Expert help
It pays to take professional advice and read widely before you start up a nursery.
Consultancies
* Busy Bees, as well as owning a chain of nurseries, can help develop facilities either in partnership or on behalf of large companies: The Rom Building, Easter Avenue, Lichfield, Staffs WS13 6RN, tel: 0870 380 6614.
* The Children's House consultancy can advise on all aspects of starting and running a nursery: Station Road, Stallingborough, North East Lincolnshire DN41 8AJ, tel: 01472 504891, consultancy@the childrenshouse.org.uk, www.the childrenshouse.org.uk.
* Childcare Partners has expertise in helping employers decide on childcare strategy, particularly in the area of partnership schemes with local communities: Buffer Bears, Head Office, The Hospitium, Valpy Street, Reading RG1 1AR, tel: 0118 950 3200.
* Mark Dudek is a specialist adviser on all aspects of the early years environment: 6 Ledbury Mews, London W11 2AF, tel: 07976 703760, www.
educationdesign.co.uk.
* Trio Childcare Connections can help with getting a nursery started, Ofsted problems, etc: Newburn Centre, Newburn Crescent, Swindon SN1 5ES, tel: 01793 514422.
* Noel Quinn is a training and management consultant company that can support the development of your nursery business: 83 Cubbington Road, Leamington Spa, Warwickshire CV32 7AQ, tel: 01926 420340, info@noel quinn.co.uk.
Childcare and professional organisations
* 4Children, formerly Kids' Club Network, Bellerive House, 3 Muirfield Crescent, London E14 9SZ, tel: 020 7512 2112, www. 4children.org.uk.
* Daycare Trust, 21 St George's Road, London SE1 6ES, tel: 020 7840 3350, www.daycaretrust.org.uk.
* National Day Nurseries Association, Oak House, Woodvale Road, Brighouse, West Yorkshire HD6 4AB, tel: 0870 774 4244, www. ndna.org.uk.
* The Pre-school Learning Alliance, 69 King's Cross Road, London WC1X 9LL, tel: 020 7833 0991, www.pre-school. org.uk.
* Scottish Independent Nurseries Association, Hyde Park Business Centre, 60 Mollins Burn Street, Glasgow G21 4SF, tel: 0141 557 3040, www.sinascotland.com.
Publications
* Nursery World, priced 1.30 a week, includes news, features and curriculum guidance (subscription hotline, tel: 0870 444 8628), www.nurseryworld.co.uk.
* Starting a Nursery - A practical guide for early years professionals by Martin Pace (Nursery World, now on offer, tel: 0870 444 8633).
* Starting a Day Nursery: The essential elements resource pack (National Day Nurseries Association, 25, tel: 0870 774 4244).
* Starting a Pre-school factsheet, included in the group membership pack (Pre-school Learning Alliance, tel: 020 7833 0991).
* Starting and Running a Nursery - the business of early years care by Helen Jameson and Madelaine Watson (Nelson Thornes, 19.75, tel: 01242 267268).
* Building for Young Children by Mark Dudek (10, tel: 07976 703760).
Market research
You will need to demonstrate that you have conducted market research if you are to gain funding to set up your nursery. Market research is to show that the area you have chosen has enough children to support your nursery, will enable you to charge a high enough fee and will enable you to fill your nursery quickly enough and stay full so you can make a profit. Research will also help define the service you are to offer.
* Look around the area for evidence of young families - primary schools, children's shops and so on.
* Your local Early Years Development and Childcare Partnership (EYDCP)/Children's Information Service (CIS) are a good source of information.
* Contact major employers to ask if their employees need childcare.
* Prepare a questionnaire and conduct a survey of what age of children people have, where they live and what childcare they use. This helps gauge demand and publicise your nursery.
* Research your competition to establish whether the nurseries are full and what services they offer.
Contacts
* CACI is a market research company: Kensington Village, Avonmore Road, London W14 8TS, tel: 020 7602 6000.
* Childcare Link can provide details of your local CIS, tel: 08000 96 02 96, www.childcarelink.gov.uk.
* Experian is a market research company: Garden Floor, Bain House, 16 Connaught Place, London W2 2EP, tel: 020 7664 1157.
Business plan
Your business plan should include:
* Executive summary - include key objectives, financial objectives, level of funding needed.
