Welcome to our complete guide on how to start a nursery. If you have a lot of patience and a passion for working with children, starting a nursery could be the business for you.
But, working with children means strict rules and regulations need to be met. Here we outline your legal obligations and answer your questions to help you make your nursery business a success. Follow our guide on how to open a nursery to kick start your business planning.
1. What qualifications do I need to open a nursery?
When considering how to open a nursery, you don’t have to have any relevant childcare or nursery qualifications, as long as your staff team meets the set criteria. What you will need though is a strong head for business and excellent attention to detail. Running a nursery safely means always following the appropriate health and safety rules, and there will be lots of things to coordinate, so it will help to be good at multi-tasking.
If you plan on managing the nursery yourself, you will need childcare qualifications and experience. The manager of a nursery must have at least two years experience as a qualified nursery nurse, 1-2 years experience in a supervisory role, and a relevant nursery qualification.
2. How do I find qualified nursery staff?
When starting a nursery, staff should be at the forefront of your business plan. All your members of staff must be deemed ‘suitable’ to look after children. That means they’ll have had the appropriate police checks. At least half of your staff will need to hold a minimum level 2 qualification for a day-care setting.
Action point
- Use the government’s early years qualifications tool to check if someone’s qualifications allow them to work in an early years setting: qualifications finder
- You can advertise for staff in your local paper on a dedicated website like nurseryworldjobs.co.uk
3. How many members of staff will I need to employ?
The number of staff you employ will depend on the number of children you have in your care. The maximum number of children in a group should not exceed 26. The National Standards for Day Care and Childminding regulations (2003) sets the following minimum staff: child ratios
- For children aged up to 2 years: 1 member of staff for every three children
- Children aged 2-3 years: 1 member of staff for every four children
- Children aged from 3-7 years: 1 member of staff for every eight children
4. What washroom facilities will I need to supply?
The National Standards for Day Care and Childminding regulations state that you need to provide at least one hand wash-basin with hot and cold water for every ten children over the age of 2 years old.
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5. Health and safety requirements
All members of staff will need to have full Health and Safety training and induction in Child Protection procedure within a week of working for you.
Your premises must be ‘safe and secure’ and furniture and equipment, such as play equipment, must be well maintained and meet British safety standards.
Action point
- PAT testing is an annual check to ensure electrical items are safe for use. It’s not a legal requirement, but it does prove that electrical goods are safe. Because a nursery is a high-risk environment, carrying out regular PAT testing can give you peace of mind that you are meeting your legal obligation to ensure the safety of your employees and the public.
- Put a health and safety policy in place. Your policy should include:
- A risk assessment
- Fire safety and risk assessment
- How you’ll report injuries
- How manual handling should be carried out
- Emergency evacuation procedures
- How abuse towards staff will be handled
- How substances hazardous to health will be handled
- Maintenance procedures
6. How do I register my nursery?
Before you open up your nursery doors and welcome families, you’ll need to register your nursery business. To register, you’ll need to be able to demonstrate that you meet the ‘14 national standards’.
To apply for registration, you must be aged 18 years or older and have the right to work in the UK. You must also undergo a Disclosure and Barring Services (DBS) check. bear in mind that you can apply as an individual or as an organisation.
You can apply for the Early Years Register, The Childcare Register, or both. If you care for children aged under three years old, you’ll need to apply for the Early Years Register. If you only have children older than three years old, apply for the Childcare Register. or, if you have both, you’ll need to apply for both.
Action point
- Check if you need to register your business as there are some exemptions. Read the guide here. Even if you don’t have to register by law, you may decide to do so voluntarily.
- If you meet the criteria that require registration, you can read the full guidance booklet
- Apply for your DBS check here
7. How much does it cost to register my nursery?
This depends on the type of childcare you offer and whether you are applying for the Early Years Register, The Childcare Register or both. The maximum cost to apply for both was £220 in 2017, although this figure could change.
Essential paperwork like insurance
8. What about food safety?
If you’re preparing food or drinks for the children in your care, you’ll need to pay close attention to food safety. Any premises where food is handled must follow food safety legislation. You’ll need to have a written food safety management system in place. This could include monitoring and recording fridge and freezer temperatures daily as well as ensuring all staff who handle food have the correct training.
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If you are responsible for developing and maintaining your nursery’s food safety management system, then you’ll have to have the appropriate training.
