In addition to premises costs, you will have to invest in equipment before you open, which will range from toys and books to first aid supplies. There will also be significant ongoing costs, such as staff, energy bills, food and cleaning supplies, as well as fixing and replacing broken equipment. Be prepared to set aside approximately 75% of your fees for running costs.
Monitoring how much money is coming in and going out of your business is crucial, and you’ll need to be firm with customers about your payment policies to ensure you can keep on top of your cashflow. This can get tricky if parents are also your friends. At the end of the day, your priority is to keep your business afloat.
It’s advised that nursery entrepreneurs get their fees paid up front, and make sure that parents are paying all year round. Doing this will avoid cashflow gaps that can occur during certain times of the year.
Reserve the right to expel children or refuse entry; if a child in your nursery is bullying other children then he/she will be detrimental to both the other children’s development and your business.
Finally, be prepared for a slow start – make sure that you can get through the first couple of months without your nursery being full as it can take time to build momentum and, with considerable upfront costs, it may be worth considering raising finance to get your new business off the ground.