* Sector analysis - a brief explanation of the nursery marketplace.
* Market analysis - your market research.
* Operational plan - your business objectives and how you expect to achieve them, ethos, opening hours, age groups and so on.
* Management team - outline staff identified and recruitment plans.
* Implementation plan - what you will do during start-up, including securing premises, recruitment, marketing.
* Financial information - predictions about how your nursery will develop financially.
* Appendices - the back-up for your financial data, any relevant press cuttings, management CVs, market size data.
* Banks, or your EYDCP business support officer, can often provide business plan formats for reference.
Funding
Types of funding
There are two types of funding:
* Debt (or loan capital), which you borrow from a lender such as a high street bank, and
* Equity, which means selling a share of your business to a business partner, even though it has not yet begun trading.
Most businesses usually operate with a mix of debt and equity.
Sources of funding
Debt:
The easiest and quickest source is through family and friends. If you know someone with enough capital, do not be afraid to discuss your proposal.
They may expect a share in the business, in which case it will become equity funding.
A bank may be able to consider a loan if you already have some capital or assets of your own, or if you have taken on an equity partner.
Even if you have no capital, it is useful to see your bank manager for advice on loan schemes available to business start-ups, such as the Government Loan Guarantee Scheme.
Grants are another source of business funding, but the sources are very few. If you are aged under 30, the Prince's Youth Business Trust is a good place to start enquiring and your local Learning and Skills Council may also offer advice on how to source low-cost or free money.
Equity:
A new business is unlikely to attract venture capital, so the best source of equity finance is a 'business angel'. This may be someone with business experience and money to invest who is keen to get involved in a profitable business. They may want to work with the business on a part-time basis, bringing valuable skills with them.
Business angels listen out for potential investments through a network of contacts and, for a fee, you should be able to access that network through either the local Learning and Skills Council, Business Link, or through private agencies called financial intermediaries (fees range from around 500 upwards). You can access these organisations through your local authority, local chamber of commerce or your accountant.
Business angels who have worked in similar sectors to childcare, such as health care or hotels, may be the most easily persuaded to see the benefits of investing in a nursery, as profit margins are likely to be similar.
Pros and cons
Debt:
* The lender weighs up possible return against risk. You will be expected to put up some of the capital (for example by offering a charge on your home).
* Once you have entered into a loan agreement, you must meet repayments, irrespective of whether the nursery is making a profit.
* You retain ownership of the nursery and therefore the value of the business when you come to sell it, rather than sharing this with a partner.
You will also have a greater say in decision-making.
* Debt is quicker to implement as a lender's decision is based on financial criteria, not on building up a working relationship.
Equity:
* You will only be required to pay back your funder out of profits, giving your business greater security.
* Your partner is likely to get involved in the business, which may bring new skills to the setting. If you have a mix of equity and debt, your lender may feel more comfortable with your partner's skills on board.
* You will be surrendering some of the eventual profits of the nursery business.
* You will also be giving up some control of the running of the company and will need to work with your partner for the benefit of the business.
* Having equity funds from a partner can sometimes be a help in securing further finance from other partners or lenders.
Contacts
* Abbey Business provides commercial mortgages and loans, tel: 0800 328 0210, www.abbey.com/business.
* Armada Finance provides asset funding, tel: 01392 431171.
* BDO Stoy Hayward is a financial adviser for growing businesses, 8 Baker Street, London W1U 3LL, tel: 020 7486 5888, www.bdo. co.uk.
* GR Patrick & Co (Finance), is a nursery finance specialist, tel: 020 8336 0030.
* The Royal Bank of Scotland has a financial team specialising in assisting the nursery sector, tel: 0800 521607.
Buying a nursery
Whether you are buying land or a building, converting a building or erecting a modular construction, you must get planning consent from the local authority. Ofsted will not agree to registration of the nursery until provided with evidence that planning permission is in place or that it is not required.
Sales agents
Companies that specialise in the sale of nurseries and schools include:
* AH Lansley, 111 Oxford Road, Reading, Berkshire RG1 7UH, tel: 0118 959 0271.
* Christie and Co, 39 Victoria Street, London SW1H 0EU, tel: 020 7227 0700, www.christie.com.
* Redwoods Dowling Kerr, Dipford House, Queen's Square Business Park, Honley, Huddersfield HD9 6QZ, tel: 0870 750 4958, www.redwoodsdk.com.
