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BLOG: Setting your rates

One of the first things to consider as a business owner is setting prices for your services. For childminders, this can vary massively across different counties, and even within the same city or town. It might seem overwhelming, trying to decide what to charge when you open for business. You want to get it right from the start, don’t you? Set your prices too high and parents might discount you right away. Likewise, if your rates are too low you won’t be able to make money and build a sustainable business model. So just how do you strike a happy medium?

Most childminders base their rates on those of other, similar settings in their local area. This information is relatively easy to come by, due to the fact the large majority of childminders use social media to advertise their services, or their local Family Information Service. Researching your local market is a very sensible way to start off the process, but it is also very important to realise your own worth, and understand the actual cost and value your setting and services can offer.

Childminders have a passion for providing the best possible care for children, but like any other business, they need to be profitable to stay afloat. Depending on their previous job, or their family situation, it’s not unusual for childminders to make a loss in their first year of business due to the set up costs involved. But thereafter, your income should exceed any necessary outgoings. So just how do childminders ensure a profit once well established? 

Below are some factors to consider when setting your fees:

Which rate(s)

Will you be charging a daily rate, half-day rate, weekly rate, fixed monthly rate or indeed an hourly rate? Perhaps you plan to do a mixture, depending on the ages of the children you will care for.

Wraparound care

If you plan to cater for school children then you will need to consider your before and after school rates, or a flat rate per day. Think about if, or how, to charge in the school holidays, and whether or not this will be dependent on if the child attends.

Opening hours

Will your setting be term time only, school hours only or holiday care only? The weeks you are open each year will impact on your overall income and profit. Read how one practitioner manages her finances in a term-time only setting.

Additional hours

It’s important to consider all the work you do out of hours as Childminder. In this current climate, we are faced with much stricter hygiene practices on top of normal cleaning, tidying, paperwork and additional training.

Setting size

The size of your setting, and adult-to-child ratio, will be a factor to take into account, as it will dictate your maximum potential earnings. As well as this, the number of children you can legally have within each age range will affect costs. Younger children will need nappies and wipes, bibs, high chairs etc. You need to decide as a setting what you will provide, and what the parents will.

Staff costs

You also need to think about staff costs if you are planning to take on a member, or members, of staff. This will come with outgoings such as DBS checks and training, so again needs to be factored into your rates. Of course, you will also be paying them wages every week or month, so you need to be sure you are going to be earning enough for these costs to be covered.

Know your area

It’s very important to understand your local demographics. For example, you could be working in an area which has more children eligible to receive government funded hours for childcare and early education. Maybe you live in a commuter hub, where there is demand for early starts and later collections? If many parents work a-typical hours or shifts, you may need to consider how that will affect the demand for services at certain times.


Consider if you intend to give discounts for siblings - some settings do and others don’t. Consider how many spaces you have and if you can afford a discount.
Top Tip: Apply the discount to the eldest sibling, so that when they leave the other child will pay full fees, not the discounted fees. Or make it clear in your contract that the discount only applies while you have multiple children from the same family.


Will you be charging for meals, or will they be included in your fee structure? Good food doesn’t have to cost the earth, but it doesn’t come for free either, and if you care for older children they will undoubtedly consume more food than younger children.
Top Tip: Work out an average cost per meal for tax purposes. This is a lot easier than having to sort through receipts every week - and remembering to keep them!


Quality resources can require a significant investment upfront. Bedding, cots, sleep mats, high chairs, prams, car seats all add up, especially if you’re starting with no equipment of your own.
Top Tip: See what good quality, second hand items are available in your local area, as this can significantly reduce your outlay. To ensure the health and safety of children remember that not all equipment can be second hand e.g. car seats.  

Toys and activities

Indoor and outdoor play equipment, craft equipment, loose play parts, books and more! It is not a requirement to have a setting filled to the brim with toys and games, but you will want some carefully thought out items that will engage the children in your setting and stimulate their development.
Top Tip: Consider multi-use items like a tuff tray, which can be used all year round for an endless number of different activities.

Going out

Understanding how much money you will spend on outings and travel is important, especially if you commit to frequent trips. Will parents be charged for trips separately, or will this be part of their fee? As well as entrance fees, bus/train/tram/tube fare, or petrol, also think about additional costs to yourself, such as motor insurance and wear and tear to your vehicle.

Running costs

You have considerations such as any costs to run your business day to day, for example, heating, lighting, water, internet, phone and council tax. If you plan to run your business from another setting (for a percentage of the time) then you might need to pay extra fees for hiring the space.

Professional resources

Qualifications, Registration fees, Health Checks, any other training you undertake (including statutory Paediatric First Aid and Safeguarding), ICO fees, any subscriptions you have (for example, magazines, online systems, or membership to a professional association), and insurance costs all need to be accounted for. Some of these will be one-time-only costs, whereas others will incur a regular fee that need to be included in your expenditure.


You may need to advertise, especially in the beginning before word of mouth takes hold. Depending on what form of advertising you choose, these costs can be one-off fees, or regular charges.
Top Tip: Utilise as many free tools as possible before you commit to spending money. Make the most of local Facebook vacancy groups, and PACEY’s free website, SearchChildcare.

Specialist training

Once you are established and open you may take on additional training to lead your setting into a particular direction - for example, forest school or becoming a Montessori setting. You may decide to charge more in these circumstances due to the fact you’ve had specialist training and are now offering a unique type of childcare.

Funding shortfall

You will need to take a look at the rates your Local Authority offers for funded places. This may be the same as, or comparable to the private fees you’ll charge, or there is a significant shortfall between your hourly rates, and what your LA can pay for a funded hour of childcare. Read more about funding, how it works, and what additional contributions you can ask parents for, in our funding Spotlight in England, or Childcare funding for Wales.

The above list isn’t exhaustive but it should help you to see just what is financially involved with running a childcare business. 

It can be very tempting to purely look at what others around you are charging, without considering the actual cost to you for providing the service. For example, one setting may not offer funded places and only provides places for that parents pay privately, but when you open you may have 50% of your spaces filled with families using funded childcare. If your Local Authority rate for funded hours is significantly less than your private fees, and you haven’t considered your options for addressing this loss, you could see your business struggle to be profitable.

Don’t be tempted to have low rates just to get yourself noticed. You could come to regret this if it means your business isn’t profitable - implementing a sharp increase in fees could upset the families you are already working with, who may then decide to look elsewhere.

When you strike the right balance you can do the job you’ve yearned to do, and show real passion for, whilst also earning a good living.

For more support calculating your fees, try our free Cost Calculator in Business Smart!

Kelly was a supervisor in a nursery setting before opening Kel’s Little Explorers Childminding Service, which she successfully managed for ten years. She now applies her extensive early years knowledge to content writing and software development.

Carol Winyard
Thank you for this blog it is very informative and helpful when just starting up.
15/05/2021 18:59:31

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