Running a playgroup

Annisele

ALTEA wrote: »

My wife and her friends are currently paid and all members of staff are on temporary contracts that are renewed termly as numbers of children dictate. They anticipate not getting paid initially until later on in the year as the numbers of children increase (as usually happens).

...

The main reason they want to take it over is for job security. If someone else comes along and starts running it then there is a risk that they will not have jobs and they may not even like working for that person. They have put allot of effort into the playgroup and have the ability to run it so they want to do it.

Taking the business over sounds like a quick and easy way for your wife to lose her friends.

What will they do if the business can only support three employees, but there are four of them? How do they choose who gets fired?

What if they disagree about whether there's enough money to start paying wages?

If they don't anticipate getting paid for a while...that sounds like their jobs are at risk anyway. I can't see that taking it over gives them any more job security, but it does take away the possiblity of a redundancy payment.

kingfisherblue

TBH, it doesn't sound as though your wife and her friends have much idea about running a business. Whilst they can learn, this could be costly and time consuming. Do they have any idea how much money they will each have to contribute just to keep the playgroup running for the first year?

Insurance
Rental (my son's school charges £33 an hour :eek:)
Wages - both childcare staff and possibly a cleaner
HMRC
Payroll
Business rates (might be included in rent)
Utilities
Consumable items (nappies, wipes, food, paper towels, etc)
Stationery, computer, printer, etc
Maintenance and repairs ( depends on what the rental contract says)
Replacement toys
OFSTED registration
Staff training
CRB checks (although you can request that staff pay for their own)
PAT testing of electrical items (needed annually)
Fire extinguisher testing (needed annually)
TV licence
HR support (for contracts, etc - I assume that they will need help with this)

etc.

It all adds up to quite a large monetary input.

Also, do any of them have experience in managing staff, writing policies, etc? What about record keeping - not just children's records, but staff records as well (holidays, sickness, training, etc). Do they have any experience with advertising or increasing numbers of children, or does the group rely on word of mouth?

Do any have office training at all? A large part of any business is keeping the admin side up-to-date, not only for efficiency, but to keep everything legal as well.

From what you have said so far, I think that there is an awful lot that hasn't yet been considered.

Savvy_Sue

I know we're all sounding a bit 'doom'n'gloom' here, but the last few posts are making very good points ...

ALTEA

Thanks for your advise so far, the points brought up by 'pleasedelete' were probably the sort of info I require. Regarding some of the other points , they would not be entitled to redundancy as they are on temporary contracts. We have experience in managing a business although having not set up a small business specifically a playgroup. There is certainly some food for thought there. I did wonder what the position was with it being in a school grounds. The girls never really wanted to take over of the Playgroup they would much rather stay as they are but working there really suits them and they want to continue to be able to do this, I guess they feel that they have the ability as much as anyone else and want to give it a go. They don't want to make any profit from it they just want to earn a wage and cover the costs.

Savvy_Sue

ALTEA wrote: »

Regarding some of the other points , they would not be entitled to redundancy as they are on temporary contracts.

Not sure that's relevant: I think if there were periods of continuous service, it wouldn't matter that they were temporary. I suppose the owner would argue that there are breaks for school holidays.

Out of interest, were they given holiday and sick pay?

ALTEA wrote: »

The girls never really wanted to take over of the Playgroup they would much rather stay as they are but working there really suits them and they want to continue to be able to do this, I guess they feel that they have the ability as much as anyone else and want to give it a go. They don't want to make any profit from it they just want to earn a wage and cover the costs.

If they don't want to make a profit, then I'd suggest that they should consider setting up a voluntary management committee to 'run' it. The difficulty is that you'd need to find willing [STRIKE]victims [/STRIKE] volunteers from among the parents to act as chair / treasurer etc. It would be unusual for all of the staff to be on the management committee, although there might be a staff rep.

ALTEA

Thanks for all your replies so far. I've certainly got allot more to think about and questions to be asked. I appreciate that there are risks to this sort of thing and that's partially the reason why I've come on here for some advise, although at the moment, I cannot see where the major financial risk is. I'm not saying there isn't one. As I see it the girls are not the main bread winners in their households, they are not putting any large sums of money in (just enough to cover the costs of insurance etc, any other bills will be paid for by the takings. they are not expecting to get paid initially. They don't have the aim of making a profit but eventually to just earn a small wage. they are fully trained in all aspects of childcare, there will be no additional staff other than the 3 of them who will all be equal in the business. The only risk I'm worried about would be if it didn't work out then they would owe the remainder of the rent to the school (which would be affordable) and I'm also worried about any previous liabilities that may come knocking on the door, although we have no reason to believe that there are any but what could they do to protect them self from them? I guess in the ideal world running it as a charity or setting up a voluntary management committee would be the ideal thing but I'm not sure how easy that would be to find volunteers and getting other people involved may start to complicate matters.

Savvy_Sue

Setting it up as a charity is NOT for the faint-hearted.

There's a couple of national playgroup organisations, it would be worth getting in touch with them, they may already be members of one or the other.