Action point
Safer Food, Better Business information packs from the Food Standards Agency detail key areas of food safety including:
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- Cross-contamination
- Cleaning
- Chilling
- Cooking
- Management
They will help you to:
- Follow food hygiene regulations
- Improve your food hygiene rating score
- Know what to do to make food safely
- Train your staff
- Protect your business’s reputation
- Improve your business
Download your pack here
9. Other paperwork essentials
Starting a nursery has a lot of factors, but managing your nursery effectively once it’s open is just as important. When it comes to managing your children’s nursery, insurance is an essential piece of paperwork you’ll need to get right. No matter how well trained your staff and how strictly you follow health and safety procedures, things can and do go wrong. If something unfortunate does happen, you can rely on your insurance to help you manage financially and protect your livelihood.
Action point
Critical areas of insurance for children’s nurseries include:
- Public liability. Paying your legal costs in the event of injury to a member of the public, such as a child, or damage to property because of something to do with your business. This can include covering your staff for administering non-prescribed medication, such as Calpol, allergic reactions to mislabelled food, and trampoline injuries.
- Employer’s liability. This is a legal essential if you employ any members of staff. It pays your legal fees if a member of the team is hurt or property is damaged because of something to do with your business.
- Professional indemnity. Covers you if your expert advice is wrong.
- Commercial property insurance. Covers your premises in the event of fire, flood or theft. This can include all your contents too.
- Cover away from the nursery. If you plan to take the children away from the premises (for example on a trip to the local petting zoo), you need to ensure your insurance package includes cover away from the business address.
- Loss of Registration insurance and Business interruption insurance. This pays out an agreed amount if your business is forced to close for a period.
- Personal Accident cover. If your business relies on you, personal accident cover will give you peace of mind you’ll be financially compensated if you have an accident and can’t work for a period of time.
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10. Can I set up a nursery in my own home?
Yes, you can. But it can take a while. You’ll need to apply for planning permission, and if local residents aren’t keen, it may take a while for the permission to be granted.
Action point
To apply for planning permission, get in touch with your local district council.
- Find your local council here.
11. Finding suitable business premises
If you don’t want to set up a nursery in your home, your first step needs to be to find suitable premises.
Action point
Go to look at potential premises with a checklist in your hand. Things to think about include:
- Location: Is the proposed venue conveniently near to plenty of family homes? These could be your customers.
- Convenience: Is there easy parking for staff and for parents to drop off and pick up or is it close to a bus route?
- Space considerations: Is there safe outside space? Will it be easy to make the venue safe for children?
- Competition: What other nurseries are operating nearby. Do they offer a similar service to you? Are they already full, suggesting there is scope for further nursery provision in the locality?
12. How big does my nursery need to be?
When researching how to set up a nursery, the size of the nursery is very important. Guidelines require the following space for children:
- Up to 2 years old: 3.5 square metres per child
- Aged 2-3 years: 2.5 square metres per child
- Aged from 3-7 years: 2.3 square metres per child
13. Nursery set up costs
The setup costs to start a nursery can vary. The most significant cost is likely to be your premises. Depending on the size and location of your chosen site, your purchase or rental costs can be very different.
Next, you’ll need to consider staffing costs. These can vary depending on where in the UK you are. The average salary for people working in a nursery is £19,000.
14. Nursery profit margins
Making your nursery business profitable will take a lot of juggling. The numbers of children in your care can fluctuate throughout the year, for example, you’re likely to have fewer children at the start of the school year in September. But you’ll need to balance your staffing levels, so you’re able to take on new children throughout the year.
To work out how much profit you could make, you’ll need to find out how much other local nurseries charge. Is there something different about your nursery that means parents will pay more?
After staffing costs, the next biggest draw on your budget is likely to be your rent. Before you take on a lease, make sure the numbers add up, and you will expect to turn a large enough profit to cover rental costs.
Action point
Take a pencil and paper and write down all the likely costs that you will face. This could include:
- Staff costs
- Rent
- Utilities, like water and electricity
- Cleaning costs
- Insurance
- Toys and craft materials
Don’t forget to factor in your salary.
Then work out how many children you expect to have in your care and how much they will be paying. Don’t forget extra costs you may be able to charge to parents, such as snacks or meals. All 3 and 4-year olds are eligible for up to 30 hours a week free childcare. You’ll get a payment from the government to cover this at a rate of £4.30. But this does not have to cover snacks and meals, or activities like trips out. That means you can still bill parents separately for this. Just make sure you are very clear on what is and isn’t included under the government scheme.
You should now have two amounts. Make sure that the amount of money you expect to make is higher than the amount you expect to pay out to ensure your nursery business is profitable.
Your new nursery as a business
You may have a pretty good idea of how to start a nursery regarding rules and regulations, but you will also need to consider the business side of things if you want your enterprise to be successful.
Compiling a business plan will help you keep track of each stage of the process. You can use your business plan to help secure financing or guide your path through this challenging but fun process. If you haven’t created a business plan before, the Prince’s Trust offers excellent guidance and a handy template.
