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Setting up a Day Nursery Business

All you need to know about starting and running your business

Business guides » Setting up a Day Nursery Business

What is a Day Nursery Business?

Although the number of children and infants attending day nurseries in the UK fell during the Covid-19 pandemic, figures are once again on the rise. More than 800,000 children currently attend early years settings, such as nurseries, nursery schools and childminders.

The most recent figures from Statista show that there are more than 72,000 early years settings in the UK, with approximately 3.78 million children younger than five years old that are eligible to attend.

A day nursery is the most well-known of early years settings. A day nursery is an early years setting that cares for children between 6 weeks and 5 years old. When setting up your day nursery business, you can choose the age of the children you are willing to care for.

A day nursery can be run by the local authority, by a volunteer group, be attached to a local primary school (this type of nursery is known as a nursery school) or be run privately. As you are setting up a day nursery business, your nursery will likely be run privately.

Day nurseries usually open for longer hours compared to nursery schools, as they aim to cater for working parents. The majority of day nurseries in the UK are open between 7am and 8am. They usually close between 5:30pm and 6:30pm.

The typical operating days are Monday–Friday. Unlike nursery schools which usually open during term time and close during the school holidays, a day nursery usually only closes for bank holidays and a Christmas break.

Regardless of the type of nursery you run, you will need to ensure your learning curriculum is in line with the curriculum provided by the relevant governing body.

The governing body varies, depending on which country of the UK your business is based:

  • England: The Early Years Foundation Stage (EYFS) curriculum.
  • Wales: The Foundation Phase Curriculum.
  • Scotland: The Early Years Framework (EYF).
  • Northern Ireland: The Curricular Guidance for Pre-School Education.

 

When setting up a day nursery business, you will need to ensure you design your business and your premises in a way that makes it safe, engaging and conducive to the children’s development. Although you will want to ensure you maximise your profits, you will still need to ensure your business is child-centred.

When starting up a day nursery business, there are certain criteria you will need to fulfil:

  • Consider ways to encourage physical, social, emotional and educational development.
  • Implement a keyworker system whereby each child is assigned a keyworker, especially younger children.
  • Ensure separate rooms or areas for children of different ages.
  • Ensure toys, equipment and facilities are appropriate, safe, bright and engaging.
  • Employ staff who are qualified and experienced.

 

Day nurseries usually charge parents per day, although you may choose to charge per hour. You will likely provide all meals (breakfast, lunch and dinner), snacks and drinks. Provisions should be made for any child that has allergies or follows a special diet, such as halal, vegetarian or vegan. Meal costs will be included in your pricing.

If you are considering starting up a day nursery business, you should ensure you have the necessary skills to make your business succeed. If you don’t plan to be involved in caring for or teaching the children, you may not require any specific qualifications or experience.

However, having the relevant training and experiences may make your business more attractive to prospective parents. Having an understanding of the curriculum, a passion for education and a love for children is also important.

You will also need good leadership skills and a flair for business. As you will be taking care of children, a knowledge of the relevant laws and regulations and an understanding of health safety is imperative.

Types of Customers

Parents generally choose day nurseries that are close to where they live or work, so dropping off and collecting their child each day is convenient.

However, parents will also want to consider other factors when choosing their child’s day nursery, such as:

Your Ofsted (or other relevant governing body) rating

Your day nursery business will be inspected within the first 30 months of opening and then approximately every 6 months thereafter. You may receive additional inspections if there are any concerns, or you undergo significant staff changes.

Ofsted will give you a rating of:

  • Grade 1: Outstanding
  • Grade 2: Good
  • Grade 3: Requires Improvement
  • Grade 4: Inadequate

Most parents will opt for a nursery that has been rated as either Good or Outstanding.

Your food hygiene rating 

Day nurseries are inspected as part of the Food Hygiene Rating Scheme (FHRS).

Your business will be given a rating between 0 and 5:

  • 5: Hygiene is very good.
  • 4: Hygiene is good.
  • 3: Hygiene is generally satisfactory.
  • 2: some improvement is necessary.
  • 1: major improvement is necessary.
  • 0: urgent improvement is necessary.

