You may know all the words to ‘The Wheels on the Bus’ and can identify all the Disney princesses in a line-up, but that doesn’t fully equip you to start-up a nursery. Whilst childcare’s centred around nurturing children, it’s also a business. And in order to succeed, you need to think strategically and have an effective business plan.
According to the National Day Nurseries Association, 83% of nurseries expect to make a loss or just break even, and 38% expect to operate at a loss. With increasing numbers of nurseries closing down (a 50% increase in closures year on year, 2022-23), it’s important to make sure your business plan is viable.
As a nursery business owner, you need to deal with the relentless demands of young children, as well as those of their parents, your staff and your business. It’s quite the juggle.
With a trusty business plan at your side, you’ll have better direction and focus. You’ll have an action plan to follow, a financial plan to track and ways to navigate the challenges that you may face. Get those elements right, and you’ll be welcoming little people to your early years setting in no time.
This guide will arm you with the tools to write a robust nursery business plan.
How a Nursery Business Plan Helps
A business plan is a guide that tells you and others what you want to do with your nursery, how you’ll do it, and what you expect to happen. It outlines your mission, vision and values. It prepares you for what’s to come. You’ll be able to:
- Keep finances on track
- Attract new customers
- Comply with legalities and regulations
- Hire the right staff and assess performance
- Stay true to your values.
8 Steps to Writing a Robust Nursery Business Plan
Sell your dream, making sure it’s underpinned by carefully considered plans and procedures. If you’re looking for investment, this document needs to make potential investors sit up, take notice and feel assured that you’re serious. Channel your inner entrepreneur and get writing.
1. Executive Summary
This is your introduction; your concise elevator pitch. Give a snapshot of your entire proposition in a concise and compelling manner. Summarise top line details of your business including the name, your objectives and goals. Leave the precise ins and outs until later.
2. Company Overview
Sell yourself and your vision for your day care business. Why do you want your own nursery business and what do you hope to achieve? Show your qualifications, motivations, values and experience. Provide details left out of the executive summary, including ownership structure, staffing plan and your general offering.
3. Your Services
Spell out what your childcare business will offer and what makes yours different from others in the nursery industry. There’ll be specific details including:
opening hours: do you offer full time and part time provision, school hours, any flexibility?
age limits: are you catering for 3 and 4 year olds or from birth, for example?
ratios: what’s your child to staff ratio?
high quality care: shout out key members of staff, particularly if they offer specialist provision like SEND or multi-lingual skills.
USPs: highlight benefits of your nursery such as outdoor space and play equipment, a forest school ethos, parking facilities for parents, additional activities like external trips to the park, language teaching or Montessori methods.
There may be services that you’d like to offer in future, but not from day one. Do include those ideas in your plan.
4. Market Research
Do your detective work to understand where best to promote your childcare service, your target market, who you’re competing against, and how you fit in to the local nursery industry landscape.
Target market: obviously you’re talking to local parents and carers, but their needs vary greatly. Look at the local demographics to see if there’s a gap in provision that you can fill. Focus your efforts where you’ll make the biggest impact.
Understand your potential customers: where will you reach them? Look into local social media groups, local community groups, locations where they hang out, schools and healthcare providers that you can link with and so on.
Competitive analysis: how many other childcare providers are there near you (schools, child minders, pre-schools and nurseries)? What do they offer and how popular are they? Look at their fees to gauge your prices.
5. Financial Plan
It’s time to talk money. Make financial predictions about income generation, expenses and profits. For starters, you should include a profit and loss forecast, a cashflow forecast for the first three years, a detailed start-up budget and funding needs.
You’ll have start-up costs like furniture, books, craft materials, computers/ tablets/ TV, indoor and outdoor play equipment. Then there are ongoing running costs for your premises (utilities, rent, insurance, mortgage etc) and your team (staff training and wages).
You’ll need to maintain your profit and loss accounts, balance sheets, break-even analysis, cash flow forecasts and business ratios.
Remember, this financial plan isn’t set in stone. It’ll evolve over time.
6. Location and Premises
Your choice of location and premises is really important. Your market research should inform your decision. It’ll make some parents choose you over another childcare provider, and it’ll deter others.
The number of children in your care will impact the size of property that you need. There are government regulations on the minimum square footage per child. Refer to your business plan and projections before choosing your nursery location. Also consider:
- accessibility
- parking for parents/ carers
- proximity to a bus stop or train station
- facilities including kitchen, bathroom and outdoor space security
7. Rules and Regulations
There’s a lot of paperwork associated with starting up an EYFS facility. It’s important to comply with the necessary legalities before you open your doors and ongoing. Key processes include:
Registration – register your nursery with the relevant regulatory body (ie Ofsted in England, the Care Inspectorate in Scotland, CSSIW in Wales, HSSB in Northern Ireland).
Health declaration – declare any health conditions and medications.
Safeguarding – conduct DBS checks for all staff (to identify potential criminal convictions) and comply with local authority child protection policies. You’ll need specific safeguarding policies and procedures in place too.
Risk assessment – some of the Ofsted standards are to ensure health and safety policies and checks including fire safety, child welfare, staff vetting process and quality of care.
Record keeping – keep documentation for each child and comply with data protection rules.
Insurance – you’ll need a range of insurance policies including professional indemnity insurance, employers and public liability insurance, property insurance and personal accident cover.
Policies and procedures – ensure best practice when it comes to polices and procedures regarding discrimination, equal opportunities, confidentiality, sensitive data handling, recruitment and more.
8. Sales and Marketing Plan
How will you get pre-schoolers through your doors? You need a well-considered marketing strategy and action plan. This is where your market research proves invaluable.
Knowing where your potential customers spend time enables you to put resources in the right areas. It could be social media campaigns and ads, an SEO-rich website, traditional promotional materials like strategically placed banners, flyers and posters and in-person events. Let people get a taste of what you offer by hosting open days. Impress early visitors and they’ll spread the word.
Ready to Write Your Nursery Business Plan?
You’ve got this 8 step nursery business plan template to follow. Now it’s time to put it into action.
There are probably some parts you can do in your sleep, and others that feel tricky. That’s perfectly understandable. I can help you with that. As a business coach, I’ve helped hundreds of entrepreneurs and business owners to create winning business plans and put them into practice.
Get in touch if you’d like me to help you with your business plan.
