When Sue Kowalski found it difficult to raise the finance to start her own nursery she and her husband opted to fund it themselves by opening the setting from home.
'We bought the house in April 1991 as our family home and Sunbeams opened its doors on 9 September that year. This was before the explosion in nursery care and nobody could see it as a viable, long-term proposition.
'My husband was then in a position to take voluntary redundancy so we used the redundancy money for the conversion. The property is a Victorian end-of-terrace house and we converted the upper floor into a family flat.'
The couple had investigated the planning policies in Plymouth. 'We knew the council were strict about allowing conversion in a residential area and we would have to buy in a commercial/semi-commercial area.'
It may sound simple but Ms Kowalski says it took a lot of hard work and anybody tempted to follow suit should do their research thoroughly and never underestimate the pressures living above the premises puts on family life.
'My husband and I couldn't have a decent row as the staff or clients would have heard,' she says with a laugh.
For young children, living above a nursery might sound like paradise, but the reality can be different says Vanessa Kellow who, with her husband Rob, opened the first setting in their Southampton-based Playaway chain from their home.
'When my daughter had friends round, they had to play upstairs rather than in the lovely garden. We decided she could not really use the nursery garden when the nursery children were there. The only time we physically shut the nursery was for a week over Christmas, so we didn't have a holiday for six or seven years.
'We eventually moved for our sanity, for our family and for the space. We later moved back into the original house. We gutted it, changed the planning permission back to residential use and turned it back into a proper family home.'
People thinking of buying a domestic property to convert into a nursery should first find out about planning permission, says Claire Chapman, who is opening Gambrelle Daycare Centre at her home in Wickham Market, Suffolk next month.
She created the centre by converting and extending her double garage. The project, which took a year, also involved extending her bungalow and Ms Chapman says this made it more complex. For example, the stairs to the new upstairs bedroom were deemed to come under commercial regulations which are more stringent than those for stairs in a residential property.
She stresses the importance of not just complying with building and fire regulations, but of keeping up to date with changes in the rules. Her original idea of glazing most of the back wall of the nursery to make it light and airy fell foul of a new rule limiting the use of glass under controls to prevent global warming.
Safety has to be paramount in any design. A suspended floor was installed across the extended garage because the original concrete surface would be too hard, and she put in a separate kitchen for the children to avoid any risk of cross-contamination or infection from her domestic kitchen.
Dos and don'ts
Mortgage: You must tell your mortgage lender if you plan to convert your domestic property for commercial use, says Sue Anderson, spokeswoman of the Council of Mortgage Lenders. Commercial mortgages differ from those on residential properties and, she says, you should also talk to your insurers.
Planning permission: Ofsted will not grant registration until it has evidence that you have planning permission. Talk to your local planning department first to find out what their policies are and their attitude towards commercial activities in residential areas. Talk to your neighbours. You are more likely to get permission if you have their support.
Building regulations: Ofsted will also require evidence that your local council building control department is satisfied that any building work has been completed to a satisfactory standard.
Health and safety: Take advice from your local environmental heath department, particularly if you plan to use your own domestic kitchen for the children. They will explain what you must do to meet your legal obligations under the Health and Safety at Work Act 1974 and the Food Safety Act 1990.
Fire safety: Contact your local fire authority for advice.
For and against
FOR: 16 years ago, when Mary Adams first saw The Chase Nursery, Holland-on-Sea in Essex, it was the answer to her prayers.
She was recently divorced, working nights and looking for the opportunity to run her own childcare business, and for a home for herself and her profoundly deaf son, then aged 12.
Ms Adams saw the potential in The Chase Nursery and has not looked back.
The nursery is on the ground floor and she has a flat upstairs.
'The kitchen is downstairs and we use it at snack time for the children and for any cooking activities. I use it in the evenings to make my meal.
'I have the building insured through the bank for both the flat and the nursery so there can be no dispute about claiming if, for example, there was a leak. But a lot of insurers don't want to take on something that is a mix of private and commercial.
'I pay the full council tax. I pay for the flat the same as someone with a three-bedroom detached house and, of course, I pay the business rates for the nursery. I don't qualify for commercial discount on the electricity and gas because of the element of domestic use.
'I only open 44 weeks a year. If I have any maintenance jobs to do I have them done when the nursery is closed. You cannot have strangers in with the children.
'One real advantage is not having to travel to work. I get up, go downstairs and I am at work. In the evenings, I can get on with my paperwork, or if people ring me, it is all here.
'My son was a weekly boarder. If he was home unwell, I was here on the premises. He knew he wasn't allowed downstairs during the week and he accepted it.
'I wouldn't change a thing. I have been very lucky.'
AGAINST: Sheila Anderson loves her Lanark Road nursery in Edinburgh, but she and her husband Douglas are not so keen on living above it.
'I don't really like it,' she says. 'I feel I have no time that is mine.
When you travel to work there is that bit of time between home and work when you are on your own and it is yours.
'On Sundays, instead of relaxing and enjoying being at home, I feel I want to get out because I feel I am here seven days a week.
'The parents can be quite persistent with the staff about seeing me when they know I am upstairs.
'We are set back from the road with a big driveway. When the parents arrive in the morning to drop their children off, they pull up under my bedroom window. They don't turn their engines off, they bang the car doors and shout greetings to each other. It might be my day off, but my chances of a lie-in are nil once the parents start arriving at 7.58am.
'My husband doesn't like it at all. He comes home at 4.30pm, but we can't have our evening meal until after 6pm because I can be called away.
'In the summer we don't feel we can sit out before 6pm. Last summer, we were sitting outside when one of the fathers drove up to drop off a letter.
He came round and started chatting.
'On a day off I would just like to get up, pull on my jogging bottoms, get on with housework and then jump in the shower. But I have to dress up as I never know if someone will call me.'