Parents generally look for a nursery that has a rating of 4 or above.

Your facilities and equipment

Prospective parents will usually attend a tour of the nursery before signing their child up. They will want to look at the facilities and equipment you have, the indoor and outdoor space that is available and whether your facilities, equipment and toys will support the development of their child.

The qualifications and experience of your staff

Training and qualifications can help ensure your staff operate at the highest possible standards. It can also help to protect the health and safety of your staff and the children.

The ages you accept in your nursery

Some nursery businesses don’t accept babies younger than 6 or 12 months whereas others don’t accept pre-school aged children (4 and 5 years old). If you opt to only care for children of a specific age, this can influence your custom.

Your opening hours

Working parents will need a nursery that opens during the hours that best suit their profession. For example, they may need to choose a nursery that opens at 7am rather than one that opens at 8am.

Child playing outside
Childs bike
Baby drinking bottle

Equipment You Will Need

When setting up your day nursery business, the equipment you choose will be pivotal to the success of your business.

The equipment you require will vary depending on the size of the rooms, your outdoor space, and the age of the children you care for.

Some of your equipment requirements may include:

Baby room equipment:

Your baby room will have specific equipment requirements.

This could include:

  • Cots, beds or sleep mats.
  • Prams or pushchairs.
  • Blankets and pillows.
  • Changing mats.
  • Baby changing supplies, such as wipes and nappies.
  • Baby seats and feeding chairs.
  • Bibs.
  • Low tables and chairs.
  • Sensory toys and equipment.
  • Teethers.
  • Discovery play mats.
  • Push and pull toys.
  • Walking aids.

Toys:

Any toys or resources you buy should be age-appropriate for the children in that room. They should also be educational, engaging, fun, safe and reliable.

You will need different toys for different ages. You may buy similar toys in different varieties, to ensure they suit the age and development of the children in that room.

Some toys you may want to buy for your day nursery business are:

Arts and crafts supplies, such as:

  • Paint.
  • Colouring pencils and crayons.
  • Chalk.
  • Aprons.
  • Paper and card.
  • Easels.
  • Playdough and other modelling materials.
  • Glitter, sequins, feathers and other decorations.
  • Scissors and glue.

 

Role-play toys, such as:

    • A doll’s house.
    • Toy figures.
    • Kitchen areas.
    • Shopping tills and accessories.
    • Animals.
    • Cleaning toys (e.g. hoover, mop, sweeping brush).
    • Trains and train tracks.
    • Cars and other vehicles.
    • Dressing up clothes and accessories.
    • Food, plates and utensils.

 

Construction toys, such as:

  • Building blocks.
  • Building bricks.
  • Models.

 

Electronic or battery-operated toys, such as:

  • Musical instruments.
  • Microphones.
  • Remote control vehicles.
  • Interactive toys.

 

Other toys, such as:

  • Jigsaws and puzzles.
  • Magnetic letters and numbers.
  • Sorting and stacking toys.
  • Cuddly toys, such as teddy bears.
  • Puppets.
  • Sand and water tables and accessories.
  • Books.
  • Board games.
  • Soft play toys that the children can climb, sit on, or play on.
  • Sensory toys.
  • Tents and play mats.

Outdoor equipment:

You may have different outdoor areas dedicated to the different ages of the children you care for. You may want to cover some or all of your outdoor flooring with protective materials, to help reduce the risk of injury if any of the children fall.

Some outdoor equipment you may require includes:

  • Play equipment such as slides and a climbing frame.
  • Bicycles, tricycles and scooters.
  • Other ride-on equipment.
  • Tunnels.
  • Balls of different sizes.
  • Sand and water play areas.
  • Skipping ropes.
  • A playhouse or tents.
  • A mud kitchen.
  • Child-friendly gardening tools.

Other equipment requirements:

  • Fire safety equipment, such as fire extinguishers and smoke alarms
  • Fully stocked first aid kits (one for each room).
  • Cleaning equipment.
  • Spare clothes (in different sizes).
  • A music player or CD and DVD player.
  • Computers and laptops.
  • A website.
  • Mobile phones and landline phones.
  • A camera.

