Setting up a Nursery

Silver_Lilly

We are after some advice,We are thinking of setting up a business and have seen a nursery for sale that we are thinking of trying to get a mortgage on and that i would run.

Therefore we are hoping you wouldbe able to offer us some advise on general start up costs for any business.

We are assuming that are first steps will be to find out as much as we can from the estate agents and try to get hold of the accounts to see what a mess it was left in.

Then get a business plan together for the bank we have no experience at all of doing this.

crispeater

hi not sure if this is much help to you but im currently doing the same as you but not buying an already established nursery but starting one from scratch.

i contacted my local council and they sent me LOADS of info out and i've been given what i can only call a 'key worker' to help me doing the awful bits like buisiness plans. maybe send you local council an email an see if anyone there can help you?

goodluck hope it goes well

WHA

I presume you are talking about a children's nursery and not a gardening one!

You really MUST work WITH the local authorities. I helped set a new one up a couple of years back and we wouldn't have got anywhere near the amount of grants if we had gone ahead without following their rules.

We had to scrap our business plan and start again following their guidance and although we ended up spending a LOT more money than planned, the grants received were huge - the owners only put a few thousand pounds in at the start (which was repaid in the first few months) and LA grants have amounted to well over £100,000.

The Govt are pumping money into nurseries with their Sure Start schemes and free places. Remember that the Govt are paying for everyone to have limited free places and also paying for extra sessions for those on benefits etc.

The grants they pay are towards your costs, such as towards fire alarms, building modifications, installing fire doors, fencing and surfacing the outdoor play areas, etc etc. If you ask in advance and get grants approved, this sort of thing costs you little if anything. If you do it first and ask for a grant afterwards, you get nothing. You have to prove to them that you couldn't do it without a grant.

Of course, there are downsides, like the power the LA will have over you. In our case, they insisted on a properly qualified cook to cook the lunches (how difficult is it to cook frozen jetters!!) - but then contributed towards the extra cost of employing one. They also impose minimum pay scales for staff - but again, follow their rules and they increase your grant towards it.

Why do you think there are so many new children's nurseries being set up? It's because there is so much Govt money being thrown into them. This same sort of funding is not available to existing nurseries, so you may well be better starting a new one from scratch than buying an existing one.

Research you area well - you are looking for an area which is socially and/or economically deprived - which doesn't have much childcare facility at present. You'll then tick loads of boxes for the local LA. If you want to buy/start a nursery in a better area, they'll decide that there is no need for state help and you'll be eligible for far less. I'm afraid politics do come into this sort of thing quite a lot.

If you are seriously considering buying an existing nursery, how badly would you be affected if another one/two were opened up near to you under the surestart scheme? If the nursery you are looking at is limited as to its equipment, floor space, places, outside areas etc., you may well find you'll lose your children to a new competitor helped by the LA.

Savvy_Sue

I agree nearly completely with WHA if it's a children's nursery. The body you have to register with is Ofsted, they have loads of information on their site and it will give you an idea of the kind of hoops you have to jump through to operate safely and legally. It is not something you can do in a hurry: even if you're taking over an established nursery, you need to make sure that the staff are qualified, competent, and happy to stay on (so don't even think of cutting their wages!)

WHA wrote:

Research you area well - you are looking for an area which is socially and/or economically deprived - which doesn't have much childcare facility at present. You'll then tick loads of boxes for the local LA. If you want to buy/start a nursery in a better area, they'll decide that there is no need for state help and you'll be eligible for far less. I'm afraid politics do come into this sort of thing quite a lot.

This is the bit I'd slightly disagree with. Although what WHA says is true, you have to remember that these grants are for starting up a new facility: they don't carry on forever. So you need to consider whether you are going to be financially sound in the longer term in a socially / economically deprived area - where, by definition, parents may not be able to afford to pay the top whack for childcare ... Or would you be better off starting up in a less deprived area, where parents will happily pay top whack for excellent care.

Childcare is certainly not an easy way to make money ...

stacey21_2

Not sure if this applies where you are or not, but in Scotland to open a nursery, you yourself will have to have a childcare qualification, and not just your staff. You cant just be a 'manager' of the business, you have to have a qualification. :-)

go4it

Do some research on the previous owners, check out what happened with the Nursery etc. If it has a bad reputation it is going to take a lot to repair it. You are dealing with people's children. If a restaurant has a bad rap people may give it another go to see if it has changed. With their children people will not do that! If it has a bad rap they will stay away!

I worked in a childcare place once and ended up being a whistleblower. The centre did not maintain staff ratios and was putting children at risk. I contacted OFSTED who wrote letters to the centre. The centre talked their way out of it ('we are so sorry, one off (yeah right!) blah blah'). After they found out I made the call to OFSTED, I got the sack. 6 months later I received a 'settlement' for me not to take it to a tribunial. My complaint is still on their OFSTED report. Something for you to consider about the childcare world!

Silver_Lilly

Thanks everyone.I have worked in the business for 20 years but not ever worked for myself.so advice on how it effects your family life and costs business plans etc would be really great.

Savvy_Sue

Silver_Lilly wrote:

Thanks everyone.I have worked in the business for 20 years but not ever worked for myself.so advice on how it effects your family life and costs business plans etc would be really great.

I haven't done it as a business, but I helped set up two out of school clubs. The first time around I very much took the lead, and felt as if I was running my own business - but not making any money from it!

