Business sense

Childcare is rarely an industry people go into to get rich. ‘Many early years providers are in it for the children,’ says Action for Children’s head of early years Sue Robb. But with the arrival of the Government’s 30 hours of funded childcare in September, early education providers must reach for their suits and boots, and swap the playroom for the boardroom. Training being offered by local authorities, membership organisations and private providers is increasingly being turned to.

Indeed, the need for settings to consider business structures, and gain skills in this area, is being made explicit. North Yorkshire Council, which has confirmed a universal hourly base rate of £3.90 before supplements are added, will use early years reserves to maintain current differential hourly funding rates during the summer term ‘to provide early years providers and schools time to review and re-calibrate their business models’. The current rates are £5.56 for childminders, £4.16 for nursery classes and £3.92 for full daycare providers.

So how are providers going to overcome any shortfall in funding? The Department for Education (DfE) is, not surprisingly, keen for settings to become more savvy at making funding go further. Its Childcare Works programme has been set up to address this, with free, 30-hours-focused Learn Explore Debate (LED) workshops for providers, local authority officials and other early years professionals across England.

Childcare Works national programme director James Hempsall says about 90 per cent of providers attending the briefings do not have active, updated business plans. ‘The reality is, in the sector, business planning is not top of people’s priority list – delivery of the Early Years Foundation Stage is,’ he says.

To address this, as well as further LED events, from March, Childcare Works will deliver up to 40 special business sessions for providers, as well as training for local authority business support officials. It is also working with all councils directly. In North Yorkshire alone, it has already delivered 30 provider briefings. This is because North Yorkshire is one of four local authority areas set to deliver the 30-hours offer early from April.

For its part, North Yorkshire is also providing free business planning workshops delivered by local authority finance teams. They cover aspects including long- and short-term business planning, different business operating models, understanding income, costs and breakeven point, and marketing. The authority is also offering settings self-assessment tools and individual support. ‘We are currently investigating the potential of trading this training package to other local authorities and early years providers,’ says a council spokeswoman.

EXTRA ADVICE

Another proactive local authority, Waltham Forest Council, currently offers local early years providers up to three days of free support from its early years business support officers. To reflect the 30-hours roll-out, it plans to offer additional training and advice. This will cover skills including reviewing business plans, calculating unit costs, fees and charging policies, facilitating partnership working, and reviewing effective staffing structures.

This is because, a spokesman says, the council consistently observes similar weak spots in local providers’ business acumen. These include failing to research the most cost-effective ways in which to operate; for example, by investing in IT or digital systems and buying-in expertise, rather than solely relying on manual processes. He adds that human resources procedures for disciplinary or grievance issues can be lacking, as well as regular and ongoing continuing professional development training across business functions.

To deal with these issues, the local authority will focus on training providers to develop sharper financial skills and business planning. ‘This would include being able to effectively assess local supply and demand and delivery models, to ensure they meet the needs of parents and carers while also supporting the sustainability and viability of the business,’ says the spokesman.

The National Day Nurseries Association (NDNA) is currently working to improve childcare providers’ business skills by hosting national events. At these, guest nursery speakers from the 30-hours pilot areas explain how they have remodelled their businesses to deliver the extended entitlement. NDNA is also providing online guidance about 30-hours delivery, and one-to-one telephone business support to members.

NDNA director of quality and workforce development Stella Ziolkowski says a common business mistake within nurseries is giving away too much for free. ‘An example of this is a member nursery which buys birthday and Christmas presents for all their children,’ says Ms Ziolkowski. ‘In effect, they are too kind, but this does nothing to help their bottom line.’

TRAINING

One of the only university courses in this area is Early Years with Enterprise, to be launched this autumn by Leeds Beckett University’s Carnegie School of Education. This undergraduate course combines a traditional early years qualification with leadership skills and ‘the legal, business, financial and ethical aspects surrounding early years provision’. It is pitched at both people who want to ‘lead learning and development in an early years childcare setting’ and people with ‘entrepreneurial ambitions’, according to the website.

Another option is National Early Years Trainers and Consultants (NEyTCO) and training providers Flourishing People and Silver Pebble, which will launch a course for childcare professionals who have never had formal business management training. Flourishing People learning and development consultant Jacqui Burke says Managing Your Childcare Business will be the only course available focusing on childcare business management that leads to a recognised qualification.

She says the business requirements that 30-hours provision will bring underpins the entire course, which covers all business aspects including marketing, finance, premises suitability, staffing contracts and staffing ratios. ‘30 hours will have an impact on every aspect of how providers are running a business,’ says Ms Burke.

The first Managing Your Childcare Business course, to be launched in May, offers 15 places. But subsequently the training providers will run courses in response to demand. The training takes a year to complete, and is likely to result in a Level 3 Institute of Leadership and Management qualification in enterprise and entrepreneurship (as yet unconfirmed). ‘That most accurately matches the needs of people we’re talking to,’ says Ms Burke.

Existing courses also directly address issues such as occupancy and underfunding. Midlands-based MBK Training offers three courses focusing on business skills for early years providers. These include: Building Occupancy, which covers getting and retaining new children; Funding the Gap, which looks at ways to support nurseries when funding amounts leave them short; and Stepping up to Management, which supports practitioners moving into management roles. None of these covers the changes 30-hours provision will bring, but MBK’s training and development manager Matt Stanford says the company is currently redesigning its offer to reflect the extended entitlement.

Providers may feel daunted by the business upskilling that 30 hours will demand. But Ms Robb says they should see it as an opportunity. ‘It’s overdue,’ she says. ‘This is an opportunity to scale up this area and perhaps help people to run businesses that will be more comfortable for them. But it might not be an easy journey.’

• See links to courses at www.nurseryworld.co.uk