Furniture:

Each room will have specific furniture requirements.

Some of the furniture your day nursery business may need includes:

    • Tables and chairs that are suitable for different ages.
    • Beanbags.
    • Bookcases or bookshelves.
    • Adult sized chairs for your staff and any visitors.
    • Shelves, cupboards and other storage areas.
    • A washing machine and dryer.
    • Personal products for children, such as wipes and nappies.

Kitchen equipment:

Day nurseries usually provide food for the children. Depending on the hours you open, you may provide breakfast, lunch, dinner and snacks. Your kitchen equipment will need to be safe, reliable and an appropriate size for the number of children you care for.

Some equipment you may need in your kitchen are:

      • An oven and grill.
      • A fridge and freezer.
      • Kitchen utensils, such as knives, spatulas, spoons and ladles.
      • Cooking accessories, such as rolling pins, graters, weighing scales, colanders and sieves.
      • Food processors and blenders.
      • Chopping boards.
      • Temperature probes.
      • Child-friendly plates, bowls, cups and cutlery.
      • Personal Protective Equipment (PPE), such as hair coverings, aprons and gloves.
Young children in day nursery

Typical Pricing

Although a day nursery business can be extremely profitable, it will also have high start-up costs and running costs.

To help you better plan your business and your finances, take a look at the typical costs you can expect when setting up and running a nursery.

Premises

The premises for your day nursery will likely be your biggest expenditure. You may choose to purchase a building and convert it or build your nursery from scratch. Alternatively, you could purchase an already existing nursery business. If you are not in a position to purchase your premises, you could look at your rental options. Prices can vary significantly based on your location, the amount of land you are purchasing and any existing infrastructure.

Renovation, refurbishment and installation

You will likely need to renovate or refurbish your premises to incorporate the room divides and the furniture and equipment you need for your day nursery business. You will also want to design and decorate your nursery to make it attractive to children and their parents. Renovation costs can vary, depending on the level and scale of work required.

Equipment

Equipment will be a big expenditure when starting up a day nursery business. Although you can buy more equipment as your nursery grows, you will need to have appropriate toys and equipment for each age group straight away. Prospective customers will also likely view your nursery before signing up their child and if the equipment you have is not as good as your competitors, this can make them less likely to choose your nursery. As the safety of the children is paramount, you may want to purchase your equipment new, rather than second-hand. Your equipment costs can start at £10,000 and go as high as £100,000.

Repairing and replacing equipment

Your equipment will need to be inspected regularly to ensure it is safe to use. Any equipment that shows signs of damage or could be unsafe should be repaired or replaced. Young children can also be heavy-handed, and equipment may become broken or damaged frequently. Maintenance, repairs and replacements can cost you upwards of £1,000 a year.

Insurance

Your day nursery will have several insurance requirements, including:

      • Public Liability Insurance.
      • Employers’ Liability Insurance.
      • Equipment Insurance.
      • Legal Expenses Insurance.
      • Personal Accident Insurance.
      • Loss of Revenue Coverage.
      • Professional Indemnity Insurance.

The cost of insurance can vary, depending on your insurance provider and the level of coverage you require. Prices can start at £15 per month.

Running costs

These are the everyday costs associated with running your business. They could include rent or mortgage payments, electricity, gas, water and taxes. Some of your running costs will be paid monthly, whereas others will be quarterly or annually.

Food and ingredients

Plan your menus in advance and buy as much of the stock and ingredients in bulk as possible, as this can help to save money overall. Calculate how much of your nursery fees will account for feeding the children and try to ensure that your stock and ingredients don’t exceed 40% of this cost. This is because you will also need to account for paying your kitchen staff, buying equipment and the time spent preparing, cooking and cleaning.

Staff

You may need to employ a nursery manager, nursery assistants, nursery practitioners, room and team leaders, a chef, other kitchen staff and cleaners. You may also require administrative staff, such as a Human Resources manager and a finance department. Your staff will have different wage requirements, depending on their role in the nursery, their qualifications and their previous experience.

