If you are considering starting your own nursery, it is important that you know how to write a nursery business plan.
Providing the right setting for children that is safe, happy, and supportive is essential for encouraging learning and development.
Therefore, your nursery business plan should be centred around this, and take into account the wellbeing of children in every section.
Ultimately, your nursery is a business and must earn a profit in order to continue to run smoothly, so your financial plan must be factored in.
In this blog post we will outline the purpose of a nursery business plan and how to write each section from your company overview to important regulations.
If you are feeling overwhelmed by the task of starting your plan, we have included a free business plan template in this post, to help guide you through each step.
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What Is the Purpose of a Nursery Business Plan
The purpose of this plan is to outline exactly how you are going to establish your nursery business, from marketing, to budget, to all of the legal requirements.
It must be well written and realistic, as this will help you focus your attention on the priorities of your business, and stay on track with your budget.
Your plan should hold all of the essential information about the business you are aiming to start up, and this should include sections such as:
- A company overview
- Services on offer
- Market research
- Team of staff
- Location and premises
- Financial plan
- Regulations and Legalities
We have included each of these sections in more detail below to ensure you have everything covered.
How to Write Your Nursery Business Plan
Within your nursery business plan, you will need to include everything there is to know about your nursery, as when caring for children, legalities, finances, qualifications, and health and safety must be in order.
This post will take you through each area step-by-step, in order to provide a solid foundation for your start-up.
At the beginning of your plan, giving a company overview can be beneficial to outline exactly what you want to achieve.
This is your opportunity to tell your story about why you are starting a nursery, including your motivations, experience, and qualifications.
It is important to provide a vision statement that highlights what success will look like for your business based on the SMART guidelines, which shows that your goals are:
In this section of your business plan, you should be clear about who will own and operate the business, how many staff members are on board, and the exact services you plan to offer.
Once you have explained the overarching goals of your business, it is the time to think about the specifics of what your nursery will offer to families.
This section should consider opening and closing times, as this is an important piece of information that could have an impact on how many places are filled.
You need to show that you are flexible as every family works to a different schedule. Therefore having strict opening hours of 10-3 for example, may limit the amount of parents who can drop their children off and pick them up on time.
It is also important to set out the age limits for your nursery by deciding on upper and lower age limits, in order to focus your care to a specific age group.
Considering ratios of children to staff and class size, will help to ensure you are providing an enabling environment for children to learn and progress.
It is essential to get the ratio right to ensure there are enough staff in your nursery to provide personalised support for each child, and to avoid any child feeling neglected.
Equally, this is the section of your plan where you can outline the extra activities and outings you can offer to extend children’s learning outside of the classroom, such as a trip to the local farm or zoo.
Before you can begin to consider starting up your own nursery business, you need to find out if there is demand for a new nursery in your area.
It may be that there is already a fair amount of nurseries that are full all year round. Therefore starting a new nursery in the local area may not be beneficial to you or your community.
However, if there is a gap in the market it is a good idea to start considering the fees other nurseries charge and what they offer to parents in the area already.
This is where market research comes in useful, as you can ask the community and authorities what they think the area is lacking and see if you can fill the gap.
Once you have identified potential gaps you can come up with ideas for how your nursery will stand out from the rest. For example, you could offer different extra curricular activities such as swimming or trips to the park.
Considering fees is equally important when conducting market research, as it is important to decide on a fee that suits the community you are based in, catering to multiple family situations and incomes.
For example, some parents may require full time care for their child, whereas other parents may only be looking for a nursery that will provide care 2 or 3 mornings a week.
Location and Premises
The property you choose for your nursery will have a huge impact on whether your target market will choose you over another somewhere else.
For example, if your premises does not have access to outdoor and indoor environments to provide a range of learning activities you are already one step behind other nurseries.
The location you choose should be informed by the market research you have previously carried out, and you have the option to run your nursery from home, or to choose a new premises.
This decision will depend on how many children you wish to cater for at one time, as it’s essential to ensure you have the right size facility to care for every child individually.
In order to stay in line with government regulations of 3.5 square metres for every child under 2, and 2.3 square metres for every child aged 3-7, buying a new property is an appropriate choice.
However, this will impact your financial plan, which we will visit later in this post, as the bigger the premises, the higher the running costs.
When searching for premises, it is important to consider factors such as:
- Location – consider your target audience and whether parents in the area will be attracted to your fees and offerings over other nurseries in the local area.
- Access – it is important that your nursery is accessible to all families that choose you. Therefore when considering location, you should consider if the property has adequate parking facilities, has public transport links, and safe pedestrian crossings nearby.
- Indoor and Outdoor Facilities – you must ensure you aren’t limiting the learning and development of children, thus your nursery must include enclosed grounds, kitchen and toilet facilities, a changing area, be well-lit, and have plenty of space.
- Hazards – the premises should have minimal potential hazards, for example a property on one floor would be ideal as you can restrict access to the kitchen area.
- Expansion – although you are only just starting up your nursery, it’s important to consider how your business will grow over time and keep in mind the possibility of future expansion to accommodate more children without moving location.
Including a financial plan within your nursery business plan is key for any new start-up, as it helps to determine exactly how much money you will be spending and what you will be spending it on.