* National School Transfer, Tilshead House, Tilshead, Salisbury, Wiltshire SP3 4RX, tel: 01980 621251, www.national schooltransfer.com.
* School Transfer Consultants, Haydon Cross, Dale Road, Southfleet, Kent DA13 9NX, tel: 01474 833150, www.school transfer.co.uk.
Independent valuers
The following independent valuers understand the childcare sector and are recognised by most institutions:
* Savills, 25 Finsbury Circus, London EC2M 7EE, tel: 020 7499 8644, www.savills.com.
* Matthews and Goodman, Dorland House, 14-16 Regent Street, London SW1Y 4PH, tel: 020 7747 8847, www.matthews-goodman.co.uk.
* Pinders, Pinders House, Milton Keynes, Bucks MK9 1DS, tel: 01908 350500, www.pinders.co.uk.
* Taylors, Court House, Mill Court, Featherstone Road, Wolverton Mill, Milton Keynes, Bucks MK12 5QS, tel: 01908 226611, www.tbsv.co.uk.
Pre-engineered building suppliers
* Adroit Modular Buildings, tel: 0800 115544, www.adroitmodular. com.
* Empyrean International designs and constructs timber-framed buildings, tel: 020 7350 2345, www.empyrean.com.
* Elliott Group, tel: 01543 404040, www.elliott-group.co.uk.
* Homelodge Buildings, tel: 01962 881480, www.homelodge.co.uk.
* Pasuda, tel: 01142 540188, www.pasuda.co.uk.
* Portakabin, tel: 01904 611655, www.portakabin.co.uk.
* Rollalong, tel: 01202 812659, www.rollalong.co.uk.
* SGB Rovacabin, tel: 01865 337200, www.sgb.co.uk.
* Servaccomm, tel: 01964 624444, www.servaccomm.co.uk.
* Speaks Building Systems, tel: 01422 353022.
* Terrapin, tel: 01908 270900, www.terrapin-ltd.co.uk.
* Tingdene Homes, tel: 01933 225157, www.tingdene.co.uk.
* Wernick Buildings, tel: 01792 321222, www.wernick.co.uk.
* Wraith Accommodation, tel: 01427 711238, www.wraith accommodation.co.uk.
Architects
Architects experienced in designing nurseries include:
* Birds Portchmouth Russum Architects, Unit 11, Union Wharf, 23 Wenlock Road, London N1 7SB, tel: 020 7253 8205, www. birdsportchmouthrussum.com.
* Cottrell & Vermeulen Architecture, 1b Iliffe Street, London SE17 3LJ, tel: 020 7708 2567, www.cv-arch.co.uk.
* Dominic Burns Associates (architects, planning supervisors and project managers), 544a Bearwood Road, Smethwick, Bearwood, West Midlands B66 4BT, tel: 0121 429 7711, www.db-assocs.co.uk.
* DSDHA, 8 Iliffe Yard, London SE17 3QA, tel: 020 7703 3555, www.dsdha.co.uk.
* Mark Dudek Associates, formerly Education Design, 6 Ledbury Mews, London W11 2AF, tel: 07960 703760, www. educationdesign.co.uk.
* Panter Hudspith Architects, 235 Southwark Bridge Road, London SE1 6NP, tel: 020 7407 2786, www.panterhudspith.com.
Builders
The Federation of Master Builders can recommend builders:
* Gordon Fisher House, 14-15 Great James Street, London WC1N 3DP, tel: 020 7242 7583, www.fmb.org.uk.
Legislation
Care Standards
There is one set of national care standards in England, the Care Standards Act 2000, which are enforced by the Early Years Directorate, run by Ofsted.
The Act makes requirements such as the amount of space per child, staff ratios and administration.
There are four aspects to the regulation of daycare for children under eight:
* Registration: The registration process involves checks on you, your premises, and any people who look after children with you or live or work on the premises.
* Inspection: After you are registered, an Ofsted childcare inspector will regularly check the quality of your daycare provision. The inspector will write a report and send a copy to you so that you can make it available to parents.
* Investigation: An Ofsted childcare inspector may carry out an investigation to check that you meet the national standards and other requirements.
* Enforcement: Ofsted can take action if you do not meet national standards and other requirements.