Branding

Branding can help you to establish your nursery business’s identity and set you apart from any local competition. Branding could include creating your business’s visual identity, a logo, your business name, and your business website. You can hire a professional to help you with branding or do some of the work yourself. Branding can cost between £500 and £10,000, depending on the amount of branding you require.

Marketing and advertising

This can help you to grow your business. It is recommended that you spend no more than 10% of your annual revenue on advertising costs. As many of your children will move on to start school every year, you will need to advertise for new children every year.

Once you have established your start-up costs and running costs, you can then calculate your pricing strategy.

The average cost of sending a child to a private day nursery in the UK is £53 per day or £263 per week.

However, these costs can vary significantly, depending on several factors, such as:

      • Your location – Nurseries located in big cities or middle- and upper-class areas may charge higher fees.
      • Whether the child is full time or part time.
      • The age of the child – Nursery fees are generally higher for children under two years.
      • Whether the child has a sibling at the nursery.
      • Your facilities and equipment.

Safely Running a Day Nursery Business

Safely running your day nursery business and implementing safety procedures will be a top consideration when setting up your business.

Safety procedures can help you to ensure the health and safety of the children, your staff and any visitors to your nursery.

Some safety considerations you should make include:

Ensure all equipment and furniture adhere to safety standards

You must also ensure equipment and furniture are regularly maintained and inspected for signs of damage. It must be set up or installed correctly to ensure safety standards are met.

Conduct risk assessments

Risk assessments are an essential requirement in nurseries. They can help to protect the children you care for and your staff.

Your risk assessments should:

      • Identify hazards.
      • Determine who could be at risk.
      • Evaluate the potential risks.
      • Implement safety measures.
      • Record the results of the risk assessment.

You should review all risk assessments on a regular basis.

Implement a cleaning policy

Nurseries are often full of germs. This means that illnesses and infections can spread easily. You should implement a cleaning policy and cleaning procedures, including a schedule for cleaning, the management of cleaning materials and equipment and the cleaning processes all staff will follow. Cleaning procedures should apply to all areas of the nursery, including equipment and furniture.

Implement a handwashing policy

Germs and bacteria spread very easily on hands. You can implement handwashing procedures that apply to staff and children. Teaching children how to correctly wash their hands and implementing a schedule, such as washing hands before mealtimes and after playing outdoors, can help protect the health and safety of everyone in your nursery.

Appoint trained first-aiders

All nursery businesses must have an appointed first-aider on the premises at all times. In the event of an accident or injury, you will then be able to administer the necessary first aid. Although a first aid qualification or certificate is not legally required, it is the easiest way to demonstrate your first aid training to the parents and the relevant governing body.

Children eating
Baby safety gate in nursery

Keep bins and waste away from children

This is to prevent children from touching the bins or handling the waste. Bins should be kept in staff-only areas that are not accessible to children.

Implement emergency procedures

You will need to implement procedures in the event of fires and other emergencies. All staff should be aware of the procedures, and they should be displayed around your nursery for easy access. Running emergency drills is also recommended.

Protecting staff from abusive or threatening behaviour

As the business owner, it is your responsibility to protect your staff from threats or abuse. Implement procedures for dealing with threatening behaviour, record any incidents and ensure you support your staff as much as possible.

Keep dangerous objects away from children

This includes cleaning products, knives, scissors and heavy equipment. Any potentially dangerous objects should be kept out of the reach of children at all times, and where possible in separate rooms.

Implement security measures

Security measures can help prevent the children from escaping from your nursery. They can also help to protect your nursery from break-ins. You could install a CCTV system, a reliable lock and an alarm system to help protect your business and the children.

Safety proof your nursery

As you will be looking after babies and toddlers, you will need to safety proof the indoor and outdoor areas of your nursery.

Some ways you can do this are:

      • Install safety gates.
      • Use soft close toilet lids and doors.
      • Cover furniture edges.
      • Use plug socket covers.
      • Don’t use looped cords, leads and other cords that could result in a risk of strangulation.
      • Install window restrictors.
      • Tie up or cover electrical cables.