It was hard work. If staff went sick unexpectedly, I often ended up standing in - once for a fortnight, at the end of which my own children were exhausted (they didn't usually go to the Club every day), and I knew my place - ie in the background, NOT working with the children!

When the wages needed to be paid, I had to work out whether there was enough money in the current account to cover them, work out the PAYE, write out the wages slips, and get the cheques countersigned. This had to happen every week, without fail, even if I felt ill myself.

When we needed more staff, I had to organise adverts, send out application forms, shortlist (with others), interview (with others), take up references, initiate police checks, send out offer letters, and induct the new staff.

I had to sort out any disciplinary problems and make sure staff knew about training they needed to attend. And I had to deal with parents' complaints.

All this while marketing the club, trying to increase the numbers of those attending - oh, and arranging escorts / transport for children coming from different schools. I guess at nursery level that wouldn't be a problem!

Second time around was a lot easier, partly because I knew what I was doing, and partly because some other mug offered to be chairman so I could be Treasurer. Even so, I had to stand in for her at the initial Ofsted inspection, because she was either on holiday or in hospital having a baby - some feeble excuse like that ... :rotfl:Also by then I was working full-time at a distance from the Club! So if a problem arose that needed a committee member on site in a hurry, no-one called me because it could take me an hour to get there!

But that illustrates my point very well: SOMEONE had to be available for Ofsted, SOMEONE had to be prepared to drop everything and get stuck in when a crisis loomed. And if it's your business, that SOMEONE will be YOU!

It did have an impact on family life. Mine were 3, 5 and 7 first time around, and 7, 9 and 11 second time around. Whenever anyone was put in touch with me for advice, my first words were always "Don't do it!" - although I don't regret doing it either time.

If you do go for it, have contingency plans for EVERYTHING. Well, everything that's success-critical - paying your staff, having enough of them, retaining them; getting enough children through the doors, keeping parents happy, breaking even ...

You might wonder why I haven't mentioned premises. Mercifully we had very few problems there: the school where I ran the first one was very happy to have us, and the caretaker was a sweetie, prepared to work around us for cleaning etc. The second one was in a hired hall, and they were desperate for our rent. BUT they didn't always understand that when we said we needed it full-time in school holidays, we did mean full-time, and couldn't not open just because they had a longstanding Art Club meeting which didn't break for holidays. Our compromise was making that day Outings Day ... Then they thought we could start 15 minutes later once a week so they could fit a Yoga Class in - err no, we start then because that's when the schools come out, we can't make them hang around in the wet and cold waiting for Yoga to finish! :rotfl:

Really good childcare will ALWAYS be in demand. It takes a lot of organisation and commitment to offer it at an affordable price! I hope I haven't put you off: but you did ask ... One of our trustees (I work for a charity now!) does run several day nurseries, and is well established, doing well. But even she mentions problems - if one staff member gets pregnant, so do several more!

Good luck ...

ferrett

You will also have to think about how you are raising the money. It can be a little easier if its the freehold property which is being purchased as part of the transaction as banks will generally leverage 70% of the property against the acquisition.

Glasgow1

Hi

You mention that there is potential to get grants for things such as installation of firm alarms. This is exactly what I am looking for - any ideas on who I specifically need to contact? thanks!!

WHA wrote: »

I presume you are talking about a children's nursery and not a gardening one!

You really MUST work WITH the local authorities. I helped set a new one up a couple of years back and we wouldn't have got anywhere near the amount of grants if we had gone ahead without following their rules.

We had to scrap our business plan and start again following their guidance and although we ended up spending a LOT more money than planned, the grants received were huge - the owners only put a few thousand pounds in at the start (which was repaid in the first few months) and LA grants have amounted to well over £100,000.

The Govt are pumping money into nurseries with their Sure Start schemes and free places. Remember that the Govt are paying for everyone to have limited free places and also paying for extra sessions for those on benefits etc.

The grants they pay are towards your costs, such as towards fire alarms, building modifications, installing fire doors, fencing and surfacing the outdoor play areas, etc etc. If you ask in advance and get grants approved, this sort of thing costs you little if anything. If you do it first and ask for a grant afterwards, you get nothing. You have to prove to them that you couldn't do it without a grant.

Of course, there are downsides, like the power the LA will have over you. In our case, they insisted on a properly qualified cook to cook the lunches (how difficult is it to cook frozen jetters!!) - but then contributed towards the extra cost of employing one. They also impose minimum pay scales for staff - but again, follow their rules and they increase your grant towards it.

Why do you think there are so many new children's nurseries being set up? It's because there is so much Govt money being thrown into them. This same sort of funding is not available to existing nurseries, so you may well be better starting a new one from scratch than buying an existing one.

Research you area well - you are looking for an area which is socially and/or economically deprived - which doesn't have much childcare facility at present. You'll then tick loads of boxes for the local LA. If you want to buy/start a nursery in a better area, they'll decide that there is no need for state help and you'll be eligible for far less. I'm afraid politics do come into this sort of thing quite a lot.

If you are seriously considering buying an existing nursery, how badly would you be affected if another one/two were opened up near to you under the surestart scheme? If the nursery you are looking at is limited as to its equipment, floor space, places, outside areas etc., you may well find you'll lose your children to a new competitor helped by the LA.

cassandra22

I need some help and advice on setting up my nursery, i was reading a blog about getting help from the la but where to go i don't know.can any one help