Starting your nursery or pre-school

Planning and organisation are vital when starting any small business and childcare is no exception. In addition to offering high quality care and education, there are a number of business considerations to factor in. Here are some top tips to get you started. If you're looking to set up as a registered childminder, see our tailored tips for childminders.

Tip one: Plan ahead

Find out about local demographics

Research the types of families in your local area - how many families have young children or school-aged children? What's the average income in your local area?

This type of information can help you to learn about local demand for childcare; identify your target market; and create financial projections.

Research competitors

Find out about other childcare services in your local area. How many nurseries and pre-schools are there and where are they situated? What size are they and what type of childcare do they offer?

This will help you to choose the right location and think of ways to make your business stand out from the crowd.

Start your business plan

A business plan will help you to outline what you would like to achieve, and how and when you will get there. Start by setting your goals - how many children do you aim to have on your books after six months? What are your financial projections for the first year? Set clear objectives that will help you to achieve those goals.

Include a marketing strategy in your business plan - how will you advertise your nursery? Will you set up your own website and use social media? How long will you give yourself to plan and market your business before opening the doors? View our marketing ideas to help you advertise your services.

Find out more about writing a business plan here.

Tip two: Be financially savvy

Outline all of your expenditure

Consider all of the set-up costs involved in starting your business, plus all ongoing expenditure - down to the very last detail. This will help you to project your profit and loss more accurately, and to avoid nasty surprises. Here are some expenses you'll need to think about:

  • Registration with Ofsted (in England) or CIW (in Wales) 
  • DBS checks
  • Tax and national insurance
  • Staff salaries
  • Staff training
  • Insurance
  • Rent/mortgage
  • Maintenance costs
  • Utility bills
  • Catering
  • First aid equipment
  • Furniture (see Tip six below)
  • Cleaning materials
  • Craft materials and toys (replacing as well as buying first time)
  • Any vehicle used for the nursery - MOT, road tax, fuel
  • Group outings
  • Music licence
  • Annual memberships to, for example, PACEY

Separate your costs into start-up costs and ongoing expenses. How will your finance your start-up costs? How much money will the business need to make each month to cover your ongoing business and personal expenses? Be as detailed as you can - for yourself and for anyone planning to invest in the business.

Project your income

How much will you charge for your services? How many children do you plan to have on your books? How long do you estimate it will take to achieve this? Take into account the size of the premises and the number of staff you will need to employ.

Will you offer funded childcare? Find out how much your local authority pays per hour for funded places, as this will help you to determine your patterns of offering funded childcare. For example, will you offer funded places during term-time only or all year round? How will you charge for consumables, additional hours or other services such as outings?

Read more about funded childcare.

Read more about expenses versus expected income.

Tip three: Choose your premises carefully

Consider space and suitability

When thinking about the number of children you plan to take on, think carefully about the space and suitability of your premises. The EYFS statutory framework for group and school-based providers in England states that childcare providers must meet the following indoor space requirements:

  • Children under 2 years: 3.5m2 per child
  • 2-year-olds: 2.5 m2 per child
  • Children aged 3 to 5 years: 2.3 m2 per child

Providers must provide access to an outdoor play area. If that is not possible, they must ensure that outdoor activities are planned and taken on a daily basis (unless circumstances make this inappropriate, for example unsafe weather conditions).

Here are some key points to think about regarding your premises:

  • Safety and security
  • Meeting the required standard for space per child
  • Access for parents or children with disabilities
  • Car parking
  • Transport connections
  • Acceptable air pollution levels (you can find out this information from your local authority)
  • Suitable kitchen facilities
  • Adequate number of toilets and washing facilities
  • An area for changing facilities
  • An area where parents and staff can talk confidentially
  • An area where staff can take a break
  • Outdoor facilities at the premises
  • Local parks, libraries and other outing opportunities nearby
  • Storage space

For more information about the Safety and suitability of premises, environment and equipment in England, see from page 36 of the EYFS statutory framework for group and school-based providers.

For information on Risk assessments in England, see page 38 of the EYFS statutory framework for group and school-based providers

For information in relation to indoor space requirements and other requirements in Wales see the National Minimum Standards for Regulated Child Care for children up to 12 years of age.

Tip four: Make your business official!

Make a checklist of who you need to inform.

Here are some of the key organisations you'll need to tell about your new business:

  • Ofsted (in England) / CIW (in Wales)
  • Disclosure and Barring Service (DBS)
  • Your bank - set up a business account
  • Your insurers
  • HMRC - to register your business
  • Companies House - this depends on how you are structuring your business. You'll need to register with Companies House if you're setting up a limited company or limited liability partnership (LLP)
  • Information Commissioner's Office - to register and ensure you're aware of all data protection laws for holding photos and information about the children and families you'll be working with.

Tip five: Hire the right people

Create robust checking systems

Make sure you have robust systems in place to ensure the suitability of staff members. Each member of staff must have an enhanced DBS check.

To find out more about the suitability of staff in England, see page 24 of the EYFS statutory framework for group and school-based providers.  For information in relation to requirements in Wales see the National Minimum Standards for Regulated Child Care for children up to 12 years of age.

Attract high-quality candidates

There's plenty of competition out there, so plan how you're going to attract members of staff that will help your business to thrive.

Here are some key points to consider:

  • Salary structures linked to qualifications and levels of experience
  • Staff benefits
  • Training and professional development opportunities
  • Opportunities to develop into new roles such as EAL coordinators and PANCos (Physical Activity and Nutrition Coordinators)
  • Flexible working options

Tip six: Choose furniture and resources carefully

The furniture and resources that you choose will be specific to the size and type of setting that you plan to run. Choose high quality items from reliable retailers. Remember, PACEY has a setting essentials section in the shop. Have a look!

Start with the essentials:

  • What furniture and practical resources will you need to purchase? Think about high chairs, cots, changing equipment, play mats, children's tables and chairs, and facilities for staff.
  • If you have an outdoor area, what outdoor furniture and equipment will you purchase? A covered area for pushchairs? Benches? A playhouse? Climbing equipment? Ride-on toys? A sand table? An area to grow plants and vegetables? 

Consider how your resources will support children's learning and development

You could start by researching the types of resources available at other childcare settings. Choose your resources carefully:

  • How do they support you to provide a variety of rich learning experiences for children?
  • How do they link to the areas of learning set out in the EYFS in England or support children's holistic development in line with the curriculum in Wales?
  • How will you ensure that your resources are culturally diverse and cater for all children?
  • How will you avoid gender stereotypes and restrictions? (This goes much wider than resources, but it's a good place to start). Read our blog on gender stereotypes.
  • Will you have a particular approach to toys, such as Montessori?
  • Will you provide a range of 'real' resources to provide an authentic experience for children?
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