Legal Requirements

When setting up and running your day nursery, it is essential that you adhere to the legal requirements at all times.

The early years and childcare industry is heavily regulated, and you will need to be subject to regular inspections. During your inspections, your observance of the relevant laws and guidelines will be scrutinised.

Some legal requirements you will need to adhere to are:

Register with Ofsted

You must register your day nursery business with the Office for Standards in Education (Ofsted). The registration process will look at the nursery’s ability to provide care that will conform with the 14 national standards for day care and childminding.

Adhere to the child to adult ratio guidelines

There are strict guidelines regarding the minimum ratio of staff to children.

The ratio requirements change depending on the age of the children:

      • Under two years old: one adult to three children
      • Two to three years old: one adult to four children
      • Three to seven years old: one adult to eight children

Keep in mind that a group of children should never exceed 26, regardless of how many adults are present.

Adhere to space per child ratios

The guidelines specify that you must adhere to specific guidelines regarding the space per child.

The ratio changes depending on the age of the children:

      • Under two years old: 3.5 square metres per child
      • Two to three years old: 2.5 square metres per child
      • Three to seven years old: 2.3 square metres per child

You must also ensure there is a minimum of one toilet and one handwashing facility for every 10 children above two years of age.

Ensure staff have the correct qualifications

Legal guidelines state than at least 50% of your staff must have a childcare qualification.

Examples of the qualifications your staff could hold are:

      • Level 2 Certificate in Childcare.
      • NCFE CACHE Level 3 Diploma in Child Care and Education.
      • BTEC National Diploma in Children’s Care, Learning and Development.
      • NVQ Level 3 in Children’s Care, Learning and Development.

Adhere to the EYFS

The Early Years Foundation Stage (EYFS) is a statutory framework set out by the Department for Education (DfE). It sets out the standards that school and childcare providers must adhere to for the learning, development and care of children five years of age and under.

Follow the correct early years curriculum

As mentioned earlier, different countries in the UK follow a different early years curriculum, as set out by the relevant governing body. Ensure you have a thorough understanding of the relevant curriculum and implement it in your nursery.

Ensure all staff have an up-to-date DBS check

A Disclosure and Barring Service (DBS) check looks for any previous criminal convictions and checks you are fit to work in a nursery. All staff and volunteers at your nursery require an up-to-date DBS certificate.

Adhere to food safety and hygiene standards

You will need to follow hygiene regulations when storing, handling, cooking and serving food. You should also ensure your staff are correctly trained in food hygiene. Any staff members who are involved in food handling, preparation, serving or another aspect of the food process, will require a Level 2 Food Hygiene Certificate. Chefs, kitchen staff and the nursery manager will need a Level 3 Food Hygiene Certificate.

The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013

RIDDOR states that you must report all injuries, diseases and dangerous events that occur in your nursery. Reports must be made to the Health and Safety Executive (HSE) using an appropriate recording document.

Apply for a Childcare and Children’s Social Care Health Declaration Form

This form must be completed before your register with Ofsted. It includes an up-to-date medical declaration from you and your GP. Without this form, you cannot register with Ofsted or set up your day nursery business.

Purchase insurance

Some types of insurance, such as Public Indemnity Insurance, are legally required, whereas others are only recommended. Contact your insurance provider for more information.

Implement health and safety policies

Health and safety policies are legally required for all businesses in the UK. You should have policies in place that protect the children, staff and any visitors to your business. If you have five or more employees, your health and safety policies should be recorded. Your policies should also include fire safety procedures and emergency procedures.

The Electricity at Work Regulations 1989

The Electricity at Work Regulations state that any workplace that uses electricals must construct electrical systems in a way that prevents danger. You must also maintain electrical systems to ensure they are safe and ensure electrical equipment is checked by a competent person annually. Conducting Portable Appliance Tests (PAT) is also recommended.

Control of Substances Hazardous to Health (COSHH) 2002

COSHH is the law that states that all businesses, including nurseries, must control any substances that could be potentially hazardous to health. In line with COSHH, you must assess, control and reduce any risks or potential hazards and protect individuals from harm.

