Running a nursery, wow an ideal job for people that are passionate about the care and education of children. Although a childcare qualification is not always necessary to own a nursery, I would highly recommend that you have a childcare qualification, especially when you are employing qualified staff. I have heard many stories where the staff have had more qualifications that the Owner, which has led to an unhappy workforce. Basically, how can you lead if there is no clear understanding of the basic requirements? This is not always the case but it is something for you to consider.

You will need to meet health and safety regulations as well as managing general business administration, red-tape issues, and financial planning.  Nursery businesses generally do not result in high turnovers. An entrepreneur running a childcare business has to be enthusiastic, energetic and passionate about what he or she is doing. You must have a clear vision of how you want your nursery to be.

Market research is important for any business; it allows you to gauge what the competition is like and understand if there is a market for your nursery. It will also assist you in deciding what your start-up’s USP can be, who your main customer is and how you will target them. Finally, it will help you mould your company into a success.

Many entrepreneurs start out with one business in mind but end up pivoting or adjusting their original model because they’ve been influenced by a competitor or potential customers.

Begin by looking at your local council’s full list of registered childcare providers and focus on anything that will be competition for your company such as other nurseries, mother and toddler groups or self-employed childminders.

Another local government list to analyse is the census as this will assist you in measuring the number of nursery-age children and the general economics of your demographic. Having this sort of information can help you create a business plan and acquire finance, and further understand your market and what pricing model will be most suitable for your business.

Working with children comes with a considerable amount of red tape. Your business must be registered with the Office for Standards in Education (Ofsted), but before you can do this there are two preliminary steps – a DBS check (a scan to check your suitability and your history for any prior criminal convictions) and you must fill out a health declaration booklet, which requires you to list any health problems and medications you are taking.

To be successful in registration your business will need to demonstrate to Ofsted that you comply with the standards, including staff training and vetting; child group size, fire safety and premise regulations (if you decide to convert your home into a nursery this will require planning permission). You should also contact your local environmental health department to ensure your business complies with legal obligations under the Health and Safety at Work Act 1974 and the Food Safety Act.

The registration process takes time as officials have to check that your business meets requirements – allow for at least six months for it to be finalised as staff will be checked for their suitability to work with children too.

Another important element to running a childcare business is finding suitable premises. Government regulations set out how much space you will need per child so once you have worked out how many children your nursery will cater to. You can work out the minimum space required and the best way to acquire it – build, rent or buy.

It will be difficult and expensive to move premises so make sure to plan carefully.

Check that your premises will be able to accommodate sufficient children to cover your overheads. If you decide to renovate and make structural alterations to a building that already exists (like your home), you will need to factor in significant finance depending on its current state and size. You will also have to ensure that the premises are up to fire safety standards and that there is suitable security.

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.