Before you are registered you will have to demonstrate to Ofsted that:
* Every person looking after children on the premises is suitable to look after children under the age of eight.
* Every person living or working on the premises is suitable to be in regular contact with children under the age of eight.
* The premises are suitable, having regard to their condition and the appropriateness of any equipment and to any other factor connected with the situation, construction or size of the premises.
* You comply with the National Standards, regulations and any conditions imposed by Ofsted.
You can obtain copies of the National Standards from DfES Publications, tel: 0845 6022260 or www.standards.dfes.gov.uk and Guidance to the National Standards from Ofsted, tel: 0700 2637833 or www.ofsted.gov.uk/ publications.
The Care Standards Act 2000 is available from the Stationery Office, tel: 0870 600 5522, www.hmso. gov.uk. For Scotland, contact the Care Commission, see below.
Contacts
* Care Commission, Compass House, 11 Riverside Drive, Dundee DD1 4NY, tel: 01382 207100, www.carecommission.com.
* Department for Education and Skills (DfES), Sanctuary Buildings, Great Smith Street, London SW1P 3BT, tel: 020 7925 5000, www.dfes.gov.uk.
* Management Advisory can provide advice for nurseries on policies and procedures: 5-8 Edward Centre, The Horsefair, Hinckley, Leicestershire LE10 0AN, tel: 01455 444222, www.managementadvisory.net.
* Ofsted, 90 Union Street, London SE1 0FS. Registration helpline, tel: 0845 601 4771 (calls are directed to local centres), www.ofsted.gov.uk.
Employers' responsibilities
Terms of employment
* Employment Act 2002.
* Employment Protection (Consolidation) Act 1978.
* Trade Union Reform & Employment Rights Act 1993.
* Working Time Regulations 1998.
Advertising/recruitment
* Sex Discrimination Act 1975.
* Race Relations Act 1976.
* Disability Discrimination Act 1995.
* Employment Equality Regulations 2003.
Pay
* Equal Pay Act 1970.
* National Minimum Wage 1999.
Further advice
* The Arbitration, Conciliation and Advisory Service produces various guides on employer responsibilities, tel: 0870 242 9090, www.acas.org.uk.
* www.businesslink.gov.uk, or phone its helpline on 0845 600 9006.
* The Chartered Institute of Personnel and Development (tel: 020 8263 3310) has a legal advice line for members, tel: 0870 556 1251, www.cipd.co.uk.
Premises
Regulations
* Unitary Development Plan.
* The Fire Precautions Act 1971.
* Health and Safety at Work Act 1974.
* Management of Health and Safety at Work Regulations 1992.
* Health and Safety (First Aid) Regulations 1981.
* The Reporting of Injuries, Death, Diseases and Dangerous Occurrences Regulations 1981.
* The Electricity at Work Act 1989.
* The Food Safety Act 1990.
Further advice
Take advice from your local planning authority, Ofsted officer, fire officer, environmental health officer and EYDCP.
Policies
To meet the National Standards these should include: Organisation
* An operational plan.
* Procedure for lost or uncollected children.
* Registration system for children and staff.
Care, learning and play
* Children's activities to develop emotional, physical, social and intellectual capabilities.
Safety
* Risk assessment.
* Record of visitors.
* Fire safety and emergency procedures.
* Fire safety records and certificates.
* Operational policy for nursery outings.
* Vehicle records, including a list of approved drivers and insurance.
Health
* Administration of medication to children.
* Prior parental consent to administer medicines and for emergency treatment.
* Accidents and first aid.
* Health and hygiene statement.
* Sick children policy.
Food and drink
* Diet - records for individual children's dietary needs.
Equal opportunities
* Equal opportunities and anti-discriminatory policy.
Special needs
* Written policy on children with special needs.
Behaviour
* Policy on behaviour management.
* Incident record.
Working in partnership with parents and carers
* Admissions policy.
* Complaints procedure.
* Activities provided for children.
* Contract with parents.
Child protection
* Child protection policy.
Insurance
* Country Mutual, tel: 01204 525279.
* Dot 2 Dot, Stanmore Insurance Brokers, tel: 0161 724 2900.
* Kiddicare/PoundGates, tel: 01473 216 406.
* Morton Michel, tel: 020 8768 6700.
