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How do I start a childcare co‑operative?

Starting a childcare co‑operative involves a great deal of planning.  Our business support telephone line will be able to offer advice, guidance and consultancy at each and every stage.  Below are issues for consideration.

• The idea
• Business plan
• Support
• Finance
• Premises
• Registration
• Management and organisation
• Co‑operatives^UK
• Childcare regulations

The idea

Any good business starts with a good idea.  If that idea is to convert into a viable childcare co‑operative, it must contain both an achievable social objective plus a commercially viable business.

The first test of the idea will probably be whether it can be translated into an effective business plan backed by exploring your product and/or services, carrying out market research and development, deciding an effective business and trading name and considering your marketing and branding strategy.

Our introductory leaflet to the co‑operative approach may help you decide if the co‑operative model is suitable for your service.  you can get a copy by clicking here or visiting our downloads page.

Business plan

If you need to raise finance for your business you will have to produce a business plan to present to a bank, community investment fund, and stakeholders, local authority, or whom ever else you may be approaching for support.

Even if you do not need outside finance, you would be well advised to produce your own business plan.  The purpose of the business plan is to provide a cogent rationale for the business, what it consists of and how it will be run so that the community and stakeholders can understand how the organisation will operate.  Your business plan should be a working tool not just an academic document.  The co‑operative childcare service can give advice on the layout and content of your plan.

Support

There are a variety of organisations that will, or may, be able to assist you with your business plan.

Co‑operative development bodies are UK wide and you can call 0161 246 2941 to find your nearest development worker or visit www.cooperatives-uk.coop.

Co‑operative Childcare has co‑operative development workers who will be able to give you advice over the telephone on our low cost co‑operative phone number 0845 458 1879.

The Co‑operative Childcare service has a number of consultants based around the UK and after calling our phone line we will assess your need for a face-to-face consultation visit.

Depending on the service your co‑operative plans to deliver there may also be other specialist support providers.

Finance

Finance is usually one of the most difficult challenges to overcome for a new start co‑operative.  There are, a variety of potential sources of grant and loan support.

Co‑operative start-ups can be funded by investment from members and/or by loans and grants.  Organisations specialising in lending to co‑operatives include Co‑operative and Community Loans.  You can call our business support line on 0845 458 1879 or contact you local co‑operative development worker for further information.

It is important to ensure you have adequate systems and skills in place to monitor the finances of the co‑operative to ensure the organisation is financially sustainable in the long term.

Premises

The main source of assistance in finding premises is likely to be your local authority, through its Economic Development Unit and Planning Department.  Local estate agents may also be of help.  Keeping the work place safe and your employees healthy are paramount.  You need to establish whether you can meet all the regulations in the premises you have chosen.  Insurance for the premises needs to be considered at an early stage and again our telephone help line can inform you of any specialist providers.  You should consider what environmental measures you would be able to make, which will save you money.  Many community-based organisations also refer to community groups that hold property such as development trusts and housing associations.  It may be of use to find out if there is a housing co‑operative in your area that agrees that there is a need for childcare.

Registration

The process of choosing a legal structure and registration is vital as without this your business will have no formal structure which may cause problems being recognised by other investors and organisations or individuals, and problems with security and liability.  The type of structure you choose will govern your administration, records and reporting procedures.  A co‑operative can be:

• A company limited by guarantee
• An industrial and provident society (IPS)
• A company limited by shares

For each type of co‑operative there is a governing document and this varies depending on the size and aims of the co‑operative.  There may be a charge for this document but it is much cheaper than drafting a new one.  Most co‑operatives are companies limited by guarantee or IPS.  You should discuss your needs with a co‑operative development adviser to decide what would be most suitable for your business.

Co‑operatives intending to be incorporated will need to register the company at Companies House and other types must register with the Financial Services Authority (under the Industrial and Provident Societies Act).

Co‑operatives^UK has a legal team who will be able to advise on the different options and help you decide the most suitable structure for your business and your members. For more information on legal structures please call Co‑operatives^UK legal team on 0161 246 2959.

You can download our 'Legal Structures - Its Childs Play' leaflet by clicking here or visiting our downloads page.  The leaflet explains the importance of incorporation and explores the different models of co‑operative to help you decide which is the most suitable for your co‑operative childcare service.

Management and organisation

Co‑operatives consist of effective teams.  It is essential that those people who initiate and lead co‑operatives recognise the importance of effective team building and working.  Co‑operatives^UK also provides a useful toolkit for Governance and Participation.  The co‑operative childcare development workers, consultants and our dedicated telephone help line can all provide information on the following management and organisation issues.

• Business planning
• Legal structures
• Marketing (including pricing & promotion)
• Financial management (including budgeting, payroll & income/funding generation)
• Democratic working (co‑operative working methods)
• How to run and manage the business

Co‑operatives^UK

Co‑operatives^UK is the central organisation for co‑operative enterprises in the United Kingdom.  Member owned and led, we work to represent the interests of our member co‑operatives - in the UK, in Europe, and at a global level.

We provide a wide range of services to our members designed to support and enhance their growth and success.  We work to promote, develop and extend the co‑operative sector as a whole.

Co‑operatives^UK is a member-based organisation.  It is a secondary co‑operative owned and democratically controlled by the co‑operatives and other organisations, which make up our membership.  We provide an extensive range of services to our members including

• Performance monitoring
• Legal services
• Promoting good governance
• Promoting co‑operation
• Publications & information services
• Events & networking
• Training & education
• Financial services

Childcare Regulation

There are various regulations, which need to be met when providing services for young children and their families.  Throughout your planning you need to be constantly aware if these, as they are compulsory.  This is a very brief overview of some of the regulations.  Whilst the co‑operative childcare service aims to provide business advice we can signpost you to organisations, which will give you further information regarding childcare related issues.

Background Checks: Childcare organisations are required to carry out a background check on all individuals involved in the business.  This is a compulsory requirement under the Children Act (1999).  The checks must be done for all workers, managers, directors, governors, trustees and those who live on the premises.

The Office for Standards in Education (Ofsted): The Children Act (1989) requires all early education providers to register with Early Years Directorate of Ofsted.  There is an initial and annual registration fees payable.  There must be a 'registered person' who can either be an individual proprietor or someone acting on behalf of a group, however this person has overall responsibility for the provision of childcare and compliance with standards and regulations.  There are national Standards for early years settings and how your business will meet these standards should be demonstrated on inspection before you can register.

Food Saftey: Early years settings that handle, prepare and serve food must comply with the requirements of the Food Safety Act (1990).  The business is also required to register with their local authority Environmental Health Department, if it is to store and prepare food.  This involves an inspection of health and hygiene from an environmental health officer.

Health & Saftey: To comply with health and safety regulation there's a range of key obligations to be met such as the reporting procedure for accidents, injuries and near misses in conjunction with regular risk assessment.  The business must also have safe storage and a handling and disposal of all hazardous substances procedure.

Ratios: There are regulations in regards to the ratio of qualified and unqualified adults to children.  Details can be obtained from your local Social Services, which is responsible for interpreting and applying the legislation; different Social Services departments interpret these acts differently so you should be aware of local variations in the regulations.

These are only some of the regulations that you need to consider.  Bear in mind that the regulatory bodies differ in different parts of the UK.  In Scotland it is the Scottish Commission for the Regulation of Care (SCRC) who is responsible for the registration and inspection of childcare providers.  In Wales it is the Care Standards Inspectorate for Wales (CSIW) and in Northern Ireland it is the department of Health, Social Services and public Safety (DHSSPS).