Keep clear records

You should keep up-to-date records of your clients, the cleaning schedules, risk assessments, health and safety policies, and food hygiene policies. Ofsted will likely want to see your records when they conduct their inspections.

Comply with employment legislation

As you will be employing staff, you must ensure you follow employment legislation. You must comply with legislation relating to recruitment, working hours, pay, sickness, discrimination, dismissals, and maternity or paternity pay.

Apply for a Notification to Process Personal Data Licence

You can apply for this licence with the Information Commissioner’s Office (ICO). If your day nursery has a CCTV system or processes personal information such as payroll information or accounts and records, you will need to apply for a licence with the ICO and renew your registration every year.

Apply for planning permission

You will likely need to apply for planning permission to convert your building into a day nursery. You may need to extend the building, partition the space to make extra rooms or build some structures in the outdoor area. To apply for planning permission, you will need to contact your local planning authority (LPA) via your local council.

Parent leaving child in day nursery

Positives of Owning a Day Nursery Business

Owning a day nursery business can be rewarding in multiple ways. It can be both a financially and emotionally rewarding career path.

Some of the main positives of owning a day nursery business are:

Be a positive role model

The children will spend a lot of time with you, especially if they attend nursery full time. You will become a person they trust and depend on. Working so closely with children allows you to teach them important life skills and socialisation skills and help their development. You can be a positive role model and hold a special place in the child’s and their family’s hearts.

It can be a lot of fun

If you take a hands-on approach to running your business, you will be spending a lot of time playing games, singing and dancing and doing arts and crafts. You can even plan and design a lot of the activities yourself. You can have fun every day at work.

Rewarding work

Running a day nursery can be very rewarding. If you love children and spending time with people or enjoy the organisational aspects of running a day nursery business, setting up this type of business can be very rewarding.

Unlimited income potential

There is no limit to the amount of money you can make from a day nursery business. If you operate at full capacity, expand your nursery or even open additional sites, this can help to maximise your profits.

Be your own boss

You can make all key decisions yourself and steer your business in whichever direction you choose. You can choose how involved you want to be, the employees you hire and make the best decisions for you and your business.

Be involved with the local community

Children are the centre of most communities, and as a nursery owner you will develop an important connection with your local community. You can get involved in local events and get to know many local families. You will even see infants and children you used to care for growing up.

Free childcare for you and your staff

If you have young children of your own, you can bring them to the nursery and save yourself a small fortune in nursery fees. You will also know your child is receiving the best possible care and is being stimulated and encouraged.

Standard working hours

Owning a nursery business means you won’t have to work evenings or weekends. You can also reduce your hours and leave your nursery manager or another member of staff in charge.

A constant need for your business

Early years businesses will always be in demand as people need childcare for their little ones or want to aid their development and education before they begin school. You will never have to worry about your business not making a profit or experiencing a lack of demand.

High customer retention

Once a child starts attending a nursery and makes connections with staff and other children, they are likely to remain at your nursery for several years until they begin school. You are also likely to have multiple siblings from the same families and have parents recommend you to other family members or friends.

Predictable income stream

You will know exactly how many children you have at your nursery and how many available places there are. Parents often pay for each term upfront or arrange a payment scheme ahead of time. This makes it easier to predict your income.

Design your dream business

You can design your nursery business exactly how you want. You can choose the design of the nursery, the type of toys you purchase, the activities and the staff. Creating your dream business can be both fun and rewarding.

Day nursery staff keeping up high energy

Negatives of Owning a Day Nursery Business

Although running a day nursery business can be rewarding, there are some negative aspects you should be aware of.

You need to be constantly aware

Working in a nursery, you need to be hyperaware at all times. The little ones you work with can accidentally hurt themselves or others, eat something they shouldn’t or even run away. If you are not aware at all times, a child could sustain an injury or have an accident and you may be held liable.

You need constant high energy

Even if you are having a bad day or feel unwell, you need to keep up high energy to display a positive attitude and to keep the children engaged. This can be exhausting.

Strict laws and regulations

Nurseries are highly regulated and there are many laws and regulations you will need to abide by. You will need to research your legal requirements and ensure your nursery is operating in line with the law. Failure to do so could result in a fine, the forced closure of your business or even prosecution.