* William Taylor Insurance, tel: 01708 855141.
Equipment Make a list of the essentials, using the reminders below, and set a budget using catalogues as a guide.
For more information see Nursery World's supplement Nursery Equipment (next issue February 2006).
Checklist
* Arts and crafts materials: paint, paper, glue, brushes, safety scissors, modelling materials, craft tables, easels, overalls, drying racks for paintings.
* Book corner: books, seating, display shelving/storage.
* Construction: traditional wooden bricks, plastic blocks, Popoids and gear systems.
* Display: pinboard, display shelves, fabric calendar.
* Games and puzzles: shape sorters, play trays, jigsaws, simple board games, memory games.
* ICT: consider a computer, digital camera or roamer.
* Music: tape recorders, rainstick, drum, maracas, xylophone.
* Outdoor play: climbing frames, slides and swings, pop-up tent/den-making equipment, ride-on or push-along toys, safe surfacing.
* Role play: home corner furniture, smaller props, such as a cash till, telephones, dressing-up clothes.
* Sand and water: raised sandpit, water table, buckets, spades, boats, jugs, funnels.
* Small world: dolls and accessories, teddies and soft toys, miniature people sets, animals, building, vehicles.
* Toys for babies and toddlers: fabric books, ring stacker, push-along toys, rattles and teething rings, playmats, mobiles.
Equipment suppliers
General
* Addguards, tel: 00353 128 00106.
* Asco, tel: 0113 270 7070.
* Early Learning Centre Direct, tel: 08705 352352.
* Eibe UK, tel: 01483 813834.
* Everything Early Years, tel: 0845 458 9910, www.everythingearlyyears.co.uk
* Galt, tel: 08702 424477.
* Hope, tel: 08702 414400.
* M&S Mercantile, tel: 0161 873 8181.
* NES Arnold, tel: 0870 600 0192.
* Orchard Toys, tel: 0115 937 3547.
* Philip and Tacey, tel: 01264 332171.
* Step by Step, tel: 0845 300 1089.
* TP Activity Toys, tel: 01299 827728.
* Wesco, tel: 0115 986 2126.
* The Whole Kaboodle, tel: 01773 828000.
Art and crafts
* Art2Go, tel: 01843 292333.
* Berol, tel: 01273 513233.
* The Consortium, tel: 01225 777333.
* Crayola, tel: 01234 360 201.
Children's books
* Letterbox Library specialises in positive-image multicultural books, tel: 020 7503 4801.
* Milet publishes dual-language books, tel: 020 7603 5477.
* National Literacy Trust provides information on early years reading, tel: 020 7828 2435.
Professional books
* David Fulton, tel: 020 8996 3610.
* Featherstone Education, tel: 01858 881213.
* Heinemann, tel: 01865 474000.
* Hodder, tel: 01235 400400.
* Nelson Thornes, tel: 01242 267100.
* Nursery World, tel: 0870 444 8633
* Open University Press, tel: 01628 502720.
* Paul Chapman, tel: 020 7324 8500.
* RoutledgeFalmer (Taylor & Francis), tel: 01264 343071.
Management software
* BabyTech, owned by Parenta, specialises in nursery management software, tel: 0870 444 1330.
* Coldharbour Systems provides financial administration systems, tel: 01275 850500.
* Connect Software, tel: 0870 850 2362, www.connectsoftware.net
* Datamove, tel: 0116 237 5017.
* LogicCall, tel: 020 8385 7474.
* Parenta designs nursery websites, tel: 0870 747 9066.
* Rio Computers specialises in nursery management systems, tel: 08703 501745.
Music
* Kindescope, tel: 01623 861157.
* Music Education Supplies, tel: 020 8770 3866.
* Out of the Ark Music, tel: 01932 232250.
* Playsongs Publications, tel: 01799 599054.
Play equipment/furniture
* Active Learning, tel: 0115 960 6111.
* Community Playthings, tel: 0800 387457.
* Cost Cutters, tel: 01543 495070.
* E-Niko, tel: 01768 210121.
* Hand Made Places, tel: 01420 474111.
* Little Tikes Commercial, tel: 01704 833123.
* Park Leisure, tel: 0115 937 2468.
* Sherwood Industries, tel: 01623 792151.
* Sovereign Playground Equipment, tel: 01702 291129.
