Your mission should you choose to accept it: Open a daycare facility

Tags: legal

Is opening a daycare facility in Luxembourg mission impossible?

5 key questions to make your business project a sustainable reality, so you can say mission accepted.

1. Am I qualified?

At least one of the company heads must have proven experience and the relevant diploma for the job. The “Starting up & Development” section of the Guichet Public website is a real goldmine, with all the information you need on the topic. Be sure to look into the accepted diplomas and other requirements. In Luxembourg, we’re also lucky to have a number of organizations that offer high-quality training courses (training course in French) such as the House of Training, so don’t be shy if you need to brush up on your knowledge and skills. And you can always choose to surround yourself with educational and supervisory staff (caregivers) that fulfil the required qualifications.

2. Am I aware of all the rules and regulations?

Ensuring the compliance of your facility is an essential prerequisite, and rules and regulations on the matter can change over time. Here again, the Guichet Public will be your best friend… We’ve compiled a Top 4 for starting up:

Educational and supervisory staff: each educational and supervisory worker can tend to 6 children under the age of 2; 8 between the ages of 2 and 4; or up to 11 above the age of 4.
Reception capacity: small children… large spaces! Requirements provide for 4m² per child in day rooms; 2m² per child under the age of 2 in dormitories; and at least 1m² per tot in dining areas.
Sanitary requirements: contact the National Health Directorate for information pertaining to sanitary, hygiene and food safety requirements.
Safety regulations: the Inspection du Travail et des Mines (link in french) will provide you with details for ensuring children’s safety.

Once these items have been tended to, the Education and Care Services of the Ministry of Education, Children and Youth will invite you to apply (only in french) for SEA accreditation (Education and Care Services for Children). In other words, you will be required to prepare a teaching and education project within the provided framework. Doing so will help you move from the idea phase to actually making things happen, and what could be a better source of motivation?

3. What legal status to opt for?

No need to go through every option out there with a fine-tooth comb! We’ve taken the time to pre-select the three most suitable options for you:

The SA status (public limited company)
The SARL status (limited liability company)
The SAS status (simplified shareholder company)

For this step, you can get valuable advice from the House of Entrepreneurship.

4. Do I have the financial resources I need?

Opening a daycare facility requires a certain budget. Adding start-up costs to operating expenses can quickly amount to upwards of 100,000 euro. Naturally, the size and location of your facility will impact your specific figure, but either way, being realistic in your financial estimates is fundamental. If you hope to obtain a loan, nyuko can help you challenge your idea, and draw up business and financial plans for your project.

If this step seems to be looming over you like an unattainable mountain peak, remember the “baby steps” method. Breaking your objectives down into smaller steps is a great way to the top! Plus, “baby steps” when you’re opening a daycare, you have to admit it’s pretty cute!

Now off we go! Here’s a list of what to focus your attention on.

For your start-up costs:

Setting up the company
Planning and ensuring compliance
Prepaid rent
Equipment: computer, telephone
Communications: website, brochures, etc.

For your daily expenses:

Costs for general operating: water, electricity
Internet, phone, administrative costs
Rent and other rental costs
Insurances
Accounting fees (when externalized)
Taxes
Activity-related expenses: food, diapers, hygiene products, etc.
Staff-related expenses: salary, contributions, training
Repayment of your bank loans

Start contacting the ITM and construction companies to get an estimate of the budget you will need as soon as you feel ready.

We’re good for the expenses… now what about the profits?

Basically, to estimate your turnover, take your reception capacity and consider your occupancy rate. Market prices currently fluctuate between 6 and 8 euro per hour and are often available as packages. If you apply for ministerial approval, you’ll also be able to access the subsidy system as a chèques-service service voucher provider (which can be a big draw for some families!).

Tangibly, what should you focus on? Here are some tips for a real-as-possible draft budget: be realistic, get information from other daycare facilities, work on improving your occupancy rate over time, and remember caregiving regulations can evolve.

This is a huge part of your entrepreneurial project. Have you seen it through? Is your motivation intact? Step 4: check! Congratulations, you’re almost there!

5. What town or city to choose?

A key element of your project will be the choice of location. Find out about national government policies and demographic trends for each town, then answer these 6 questions:

What daycare facilities are already operating in the targeted area?
What is their rate of occupancy?
Based on the age group you’re targeting, how many families would fit your criteria?
Among those families, how many are still looking for places in daycare facilities for their children?
In terms of employment, what are working patterns like in the town/city?
What is the early childhood policy in the town/city?

Base your answers on facts, not assumptions.
Do you have all the answers to these questions? Great! You’ve just completed step 5 toward making your project a reality! Now that you have the facts, you can start looking for a professional space and getting approval from your chosen town or city.

So, did you say challenge accepted? You now hold all the cards to launch your business with peace of mind. We can already see the youngsters and their sparkling eyes!