High liability

If a child or employee becomes injured, contracts food poisoning or is involved in an accident, you and your business could be liable. Children are vulnerable to injuries or illnesses and ensuring the health and safety of everyone in your nursery can be stressful.

Your role can be demanding and stressful

Not only will you be responsible for making your business succeed and ensuring safe practices, but you will also likely be in charge of the administrative duties and day-to-day running of the business. As the owner, you will also have to deal with parents’ worries, concerns or complaints. This can be both demanding and stressful.

It can be physically exhausting

If you work hands-on in your nursery, you will be on your feet for a lot of the day, carrying children, bending down, moving toys and playing on the floor. The physical strain can result in aches, pains and even injuries.

High start-up costs

You will need to pay for your nursery premises, renovation and refurbishment costs and the facilities, equipment and toys. Your start-up costs will be extremely high, and you may have to source outside investment. It also makes your business higher risk and will take you longer to start turning a profit.

Can be competitive

You will be competing with other day nurseries, nursery schools, childminders and other early years settings. Having multiple settings to compete with can make it more difficult for your business to succeed.

Motivation of employees

Although you will have the power to hire your employees, it can be more difficult to control their motivation once they are working for you. If your staff are unmotivated, have a negative attitude, or don’t follow your business values, this can be harmful to your business and difficult for you to deal with.

Planning Your Business

When starting up a day nursery business, you will need to create a business plan.

Some considerations you will need to make are:

What ages are you going to cater for?

This is one of the first considerations you will need to make. Determine the minimum and maximum ages you are willing to accept in your nursery and how this will affect your staffing and equipment requirements.

How many children will you be able to cater for at one time?

The size of the building and the number of staff you employ will influence your available places. The ages of the children will also influence your available places. Determining how many children you can care for can help you determine your marketing strategies and your pricing and calculate your potential profits.

What are your training and qualification requirements?

Specific training and qualifications can help ensure the health and safety of the children at your nursery and can help to improve your nursery’s curriculum and child development programme. It can also make your nursery more attractive to prospective customers. Determine what qualifications and training you want your staff to already hold and which training you will provide them with.

What are your equipment requirements?

Consult the list above to determine your equipment requirements. The equipment you require will depend on the ages and number of children you care for. Calculate the cost of the equipment and whether there is any equipment you can purchase at a later date.

What are your start-up and running costs?

Calculating your start-up costs, your estimated costs monthly and annually, staff wages, overhead costs, and operating costs is a key part of planning your business. It allows you to determine your initial investment and whether you can fund this yourself or require outside investment.

What will your pricing strategy be?

Once you have calculated your start-up costs and running costs, you can then calculate your pricing. Consider how much money your day nursery business needs to make per month and what fees you need to charge. Look at your competitors’ pricing and consider the average income in your local area when determining your pricing strategy. Your pricing policy should be transparent and easy to understand.

What is your local competition?

Parents will likely tour multiple nurseries before making a decision, meaning it is important you are aware of your local competition. Being aware of your local competition can help you determine how to make your nursery business a success. Look at how to make your nursery stand out and how to attract customers.

What are your staff requirements?

Staff are an essential part of your nursery business. You will need to hire staff before you open your business and ensure they have the necessary training. Consider how many staff you need to hire and their expected wages.

What are your business objectives?

When creating your business plan, you will need to determine your business objectives. Planning the future of your day nursery and creating a one-, three- and five-year plan can be pivotal to the success and growth of your business. Having clear business objectives and a business plan can help to attract prospective investors and help you to identify which aspects of your nursery require a particular investment.

Your business objectives should be SMART:

      • S = Specific
      • M = Measurable
      • A = Achievable
      • R = Realistic
      • T = Time bound

Do you have all of the necessary licences and have you complied with all legal requirements?

Consult the list of legal requirements above and ensure you fully comply when setting up and running your day nursery business. Failure to comply with the legal requirements could have a detrimental effect on your business or could result in a fine, the forced closure of your nursery or, in serious cases, prosecution.

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