Starting a nursery business - top tips

Opening a nursery may be a life-long ambition, a new interest or the next step in your childcare career. 

But even if you have worked in childcare before, it can be a daunting experience with many areas to consider, so you need to make sure you are fully prepared for what it will involve.

Whatever the stage of development of your nursery, there are four fundamental criteria for success:

  • A sound business plan
  • Careful planning
  • Market research
  • A high-quality, dedicated manager leading a team of staff who share the nursery vision.

Without all of these ingredients, you will struggle to provide the quality of provision that will guarantee success.

Researching your market

Before you begin your journey to opening a day nursery it is important that you research your market. This will enable you to have a thorough understanding and knowledge of the market place. Areas which your research should cover include:

  • Customers e.g. parents/carers looking for a nursery
  • Competitors e.g. other day nurseries, childcare settings or childminders in the area
  • Operations
  • Local market conditions.

Finance - costing the project

There are two main types of costs for setting up a day nursery. Your nursery start-up costs and running costs.

Start-up costs refer to the initial cost of setting up the nursery business:

  • Purchase and lease of the nursery premises
  • Building costs
  • Nursery resources and equipment
  • Recruitment costs for hiring your childcare staff
  • Marketing costs.

Running costs refers to the everyday cost of running the nursery business,

  • Staffing
  • Gas, electricity
  • Insurance
  • Disposable resources
  • Food.

Once you have completed your business plan, you are in a position to raise finance for your nursery business. 

  • How much can you invest in the nursery business from your own finances?
  • Could you look at bank loans or business start-up loans?

Contact the early years department at your local authority as they will be able to advise on childcare in your area and may be able to advise of funding and support that is available.

Regulations

To provide childcare in England you need to register with Ofsted and comply with the Early Years Foundation Stage (EYFS) which sets the safeguarding and welfare standards for care, learning and development for children aged 0–5. Download the EYFS here.

In Scotland, nurseries need to register with the Care Inspectorate who is responsible for childcare in Scotland and you need to comply with the National Care Standards, which cover early years education and childcare up to the age of 16.

In Wales, the regulatory body responsible for nurseries is the Care Inspectorate Wales. Nurseries are required to comply with the 24 standards as detailed in the National Minimum Standards for Full Day Care.

Review your practice

Once you are up and running with help from our Starting a Nursery factsheet below and Starting a nursery membership, you can review your practice to see how things are going.

Reflect, review and improve your practice to the highest quality standards with Quality Counts.  

NDNA's Quality Counts award scheme gives you a clear framework and the skills to embed quality and self evaluation throughout your new early years setting.

Nursery room with wellington boots

Top tip: Support for opening your nursery

NDNA can support you in opening your nursery with our Starting a Nursery membership.

Find out more

Nursery room with children dancing

Top tip: FREE online business toolkit

 The Early Years Business Zone is FREE online business toolkit to support you in opening your new nursery, from business plan templates to a staff cost calculator and more!

Get started

Starting as nursery factsheet icon

For more information on health and safety regulations and employing nursery staff, download our FREE Starting a Nursery Factsheet here.