The premises you acquire to run your nursery from, will have a huge impact on the actual business you are able to run.
The size of it will limit the number of children you are able to care for. While a larger premises can cater for more children, it will also incur greater running costs, such as staff costs, more equipment, heating, lighting and other operational costs, which also need to be considered.
Even if you decide to start off small, ensure there is always room for expansion in the future, if you decide to go down that route later.
Location, location, location is a major factor, so this needs to be given careful consideration.
The location of your nursery will determine greatly how many customers you are able to attract and how popular you are likely to be. Naturally, nurseries situated in urban areas will be more popular than rural ones, simply because they will be more convenient for working parents to get to. The transport links will be better and there will be more people in the surrounding area, working in the offices and shopping places, who could easily drop off and pick up their children, before or after work. However, urban settings often come with a greater price tag and possibly with less space and less facilities.
Rural settings in comparison may have more space, cheaper running costs and are able to provide a greater variety of facilities, however, because they are out of the way and often harder to reach. They may only appeal to a smaller number of parents, unless you’re offering something so good, that parents will come out of their way to you.
Once you have chosen a location, you need to know as much about it as possible to make your marketing really effective. This includes knowing about the facilities that are already available in the area, as well as finding out about the competition from other nurseries and childminders in your area too.
Don’t forget to check the demographics of the area as well, for example, how many adults and children are registered as living in the area? What are their ages? Are they working or retired etc. This information can be obtained from the local council.
In addition, it would also be a good idea to find out about potential customers from nearby businesses, offices or residents that may use your services. Such as how long do they work? How long are they likely to need childcare and so on.
While location is a key factor when setting up a nursery, the suitability of the building is also important.
Whether you decide to buy or rent a premises, the size of this will determine the number of children you are allowed to admit and impacts on the amount you will realistically be able to earn. It will also affect what you want to provide and what you can realistically provide, therefore some ideas may have to be compromised.
If you purchase a running nursery which is for sale, then much of the guess work and legal requirements will have been catered for.
If you rent a premises, you will need to consider the cost of the lease and whether or not you will be able to meet the monthly payments. These generally tend to be higher than a mortgage or a loan on a freehold property. Even if you are able to meet the payments for the first couple of years, you will need to ensure that the terms and conditions in your contract will remain favourable for you in the long run too. After all, moving location could be the last thing you want to do when you have just got your nursery just how you want it.
So make sure that the terms and conditions will not dramatically change, which could make your business non-viable.
While building a nursery from the ground up, may not be a desired option for everyone, because of the huge cost implications, converting a premises you have decided to rent or purchase can also come with its drawbacks. Firstly, there are the structural costs of altering an existing building to meet your needs, which could be expensive too, if you decide to convert a building. Then, you may need planning permission from the local council, especially if it is in a residential area. This is because residents may object to the noise of children during playtimes and the increased traffic. The local authority may then need to check if there is ample parking available in the area, for parents to pick up and drop off their children, before granting permission.
Therefore, you need to be aware permission may not always be granted, which again carries cost implications.
Health and safety issues will need to be addressed and the premises adequately insured, as well as inspected by Ofsted – the Office of Standards in Education, Children’s Services and Skills.
The premises must be made safe and secure with appropriately sized furniture and equipment, all in good condition and meeting safety standards. This means it should come with a kitemark and be disinfected before use.
For every 10 children over the age of 2, you must provide at least one toilet and hand basin with hot and cold water.
If you plan to provide food, you will also need to seek advice from the local environmental health department, to ensure Health and Safety regulations are followed and you are legally compliant with food standards.
You will also have to meet the requirements of the fire authority who will need to inspect your premises too. Fire alarms will need to be fitted to support the evacuation of children and staff in an emergency.
Other things you may need to consider include:
Additional locks on doors and windows to protect the children and property and/or CCTV.
Alternatively, you may decide to take over an existing nursery, which has undergone all the checks necessary. While it maybe expensive to purchase a running nursery business, the benefits include, all the guess work has been done for you. You can also start making money from day one, as it is a running concern and will have children already attending.
A small running nursery with around 30 children, can cost in the region of £70,000 upwards.
Making structural changes to a building and turning it into a nursery may not appear to cost as much initially, but you need to factor in the time it will take to set up, which means you will have to wait to make money. You will also need to advertise and require additional time to become established. In addition, you will also have to buy all the equipment and toys from scratch. For a new nursery starting from scratch this could easily be in the region of £10,000 – £12,000. This could be used to pay for an outdoor play area, with Wendy house, sand pit and artificial grassed area with tricycles, to indoor water trays, dolls, soft toys, books and other toys for all ages, bedding and so on.
All in all, buying a running business can often appear expensive on the surface, but as everything is open and upfront, there are not as many unexpected surprises or hidden costs to deal with, and you also have the additional benefit of making money as soon as the contracts are exchanged.
In either case you will also need to set aside a budget for replacements, as children have a habit of breaking things regularly.
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