The resources you will require for a new nursery are: premises, money, staff and equipment. Consider the choice of a purpose-built nursery or a conversion. Establish where your finance is likely to come from and whether you will own or rent your nursery premises. If you already have childcare skills, consider what other complementary skills you are going to need to make up your team.
Location, location, location
The location of your premises in relation to its customers or marketplace will be a key factor in determining the success of your business. Check with local estate agents to establish that enough families live in the area. Perhaps both parents need to work to pay the mortgage because house values are high. There may be new homes in the area, which means that there will be little or no extended family to look after the children. Local businesses may be in need of a childcare facility, especially if they employ large numbers of women.
Location is, in turn, likely to influence your choice of premises. If the area is densely populated it may be difficult to find land, so a conversion may be the only solution. Look first for properties such as schools or churches as these will not require a change of use with the local planning authority. Whether you buy a property freehold or take a lease may be determined by your funding so discuss this in advance with potential funders.
Once you have a suitable location you will need to conduct market research. Your investigations should tell you that there is sufficient demand for a nursery in the area, what sort of service will be appropriate for your potential customers and what fees competitor nurseries are charging. This information forms the basis of your business plan.
In order to secure funding you will need a well-researched business plan and a team with the right skills. Childcare experience will be part of the mix but any investor will want to see tight controls in place for managing income and expenditure; so if financial management is not your strong point you will need to recruit.
The business plan will show that you have considered all the set-up costs of your premises, including your initial equipment purchase and any trading losses while the nursery is filling up. Talking to investors can be tricky if you are new to the game so get advice and support from an accountant or a solicitor.
The critical path
When you know your premises will be ready in a few months, your business will follow a critical path to opening. The key elements to control are: premises and regulations; staffing and marketing.
To register your nursery premises, discuss your designs in advance with the local office of the new Early Years Directorate, which you can contact through the Early Years Development and Childcare Partnership at your local authority (see 'Stamp of approval' on page 20 for information on how the Directorate will work). Co-ordinate inspections from the fire officer (for the fire certificate) and the building regulations inspector (if you have refurbished or built from scratch). Order equipment well in advance in case of delivery delays and organise your buildings and public liability insurance.
Recruiting qualified staff is proving to be a challenge to most operators, so make sure that you begin the process at least two months prior to opening. Police clearance itself can take several weeks in some areas. You will want personnel systems, such as payroll and staff contracts, in place and you might wish to provide job descriptions, uniforms, a staff handbook, training plans, and so on.
Marketing to fill your nursery places is essential to minimise early trading losses. Ensure that you have a booking system in place as well as information to send to prospective customers. The simple methods of advertising and PR in the local press, putting up signs and distributing leaflets are the most effective. And try to have an open day before your real opening to give parents a sample of what the nursery will offer.
Martin Pace, a childcare management consultant and managing director of Dolphin Nurseries, is author of Starting A Nursery published by Nursery World at Pounds 8.99.