The Finances Behind Owning and Running A Nursery

The UK’s nursery sector is booming, and if you love children and wish to turn your passion into a business you may well consider this sector as a viable option. Government funding also exists to encourage entrepreneurs to set up new nurseries to meet an ever-increasing need.

Starting a nursery

A nursery is the same as any other business, in that you should always draw up a business plan, make sure that you have sufficient finances in place to start the business, and also read up on all the current regulations regarding safeguarding, risk assessments and government registration requirements.

Nursery resources are vital. If prospective clients visit your nursery and see a well-equipped environment, complete with happy and engaged children, then they’ll be more likely to send their children to your school. It’s worthwhile spending as much as you can during the process of setting up your nursery.

Staff costs
As well as paying your staff a salary commensurate with their experience and qualifications, you’ll also have to pay for a DBS check before you employ them. These checks can vary and it’s a good idea to carry out some research and take a look at the DBS website.

Childcare business grants
If you are starting a new nursery business you’ll be entitled to some government help. According to the Childcare Business Grants website, your business could be entitled to £500, and if you will be caring for disabled children in your nursery, you will be eligible to grants of £1,000. In order to qualify for one of these grants, you must hold an Ofsted or Childminding Agency (CMA) certificate and your business must be under 12 months old. This funding can be used to ‘pay for costs incurred in helping set up the day nursery business, such as looking for suitable premises.’ The grant can also be used for public liability insurance costs.

It’s a costly business
Despite the childcare business grants and the expected influx of parents needing nursery facilities as a result of the government’s new tax-free childcare scheme, some nurseries are still finding it difficult to cope with the mounting costs of running their business. A recent article in the Guardian, which featured a nursery that caters for 235 children in Leicestershire, shows that the highest costs are staff salary bills. The government recommends a ratio of ‘1:3 for kids under two, 1:4 for those between two and three years and 1:8 for those over three.’

Compliance is also costly
Anyone who wishes to run a nursery will also have to comply with the Early Years Foundation Stage (EYFS) regulations. Training that used to be provided by local authorities has to be found elsewhere at a cost, and the same applies for first aid training. Despite the government commitment to extend free childcare, many nurseries that are currently struggling financially will find it very expensive to keep up with new legislative demands without employing extra staff.

If you are thinking that you’d like to run a nursery, it’s vital that you carry out some research and go and talk to current nursery providers about some of the financial difficulties you might face.

Naomi Webb is an enthusiastic and experienced writer specialising in UK educational content. She is currently training to become a primary school teacher, but in the meantime she is writing insightful and varied content for both parents & teachers! 

For more information about a career in teaching click here.