How to Start a Daycare Business

If you have a lot of patience and a passion for working with children, starting a daycare could be the business for you. There are many things to consider, but working with children can be enormously rewarding, and many people make a successful business out of running nurseries. Millions of working parents rely on daycare. In 2018, 75% of families in England had used some form of pre-school childcare during their children’s lives, so this is a business that is very much in demand.

It is important to know that daycare does not just provide childcare. As a pre-school establishment, your nursery resources will be expected to provide a structured environment with an aim to achieve education through play.

Wondering how to start a daycare business? Find out what skills and qualifications you need, the important considerations to keep in mind and how to legally establish your business.

What Is a Daycare Business?

Typically, daycare businesses provide childcare on business days and during hours when parents are likely to be at work. Most daycare businesses accept children who have yet to reach school age. They often accept children from infancy up to about six years old. However, some daycare businesses also provide daycare services for school-age children before or after school hours and during school holidays. Some even offer extended hours to accommodate parents who work non-traditional schedules.

What Qualifications Do You Need to Open a Daycare Business?

So what qualifications do you need to open a daycare business?

The qualifications you need will vary depending on your involvement in the day-to-day operation of the business. You don’t need any formal qualifications if you are solely just running the business side of things, without actively providing childcare. However, you will need to have fully qualified staff.

If you are the daycare manager, you need the appropriate NVQ level 3 and at least two years of daycare experience. The Office for Standards in Education (Ofsted) now inspect all child care provisions in the UK. Childminders also have to register with Ofsted and the Early Years Education and like all businesses need to register with HMRC .

For you to effectively run your business you will need to be passionate and driven. You will also need to be self-motivated, especially if you are the sole owner of your business, and you should be able to motivate your team too. Being business-minded and having relevant experience and knowledge will help you, but it’s not essential, as setting up a business and growing it will help teach you all the skills you need, and you will effectively be learning on the job.

What Career Paths Are Available?

If you aren't sure about committing to a full-time daycare business, there are other ways that you could be involved in childcare. For instance, setting up a creche could be a more flexible way for you to benefit from the advantages of running a nursery with added flexibility. A creche typically operates on non-domestic premises. By setting up a creche you're typically catering for parents who need their children to be looked after longer than school hours, so this could be a breakfast club or after school club, for instance.

You could even set up as a self-employed childminder at home. Not all require you to be fully trained or to work full-time. But anyone caring for children under the age of eight will need to be registered with the local authority.

Starting a nursery is certainly not a ‘get-rich-quick' plan. In fact, you could probably make more money driving a taxi than running a nursery. But, if you want a job – and a business – that offers hourly challenges and a lot of rewards, then setting up a nursery could be just right for you.

How to Start a Daycare Business

Market research is a good place to start. Consider the area in which you intend to set up your nursery and then look at the competition. What services do they offer? What are their fees? Is there enough demand in the local area for another day nursery? This is especially important since some areas are overly saturated, and it is essential to establish a sustainable demand before progressing any further with your business.

You will also need to think carefully about the level of services you intend to offer and then write up a detailed business plan. Essential aspects to include in your business plan include:

• Find a premise — another vital element to running a childcare business is finding suitable premises. Government regulations set out how much space you will need per child, so once you have worked out how many children your nursery will cater to, you can work out the minimum space required and the best way to acquire it – build, rent or buy. It will be difficult and expensive to move premises, so make sure to plan carefully.
• Work out your cash flow - in addition to premises costs, you will have to invest in equipment before you open, which will range from toys and books to first aid supplies. There will also be significant ongoing costs, such as staff salaries, energy bills, food and cleaning supplies – as well as fixing and replacing broken equipment – so be prepared to set aside approximately 75% of your fees for running costs.
• Understand the regulations - working with children comes with a considerable amount of red tape. As already mentioned your business must be registered with Ofsted. Before you can do this, there are two preliminary steps – a DBS check (a scan to check your suitability and history for any prior criminal convictions). You must also fill out a health declaration booklet, which requires you to list any health problems and medications you are taking.

Other aspects to consider for your business plan are your legal structure, setting prices for services, designing your recruitment strategy for hiring employees and creating a marketing plan that includes how to build your online presence.

Ready to Form Your Daycare Company?

If you are ready to start a daycare business, it’s time to form your company. You can form a limited company or go the sole-trader route. Deciding and completing your company formation can be the most challenging part of starting a business, but it’s crucial to your success.

Are you ready to start a daycare business? At Mint Formations , we help you form your limited company or self-employed business and take away all the stress that comes with starting a business. We’ll secure your brand name and get your company registered fast so that you can start doing what you love.

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