Setting up a new childcare business
Find out what you'll need to set up a childcare business.
Types of childcare
It's important to establish the 'type' of childcare you'll provide. This is important for registering with Ofsted who recognises the following four types of childcare:
- childcare on non-domestic premises - childcare on premises that are not being used as a home, for example a playgroup, day nursery, pre-school, creche, after school club, holiday club or breakfast club
- childcare on domestic premises - four or more people looking after children on domestic premises including childminders and assistants
- childminders - individuals looking after children on domestic premises which is not the home of any of the children being cared for - find outhow to become a childminder
- home childcarer - childcare at the home of one or more of the children being cared for, for example a nanny or au pair - find out how to become a Nanny
It is important to know what type of childcare you will provide, what you will offer and how many hours and days a week you will open for.
Suitable premises
Early years and childcare provision can be provided on:
- domestic premises, which is somebody's home - for setting up a childminding business
- non-domestic premises, which can be purpose built premises like a village hall or school premises, for setting up a nursery, pre-school, out of school provision
The useable space inside your premises will determine the number of children you can look after.
The amount of space needed for each child depends on their ages. Find out more in the Early Years Foundation Stage (EYFS) page 27 section 3.57.
Take into consideration the space required for:
- storing equipment and resources
- enough toilets and sinks for children
- access to a safe outdoor play area
- adequate parking for staff and parents or good public transport links
If you're planning to prepare and serve food on the premises see the Food Standards Agency information. If you need to carry out building work contact the Local Authority Planning team and make sure premises meet fire regulations.
Things you should do before setting up your childcare business
Market research
Research your market to gain understanding and knowledge of the market place.
Market research shows gaps in the market that your new childcare business could fill.
Analyse the competition
You can find a list of established childcare businesses in Brighton & Hove.
You can use this list to research things like:
- opening hours
- the age groups they cater for
- their services and activities
- their facilities, for example an outdoor play area
- their fees
- the meals and snacks they offer
- whether they offer both full and part-time places
- if they are flexible over dropping off and collection times if parents need it
- do they offer local authority funded places for two, three and four year olds
Establish what your customers want
Talk to as many parents as possible and find out:
- what they would like a new childcare business to provide - discuss opening hours, flexibility and activities
- if there are any gaps in existing childcare that you could fill - like after school clubs
- whether they are satisfied with current childcare options in the area, and if not what specifically they're unhappy with
- what they consider is a reasonable fee to charge for the service they want
Look at demand in the the city
Look at the type of people who live and work in the area where you want to open your new childcare business.
For example:
- are there families with pre-school or school age children
- do both parents work
- are there single parent families that would like to work if they could find affordable childcare
- are there a lot of businesses
- are you on a main route to getting in and out of the city
- is there a hospital or large supermarket close by - parents may work unsociable hours and require childcare late at night or early in the morning
Get business advice
Early Years Business Zone (EYBZ)
Created by the sector for the sector, the Early Years Business Zone is a an initiative that provides a dedicated, free to access, online resource that is tailored to the specific needs of early years businesses. This free online toolkit provides a range of tools, advice and industry expertise to help you sustain a healthy business.
Business Smart for childminders
Business Smart is a collection of ideas, inspiration and tools to help new and existing childminders in England develop a sustainable business. Find top tips, videos, case studies, downloadable tools and other essential ideas to help you make the most of your business.
Getting started HMRC e-learning course
This HMRC e-learning course is aimed at anyone starting a business as a sole trader (running the business on your own). Find information about tax, National Insurance, business records and expenses and help you to ensure you are compliant with regulations from HMRC, Companies House and/or the Charity Commission.
Business sustainability
The Department for Education (DfE) has information to support early years providers to run sustainable businesses.
More information
Find information on:
- how to carry out market research, some techniques for how to promote your business and increase occupancy and ideas on how to respond to changing needs responding and adapting to changing needs
- providers' experiences in: successfully managing occupancy
- managing monthly finances
- on extra sources of income
- funding that parents can access to pay for childcare - this could include tax-free childcare , childcare elements of tax credits , childcare elements of Universal Credit , employer support, such as childcare vouchers
Business training
Find a programme of training courses for early years providers.
Know your costs
Start up costs
When planning a new childcare business, it's important to know your costs.
- start up costs are the initial costs of setting up the business, which can include the purchase and lease of premises, building costs, equipment, recruitment costs and marketing costs
- running costs are the every day costs of running the business which can include staffing, gas, electricity, insurance, disposable resources (e.g. creative materials) and food
Business planning and financial management
You need to make a business plan and include your budget and cashflow forecasts, to demonstrate that your business ideas will work.
Read GOV UK's supporting early years providers to run sustainable businesses.
When setting up a new business, it is important to know your obligations regarding data protection. The Information Commissioners Office provides information on how to comply with required legislation.
Funding for early years and childcare businesses
Find out about funding you can access. In Brighton & Hove, early years providers receive:
- Early Years Free Entitlement (EYFE) Funding for 2, 3 and 4 year-olds
- Early Years Pupil Premium (EYPP)
- disability access fund (DAF), special educational needs (SEN) inclusion fund
GOV.UK provide guidance on extra sources of income for childcare providers.
Learn about recruiting childcare staff
You will need to make sure you follow all the necessary employment law and health & safety law and regulations.
There are also early years specific regulations on having a qualified manager and sufficient qualified staff to adhere to child ratios and also regulations on appropriate qualifications that count in the ratios.
Branding and marketing
It is vital to have a business name, branding logo or image and website.
To register a company image and brand logo, go to The UK Copyright Service.