In order for your nursery to continue providing quality care for children, it’s essential that you are gaining a profit after your outgoing expenses.
First, you need to consider start-up costs, running costs, and investing in insurance as top priorities as it is then possible for you to determine where your remaining profit can be spent to better your business.
Your business costs can be split into two areas – start-up costs and running costs.
There are some costs that are unavoidable which we will outline below, however it is possible to reduce start-up costs by doing as much as you can yourself and by making savvy purchasing choices.
For example, instead of kitting out the facility with new toys, you could buy second-hand items such as books and furniture.
Start-up costs involve everything to do with the starting up of your business. This includes everything that you will spend before your nursery can open its doors, such as:
- Setting up your nursery – this includes purchasing the property and any necessary conversions.
- Including the correct facilities – for example indoor and outdoor play areas, a safe, clean kitchen, and a toilet and changing area.
- Purchasing materials – this can be anything from furniture, toys, books, or materials for any planned activities.
- Registering nursery – this involves maintaining payments to Ofsted to ensure you are a registered childcare business.
- Marketing – this includes banners, your website, and anything that you use to advertise your business.
- Staff training – to ensure that all staff are prepared and adequately trained before you start providing care.
Once your nursery business is up and running, there will be multiple monthly and annual costs that you will need to keep up with to continue providing quality child care, such as:
- Rent or mortgage, and insurance payments
- Staff wages and your salary
- Utilities and maintenance
- Food and disposable products
- Cleaning services and products
- Ongoing training
These costs need to be included in your financial plan, as you need to pay for them each month in order to keep your business running smoothly.
Once you have outlined your start-up and running costs, you will need to have a rough estimation of your profit goal based on your fees and the number of children in your care.
As you are starting a new business, you can’t always rely on the places in your nursery being consistently filled for the first couple of years, as it will take time to build up your reputation in the area.
Therefore, your fees must reflect this by charging an amount that suits parents, but also that suits you and your business too.
Comparing how much other nurseries in the local area charge can give you a good idea of how much to charge, as your business may offer more. As such, you can increase your prices…
Your business needs to be profitable to be able to continue supporting children’s learning and development. Therefore it’s useful to work out exactly how many places need to be filled to cover your expenses and gain a profit on top.
It is also important to consider the different costs attached to both part-time and full-time places at your nursery.
For example, by registering a large proportion of children who only require care in the mornings, or a few days a week, this may leave gaps where your nursery is consistently empty one day a week.
This may have a knock-on effect on your profit, as the less children you have in attendance the smaller your income will be.
Insurance is another priority for the financial section of your business plan, as insurance policies help to ensure that all children are safe.
This list may include policies such as:
- Public liability insurance
- Employers liability insurance
- Professional Indemnity insurance
- Commercial property insurance
- Business interruption insurance
- Personal accident cover
These policies help to cover you in the event of a property incident such as a flood where your business has significant damage and must be closed for a period of time. Furthermore, these policies cover you in the event of an injury or sickness in terms of your staff and children on site.
Your marketing efforts must tell parents why they should choose your nursery over other options in the local area.
This section of your nursery business plan should outline how you are going to make your business known, and what style you are going to use to bring it to life.
You can use your market research to help pull your marketing plan together to ensure your branding is professional, and that your logo and colouring communicates your policies and brand identity.
Marketing can be carried out in various forms, such as:
- Signage and leaflets – this type of marketing is easily noticeable as you can place banners around your local area and send leaflets with more detailed information about your nursery to families with young children.
- Creating a website – you may wish to get the help of a SEO specialist and a web designer in order to get your website to the top of search pages, whilst providing all of the necessary information about your business.
- Social media – digital marketing via social media is a great way to attract new customers and provide updates on your nursery.
- Tours and open days – hosting open days and holding tours can show off your premises, giving your audience a feel for what your nursery can offer and can help to start building relationships with parents.
When running a business involving children it is important to demonstrate that you are aware of the fine print and legalities within your plan, so that when opening day arrives, all of your paperwork is filled out and up to date.
This includes documents such as:
- Your nurseries registration with Ofsted
- DBS checks for all staff
- A health declaration booklet
This paperwork proves that your business complies with all standards necessary in areas such as staff training, health and safety, group size, staff and child ratios, facilities, and quality of education.
Equally, these documents confirm your suitability for opening a nursery, ensuring you have declared any health problems, criminal convictions, and your compliance with the national education standards.
How to Write Your Nursery Business Plan (with Free Business Plan Template!)
As we have outlined above there are various sections to consider when creating your nursery business plan, from financial planning, to market research, all of which should be centred around providing the best care and education for children.
Do keep in mind that everything we’ve covered in this post today is just the beginning. You might later need to adapt your business plan to better suit your ambitions as you grow. Still, that’s not to say that what we have here isn’t going to help you build a solid foundation.
Writing a business plan and setting up your own nursery is a lot to think about, and that’s before the children have even arrived.
Learning Journals can help at this stage, as our platform can take care of storing parent and child data, recording observations, and tracking the progress of each and every child.
While you prioritise spending your time with your newly registered nursery class, the Learning Journals platform can put parents at ease by providing them with updates of how their child is settling into their new environment.
To learn more about how our platform can help, request a free demo today!