How to plan & manage your childcare business: some important considerations

Blogs 17 Feb 2020

The childcare sector comes with more regulations than most. Our guide aims to help make sure you know your abc and 123 with to what you need to consider.

Managing your grown ups 


Childcare providers have a duty of care to ensure any adults caring for children are suitable to do so, and that staffing arrangements ensure the children are well supervised, kept safe and have their needs met.

Childcare providers must comply with the staff-child ratios set out in the Statutory Framework for the Early Years Foundation Stage. These requirements set out the minimum number of adults needed to supervise children based on the number of children and their age. They also specify the minimum qualification levels required within the ratios. 

A safe recruitment process must be followed when recruiting employees for your business, ensuring that background checks are carried out on all new employees (including enhanced DBS checks), and that they have the appropriate references, qualifications, knowledge and experience for their role.

Where you are employing staff in your childcare business, you will of course need to comply with employment law.  You will need to consider on what basis you will employ or engage staff as determined by the needs of your business and number of children in your care.

It is worth bearing in mind that, as well as day nurseries, childminders can take on apprentices too.

FSB Members can access the FSB’s Legal Hub for free, which contains a fully editable template contract of employment, a casual hours’ worker template contract, where you are looking for staffing support on a non-fixed hours basis and a contract of apprenticeship; together with guidance notes and factsheets to help you at the recruitment stage and thereafter.

FSB Members also benefit from free access to our legal advice line for employment law advice from qualified lawyers.

Client terms and conditions

Remember it is your business, so it is for you to set the terms and conditions under which you provide your childcare services. This is of course a balance between providing affordable childcare, whilst at the same time ensuring that your income exceeds the cost of providing the service and that you have sufficient resources in place to match your offering:

  1. For example, bear in mind that parents/guardians may fall behind with their childcare fees.  It is advisable to require that some of those fees (e.g. 2 weeks or so) be paid up front and/or that a deposit for retaining your services be paid in advance, as a term of your contract.
  2. Childcare rates - You may offer out of hours childcare for enhanced hourly rates, or offer sibling discounts.  You may be able to offer parents more competitive rates for childcare where a minimum number of hours are required, as opposed to a contract for childcare on an ad hoc basis at a specified hourly rate.  You may wish to specify in the contract additional charges that apply on top of a daily fee, such as for school picks up and drop offs, for providing meals or for arranged outings. Consider also whether you will provide local authority funded childcare, in which case you should ascertain the rate per hour per child your local authority will pay.
  3. Notice periods - Your contract should set out the notice the parent needs to give you to end the contract for childcare services. It is also useful to set out the circumstances in which you have the right to end the service, e.g. where fees are not paid, or due to unacceptable behaviour.
  4. Debt management – recovering debts is both time consuming and uncertain but late payments or non-payments should be tackled head on, at an early stage. 

Regulatory requirements


Most providers caring for children under 8 years old for more than 2 hours a day in England must register with Ofsted. If you’re a childminder, you can register with a childminder agency instead.  It is a criminal offence to provide unregistered childcare, or on unapproved premises, if you are legally required to register.  If you want to register with Ofsted, contact your local authority for information and advice. Local authorities are legally obliged to provide this support.

You will be inspected by Ofsted when you’re registered as a childminder or childcare provider. This is to make sure you’re meeting the requirements for safety and learning and development.

DBS checks

You may need to go through an enhanced DBS (criminal records) check if you work directly with children or run the childcare organisation, for example as a:

  • childminder
  • childminding assistant
  • nanny
  • playgroup owner
  • nursery owner

If you’re a childminder looking after children at home, then any adults who live with you or work there regularly during childcare hours will also need a DBS check.

Data Protection

Information (personal data) you process about children in your care must of course by kept secure under data protection legislation and should only be kept and processed for a permitted purpose.  It is also likely, as a business processing personal data, which you will need to pay a data protection fee to the Information Commissioner’s Office (ICO). 

Safeguarding and Health and Safety

Childcare providers must have in place safeguarding policies and procedures. Staff should of course be trained on these procedures, including the procedures for ensuring the health, safety and welfare of children in their care.  This will include documented procedures for recording details of accidents that take place whilst children are in your care and any food allergens that apply, medical requirements and procedures around this.  Food safety and hygiene should also be observed where food is provided.

FSB Members have free access to our template suite of health and safety documents and factsheets, as well as our legal advice line for health and safety advice from qualified lawyers.

First Aid

First aid training is a requirement for registered childcare providers and a potentially lifesaving skill for anyone who cares for children. As a minimum, you should ensure you have a fully stocked first aid kit on site and a competent person (which may be yourself) to deal with first aid arrangements. 


FSB Legal Protection Scheme

Legal protection covers various scenarios and ensures you and your business are covered

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