* Timberkids, tel: 01288 353527.
* Timberline, tel: 01246 454484.
* Wicksteed Leisure, tel: 01536 517028.
Play surfaces
* Charles Lawrence Surfaces, tel: 01636 610777.
* Happy Landings, tel: 01280 822949.
* Smith Brothers, tel: 023 9238 7198.
Role play
* Charlie Crow Costumes, tel: 01782 417133.
* J and M Toys, tel: 01274 599314.
* Let's Pretend, tel: 08705 352352.
* Multirole, tel: 01422 886589.
* Three Bears Playthings, tel: 01669 620315.
Uniforms
* Grahame Gardner, tel: 0116 255 6326.
Staff
Preparing to recruit
Using your business plan, decide how many children you will be seeking to enrol in the first months after the nursery opens.
Next, consulting the Care Standards Act 2000, decide how many people you will need to employ initially and what their qualifications should be.
Draw up the job descriptions (duties and responsibilities to be undertaken) and person specifications (characteristics such as qualifications, experience and skills) and compose the advertisements.
Job ads can be placed in the sector's specialist publications, eg Nursery World, national and local press and local Jobcentre Plus offices.
Appointing a manager
Appoint your manager first. Under the Care Standards Act 2000 the minimum experience is two years in a daycare setting plus a Level 3 qualification appropriate to the post.
A manager needs proven managerial, communication and leadership skills.
Selecting your team
* Recruit downwards, involving senior staff to help you select the junior staff so you build a cohesive team.
* Pay attention to equal opportunities - treat candidates equally without regard to gender, race, national or ethnic origin or marital status. You must ensure no applicant is discriminated against because of physical disability, age, religion, sexual orientation, trade union, family or care commitments.
* Ask applicants the same questions so that when you compare candidates you can show that you treated everyone equally.
* Limit the interview panel to, at the most, three people to avoid intimidating applicants.
* Use the job description to determine the essential requirements. Some interviewers use a score sheet so that they can compare candidates'
answers.
* Invite candidates into the nursery to see how they interact with children and staff members.
Recruitment agencies include:
* Beresford Blake Thomas, tel: 0870 600 0892.
* Capita, tel: 0800 731 6873.
* CG Recruitment, tel: 01344 761901.
* Firstpoint Healthcare, tel: 08457 23 24 25.
* Marylebone, tel: 020 7727 2743.
* Pertemps Solutions,tel: 020 8690 9010.
* Protocol Teachers, tel: 020 7440 8445.
* TimePlan, tel: 0800 358 8040.
* Tinies Childcare, tel: 020 7384 4971.
Curriculum
* Learning and Teaching Scotland, 74 Victoria Crescent Road, Glasgow G12 9JN, tel: 08700 100 297, www.ltscotland.org.uk.
* Qualifications and Curriculum Authority, 83 Piccadilly, London, W1J 8QA, tel: 020 7509 5556, www.qca.org.uk.
* The Scottish Qualifications Authority, tel: 0141 242 2214, www.sqa.org.uk.
* Qualification Curriculum and Assessment Authority for Wales, tel: 029 2037 5400, www.accac.org.uk
Inclusion in this directory does not necessarily imply recommendation.
CASE STUDY BUSINESS PLANNING
Mother and qualified accountant Sian Millar opened her 30-place nursery, Dizzy Ducks Day Nursery, in the grounds of Buttsbury Infant School in Billericay, Essex, last November. The nursery is already full and she is embarking on opening a second In my area, I found that good-quality childcare and places for under-twos were in very short supply. I registered for a nursery place when I was 12 weeks' pregnant and at one year old, my daughter was still without a place.
So, I decided to quit accountancy and set up my own nursery.
We opened in November and are already full. Everything was built and bought with the child in mind and parents like our brand new purpose-built modular building. As a result of our child-focused approach to day care, we've built up a good reputation in a short space of time. At Dizzy Ducks, it's all about the children!
Although I'm a qualified accountant, I'd never done a business plan so I started by attending a Business Link course, aimed at people setting up in business and dealing with subjects such as business plans.
I'd advise people setting up a nursery to take whatever advice is available: there is so much around. Having a Business Link adviser to turn to really helped. HM Revenue and Customs was useful when it came to tax and national insurance and the high street banks offer dedicated support to business start-ups.
