsai.ie

Small Firms Association www.sfa.ie

Childcare Legislation and Tusla Requirements

Providers are required to take all reasonable measures to safeguard the health, safety and welfare of preschool children attending their service.

Therefore, if you are setting up a childcare service there is also a range of Childcare Legislation and Tusla Requirements that you must adhere to in addition to the County Council Requirements mentioned above.

For further information and to download the relevant legal documents please visit the Childcare Legislation and Tusla Requirements section of our website.

Equipment for “Kitting Out” your Service

We have compiled two Equipment Lists to give you guidelines on the types of items which may be required in your service, depending on the ages of the children attending.

You should calculate the equipment needed based on the number and size of the rooms involved and all of the equipment and toys purchased should be assessed for safety.

Each list is intended to give you ideas and to be used for information purposes only – we would encourage providers to “shop around” for best value, particularly when purchasing expensive equipment.

 

Equipment List from Birth to Six

This list provides details of  recommended equipment for 20, 34 and 60 place services:

 

Number of: 20 Places 34 Places 60 Places
Babies aged 0 – 1 3 6 6
Toddlers aged 1 – 2 5 6 12
Toddlers aged 2 – 3 6 6 18
Toddlers aged 3 – 4.5 6 16 24

In selecting equipment for your nursery you need to ensure that the chosen equipment presents a variety of textures for the children.

To make best use of toys / equipment ensure that they may be moved from one play area to another.
(make sure that a choke hazard test is completed on all equipment accessible to younger children).

This list is not exhaustive and consumables are not included

 

School Age Childcare Equipment List

This list provides details of the recommended equipment for 20, 34 and 60 place services, who provide after school childcare facilities.

Providers should consider using open ended and recyclable materials which are inexpensive and provide excellent play value for children when used appropriately.

Employment and Staffing

Employing the right people for your team can be crucial to your business’ future success.

You may be proficient in some areas of your business but may struggle with others such as accounts, tax or legal obligations.

You can manage these areas by upskilling yourself or employing the relevant people to build your business.

Alternative Ways of Staffing

You can avail of a number of schemes which have been created by the government to incentivise job creation.

For further details of the various schemes involved please take a look at the Alternative Ways of Staffing page of our website.

Your Responsibilities as an Employer

If you are intending to grow your business and hire staff you will need to be fully aware of your responsibilities as an employer and in turn your employee’s rights.

For further information, such as criteria for hiring staff, sample job descriptions and contracts please visit the Recruitment section of our website.

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