Deciding How Much To Charge

This is probably one of the most difficult decisions you will make when starting out in your childminding business. Charge too much and you will struggle to fill your vacancies, charge too little and you will not get the financial rewards appropriate for a highly skilled professional job.

Childminding often means long hours and demanding work and the fees you charge should reflect this. It is often assumed that, as you work from home, you do not have overheads as such to think about but this is not true. You have additional costs and there are a number of things you ought to consider before deciding what to charge.

When setting your fees you must take into account your everyday business expenses for example heating and lighting, wear and tear on your home, public liability insurance, food and drink, toilet rolls, toys, books and play equipment. It is usual for all of these costs to be included in the basic fee. By making a list of all your usual expenses you will be able to calculate how much you spend on a weekly, monthly or annual basis and incorporate these costs into your fees.

For example:

• Your daily expenses. Meals, snacks and drinks will all need to be purchased and your fees should take this into account. You should be left with a reasonable amount of money after deducting your expenses otherwise you will effectively be working for nothing.

• The number of hours a child will be with you. Will you charge a different rate for hourly, daily or full-time attendance?

• Your qualifications and experience. Some parents are willing to pay more for an experienced childminder who has gained lots of qualifications; others are not swayed by this as their own earning potential often dictates how much they can afford to pay for childcare.

• The fees other childminders in your area are charging. These childminders are your competition and it is not a good idea to charge more for your service unless you can offer a significantly different or specialised service. Undercutting your fellow childminders may mean you get the customers but you will be doing yourself a disservice and alienating yourself from those you may wish to be friends with, and who may also attend your local toddler and support groups.

• Restriction of numbers. You will be restricted by the number of children you are registered to mind and you should bear this in mind.

• Are you going to offer discounts for siblings or advance payments?

• Are your fees inclusive of bank holidays and holiday pay?

• Are you intending to charge more for babies than older school-aged children?

• Term-time opening. Are you only looking after school-aged children during term time? If this is the case, think of the 13 weeks plus per annum when schools are closed for holidays or training days and your earning potential may be drastically reduced.

• The demand for the service in your area. This will have a great impact on the fees you will be able to charge. A high level of unemployment, for example, will reduce the number of people seeking a childminder as opposed to families where both parents are in full-time employment.

• Bear in mind how much Working Tax Credit and Child Tax Credit parents can claim when deciding what fees to charge. You can find more information about tax credits by contacting the Inland Revenue.