The National Day Nurseries Association offers information, and I found the Pre-School Learning Alliance publications on policies and procedures invaluable.
It's crucial that your business plan takes account of absolutely all set-up costs and overheads and remains flexible. It should not just be done once and then forgotten about. It needs to be constantly updated.
I made projections based on being half full, which meant I'd break even; three-quarters full, which would give me a good profit; and full, which would enable me to set up a second nursery within year one. Even now I update my spreadsheets each week to ensure that I am forecasting from the most accurate figures possible.
When setting up in business, you need to pay really close attention to your cash flow and profit and loss forecasting. That's where a lot of businesses go wrong. They fail to understand the difference between the two, and that while they might have a potentially profitable business idea, they may not have the cash in hand to meet all their costs in the early days. For example, if you pay your staff at the beginning of the month but your fees don't come in until the end of the month, then how are you going to pay your staff or suppliers in the interim period?
I'm now in the process of opening a second nursery. The value of my first nursery has risen so much since it opened that the bank is happy to lend me more on the back of that. Again, the nursery will be linked to a school site, but this time will have about 50 places. My business plan? Ready and waiting!
CASE STUDY PURPOSE-BUILT PREMISES
Husband-and-wife team Steve and Sarah Garside have just opened one of the first purpose-built nurseries to be located on a business park Our nursery, called The Learning Tree, is a 124-place nursery on Whitehills Business Park, near Blackpool. It caters for newborns up to five-year-olds, opened on 9 January this year and was funded in part through a bank loan and in part through remortgaging our house.
The planning department took a bit of persuading when it came to granting us planning permission, because they said we wouldn't create enough new jobs for the area, but support from the business park's developer persuaded them to reconsider.
It is our second nursery. The first is the 37-place Mary Poppins nursery in Cleveleys and is in a house designed by renowned architect Edwin Lutyens, so has lots of small odd-shaped rooms and isn't ideal for a modern nursery.
With the new nursery, we were, obviously, able to start from scratch. We looked at the everyone's roles, which areas they had to access, the quickest routes to get there, what was of least inconvenience to the children and planned around these requirements. We also consulted our local early years team, who made some very useful suggestions for the design. Our architect was chosen by the business park developers.
We have ended up with two baby rooms with a shared kitchen and nappy-changing area, and large open-plan areas, with temporary partitions, all with dedicated fan extractors to keep the atmosphere fresh and clean.
We are continuing to develop the outdoors and will eventually have hard and soft-play areas, a baby garden, planting area and sand pit.
While the building is great, the disadvantage of the site is that we're not in a very prominent position and have no immediate neighbours at the moment as the business park is still being developed. So, we're now marketing hard to attract more parents.
Advertising on local radio didn't pull in the customers that we expected - I think because the audience is split between a number of local and national stations. However, it did attract a lot of potential staff, so recruitment hasn't been a problem.
Now we're concentrating on direct marketing and approaching places such as GP surgeries, advertising in the newspaper and devising local employer discount schemes. We're still confident that we'll reach a break-even point within the first year.
CASE STUDY MODULAR BUILDING
Doncaster retailer Katherine Taylor was offered a piece of land and only then decided that it was the perfect location for a nursery, and that a modular building would make the ideal premises. Her 56-place setting, Roundhouse Nursery, opened in August 2004 and she is now planning to expand Michael Hird owns my shop buildings and the site of an old petrol station, which he offered to me. He said I could set up any business there provided it wasn't too noisy or detrimental to his nearby home.
I felt it would be the perfect location for a nursery as it is on one of the busiest main roads into Doncaster, about half a mile from the city centre, and comes with ready-made entrance and exit roads, making it really easy for parents to drop off their children. Michael would again be the landlord and I would own the nursery business.
We then approached the local authority and were able to secure some of the last funding under the Neighbourhood Nursery Scheme.
The tanks from the petrol station and cellars from the houses previously on the site would have made a new-build difficult but not impossible. However, we decided that a modular building was the best way forward, largely because they are so convenient - the manufacturer deals with everything right down to the carpets - and they can be built so quickly - it took just 12 weeks from placing the order to completion.