An important part of your business plan is working out how to attract clients to your nursery. Here you can think about how to build your nursery brand and advertise it successfully.
Market research
Market research is an important consideration when considering how to start a nursery business. Marking the highest level in 20 years, now three in four mothers are in employment, meaning childcare providers are in demand. High demand means that your nursery will have stiff competition, so conducting market research early in the process will be a wholly beneficial exercise, allowing you to tailor your business plan to your chosen target market.
Make an appraisal of your local competitors. Do they have many spaces available? What type of setting are they offering, and what is their rate? Once you’ve ascertained that there will be demand for places at your nursery, try to work out what your unique selling point will be, for example:
- Flexible hours
- Specialist teachers
- Bilingual staff
- Outdoor learning
- Extra-curricular opportunities
- Catering to specialist diets
It’s important to understand the demographic of parents who might use your nursery. Research the average wage in your area and use this to calculate your fees. Register your nursery for the Tax-Free Childcare Scheme to encourage inclusivity.
Building your nursery brand
First impressions count for a parent or carer looking for a nursery. Especially when you’re setting up new premises and opening your nursery, you won’t have word of mouth to rely on yet, so you need strong branding to tell the story of your nursery, what it offers, and its childcare ethos. You’ve already asked, what qualifications do I need to open a nursery? Make sure your branding showcases the qualifications and skillsets within your new team.
If you have no experience in branding, consider sourcing an expert. Begin with a fantastic name and logo, and you can start using this branding across all your communication platforms, from your website and letterheads to staff uniforms and your premise’s signage.
Your website is an important marketing tool, and a branding consultant will show you how to use images and content to quickly communicate your nursery’s ethos to the reader. Though there are many self-build websites available, you may prefer to work with a web developer for a more professional finish that will make the best impression on potential clients.
You can also use social media platforms but be mindful of image-sharing rules if you’d like to use photographs of the children who start attending your nursery, seeking signed permission from the parents and never naming the child online.
When the nursery is ready to go, organise open days and tours to let parents explore your premises and meet your staff.
What will it cost?
Thinking about how to set up a nursery UK requires a good head for figures. There are two main costs you need to consider when compiling your business plan: the start-up and the running costs.
You may need to budget up to £100,000 for nursery start-up costs, though there are savings to be made by avoiding state-of-the-art and brand-new equipment. These costs could include:
- The purchase of a premise and any remodelling required to make it more suitable.
- Registering the nursery and securing insurance.
- The purchase and installation of equipment, including a kitchen, child-friendly bathroom facilities and outdoor play equipment.
- Learning materials, including toys and electronics.
- Branded signage, website, and uniforms.
- Marketing and advertising (which will also be a running cost).
Your running costs could include the following:
- Mortgage or rent and utilities
- Wages
- Insurance
- Food
- Learning supplies
- Staff training
- Maintenance (and your insurer can help you work out how often you’ll need to carry out maintenance) and cleaning
Protecting your business
The welfare of the staff and children who attend your nursery will be top of your list of priorities, but you also need to consider the risks associated with running a childcare business. Make sure you discuss the following covers with your insurer to keep your finances protected:
- Employers’ Liability – a legal requirement in the UK if you employ staff. This will protect you if an employee claims they became sick or injured due to their employment.
- Public Liability – which will deal with any injuries or personal property damage sustained by a third party while on your premises. This could involve a child hurting themselves on your play equipment or a delivery driver getting his mobile phone splattered with paint by an enthusiastic child. This is one of the most important nursery requirements in the UK regarding your finances.
- Professional Indemnity – in case your advice harms one of your clients.
- Business Interruption – as a safeguard against your business unexpectedly closing for reasons beyond your control.
- Commercial Premises – a cover that insures the bricks and mortar of your premises against the likes of flood and fire damage. You should also consider adding sufficient contents cover to protect all your equipment.
What are the benefits of starting a nursery?
Though it comes with its fair share of paperwork and a need to be absolutely on top of the rules and regulations of childcare, setting up a nursery can be both a life-enhancing experience and an excellent business opportunity.
When you open a nursery, you have the potential to:
- Shape the next generation – the skills a child learns at nursery age from all future learning. Not only can you influence the likes of fine and gross motor skills, but you can also encourage good social skills.
- Run a business with a high level of demand, with the potential to maintain a steady profit over time
- Set your own hours
- Offer training and career progression for early years childcare professionals
Finally
If you enjoy working with children, opening your own nursery can be a financially and emotionally rewarding choice. Follow the steps above and you can look forward to running your own business with confidence and success.
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