We decided to opt for Servaccomm, because they were so flexible and helpful. The nursery was on an unusual, triangular site. Michael had also hired Colin Howard, an independent architect, so we arrived with a long list of requirements. However, Servaccomm was happy to work with Colin and meet all our demands: a double-height atrium, block-effect exterior and floor-to-ceiling windows.
I think the building was about 30 per cent cheaper than a wet-build and it really doesn't feel like a modular building.
We are currently registered for 56 places and plan to expand the nursery to become a 90-place setting, simply by adding extra pods to create a whole new floor. Servaccomm have suggested doing the extension over a long weekend so that we won't have to shut for a single day!
CASE STUDY COMMUNITY SERVICES
Ros and David White opened 96-place Sparklers Nursery in Gretna last September to provide both the childcare and community services so lacking in their area Within three months of opening, our nursery was nominated for a 'best business in the community' award from the Scottish Enterprise Council and, although we didn't win, we were one of the three finalists.
The nursery is located in a former church hall and we havealso added a large custom-built extension to meet the community and local childcare needs.
We run an 'emotionally intelligent' nursery, which provides quality care in a 'home-from-home' environment. We appointed a very innovative manager, Jackie Bell, and all our staff are qualified. They are really motivated in helping to make the nursery into a welcoming childcare and community facility.
We're now building up a list of classes and services to offer the local community. Some we organise ourselves, others are provided by local agencies as we network with health visitors, Sure Start, local councillors, and Active Schools and Working For Families co-ordinators. Where a course has been run by an agency, they may also fund childcare places for the mothers who are attending, depending on the age of the children.
Several staff are fully qualified or are training to do baby massage, baby signing, and parenting classes. Additional activities on offer include aerobics, keep fit, and STEPS/motivational courses, supported by the Working For Families programme and CALMS (mental health ) team and aimed at getting mums back into work.
We also wanted to attract stay-at-home mums and their children to the nursery, so we run a mother and toddler group and music and exercise classes. It gives the mums a chance to relax and chat over a cup of tea.
We have various classes and groups in the pipeline and have a successful knitting group where mums, aunties and grannies come to teach the children how to knit. They're knitting blankets for the children in Pakistan.
This month we're starting a fitness programme, including football training, for older children, supported by the Leisure Trust and Gretna Football Club (GFC) - and a Lego club for some children who don't want to get involved in sport!
We'll have access to a 30-seater minibus in the summer holidays and we're investigating projects such as orienteering in conjunction with the Active Schools programme and GFC.
We have taken our time and built up strong partnerships in the community.
Being short-listed for the award has really raised our profile and numbers have more than trebled in the last four months.
CASE STUDY MEETING PARENT NEEDS
Despite the large number of private day nurseries already operating in Colchester, Essex, Stuart Thackrah, headmaster at independent school Holmwood House, is preparing to open another to meet parent demands I have been headmaster of Holmwood House School for the past 18 years and during that time parents have repeatedly called for the school to set up its own nursery.
They see enormous benefits in having their children at the same school: it would reduce their travelling time, avoid problems of their children's school holidays falling at different times, bring about greater continuity of care and ease the children's transition to school.
I was reluctant to set up a nursery on the school site because I didn't think there was enough space and wasn't convinced it was the best place to have very young children - Holmwood House already has 400 pupils aged four to 13.
Now I'm going to be able to provide the next best thing - a nursery only five minutes away. It will be housed in what was formerly Woodland Lodge Kindergarten, which opened as a very good nursery but was latterly allowed to go to rack and ruin and finally closed.
We've just started an extensive refurbishment of the Victorian bungalow and its acre of ground, and hope to open our nursery in September to coincide with the new academic year. There will be a maximum of 45 places for children aged from six months to four years. The nursery children will also be able to use some of the school facilities such as the swimming pool.
Although driven by the needs of the school's existing parents, the nursery will be open for 46 weeks of the year and will cater for all children, whether they intend to progress into the senior part of the school or not.
I have no experience of setting up nursery provision, so the school has enlisted Anita Huckle to project manage the nursery's transformation and opening, and oversee the running of it during its first few years. Anita was one of the original owners of Woodland Lodge Kindergarten, when it was highly successful, and continues to own other good nurseries in the area.
She will do everything from helping to plan the rooms to hiring staff and organising the Ofsted registration.
The nursery will also benefit Holmwood House as several staff have infant children and will find it easier to come back to work with a nursery just five minutes away.