Expert help
It pays to take professional advice and read widely before you take steps to start up a nursery.
Consultancies
* The National Day Nurseries Association can offer advice and support through its local networks and regional fieldworkers, tel: 01484 541641.
* Martin Pace, childcare management expert, nursery owner and author of Starting a Nursery published by Nursery World (see below), can be contacted by letter at Christmas Farm, Picketts Lane, Redhill, Surrey RH1 5RG or tel: 01293 775556.
* Childcare Partners has expertise in helping employers to decide on childcare strategy, particularly in the area of partnership schemes with local communities, tel: 0118 950 3200.
* Don't know where to start? Ofsted problems? Call Trio Childcare Connections Ltd on 01793 514422 and ask for Gerry Gardner or Julia Hinns.
* Sandra Brouet, a small business consultant, runs the Child Care Plus Daycare Development and Training Consultancy, tel: 020 8598 2508 and 07961 408 647, e-mail: childcare.plus@btinternet.com* Terry and Margaret Wiseman have over 12 years experience of running a nursery and used to run seminars on setting up a nursery, tel: 01673 844404.
* Busy Bees, as well as owning a network of nurseries, can help develop facilities either in partnership or on behalf of large companies, tel: 01543 416616.
Publications
* Starting a Nursery - A practical guide for early years professionals (Nursery World, 8.99) by Martin Pace, will guide you through each step of the process of starting and running your nursery business.
* Starting a Day Nursery is a comprehensive resource pack, 15, from the National Day Nurseries Association, tel: 01484 541641.
* The Pre-school Learning Alliance produces a free information pack, tel: 020 7833 0991 and has a useful website: www.pre-school.org.uk* Setting up a nursery - A step-by-step guide (revised and updated) by Sue Finch and the Network team, 7 to members, 9.50 to non-members (including p&p), from the National Early Years Network, tel: 020 7607 9573.
* Starting and Running a Nursery - The business of early years care by Helen Jameson and Madeline Watson (Nelson Thornes, 17,tel: 01242 267267, quoting ISBN 0748733477) Accountancy practice
* Hazlewoods, at Windsor House, Bayshill Road, Cheltenham, Glos GL50 3AT, specialise in a number of business sectors, one of which is nursery care, tel: 01242 237661; website: www.hazlewoods.co.ukFunding
Before you discuss plans with potential funders, you need to work out how much money you are going to need and draw up a business plan (see 'Questions and Answers', page 9).
Types of funding
There are two main types of funding:
* debt (or loan capital), which you borrow from a lender such as a high street bank, and * equity, which means selling a share of your business to a business partner, even though it has not yet begun trading.
It is usual for most businesses to operate with a mix of debt and equity. Your preferences and financial circumstances will determine the balance between the two. Pursue both options simultaneously to increase your chances of success.
Sources of funding
Debt:
* The easiest and quickest source is through family and friends. If you know someone with enough capital, do not be afraid to discuss your proposal. They may expect a share in the business, in which case it will become equity funding.
* A bank may be able to consider a loan if you already have some capital or assets of your own, or if you have taken on an equity partner.
* Even if you have no capital, it is useful to see your bank manager for advice on loan schemes available to business start-ups such as the Government Loan Guarantee Scheme.
* Grants are another source of funding, but the sources are few. If you are under 30, the Prince's Youth Business Trust is a good place to start and your local Training & Enterprise Council may also offer advice on how to source low-cost or free money - but be prepared for a long haul.
Equity:
* A new business is unlikely to attract venture capital (money from finance companies which buy a shareholding in other companies for a profit), so the best source of equity finance is what is known as a 'business angel'. This may be someone with business experience and money to invest who is keen to get involved in a profitable business. They may want to work with the business on a part-time basis, bringing valuable skills with them.
* Business angels keep their ear to the ground for potential investments through a network of contacts and, for a fee, you should be able to access that network through either the local Learning Skills Council, Business Link, or through a number of private agencies called financial intermediaries (fees range from around 500 upwards). You can access these organisations through your local authority, local chamber of commerce or your accountant.
* Business angels who have worked in similar sectors to childcare, such as healthcare, hotels or retail may be the most easily persuaded to see the benefits of investing in a nursery, as profit margins are likely to be similar.
Pros and cons
Debt:
* The lender weighs up possible return against risk. You will be expected to put up some of the capital (for example, by offering a charge on your home); this minimises the risk to the lender.
* Once you have entered into a loan agreement, you must meet repayments, irrespective of whether the nursery is making a profit.
* You retain ownership of the nursery and therefore the value of the business when you come to sell it, rather than sharing this with a partner. You will also have a greater say in decision making.
* Debt is quicker to implement as a lender's decision is based on financial criteria, not on building up a working relationship.
Equity:
* You will only be required to pay back your funder out of profits, giving your business greater security.
* Your partner is likely to get involved in the business, which may bring new skills. If you have a mix of equity and debt, your lender may feel more comfortable with your partner's skills on board.
* You will be surrendering some of the eventual profits of the business. How big a share of the business to part with is an emotive issue and there are no rules. You must feel comfortable with the deal if you are to be motivated enough for the hard work involved.
* You will also be giving up some control of the running of the company and will need to work with your partner for the benefit of the business.
* Having equity funds from a partner can sometimes be a help in securing further finance from other partners or lenders.
Buying a nursery
See 'Lock, stock and barrel', page 15, for information on deciding whether to buy an existing nursery.
Sales agents
There are a number of companies specialising in the sale of nurseries and schools. These include:
* School Transfer Consultants, Haydon Cross, Dale Road, Southfleet, Kent DA13 9NX, tel: Peers Carter on 01474 534151. (They deal primarily in nurseries of at least 50 places).
* AH Lansley, 111 Oxford Road, Reading, Berkshire RG1 7UH, tel: Morvyn Hayes on 0118 959 0271.
* Christie & Co can also offer full confidential advice, without obligation, to assess the value of a nursery business. The company has 14 UK offices, with a head office in London (tel: 020 7227 0700). For details of nurseries currently on the market visit www.christie.com* National SchoolTransfer, Tilshead House, Tilshead, Salisbury, Wiltshire SP3 4RX, tel: Patrick Carter on 01980 621251.
Independent valuers
The following have a good understanding of the childcare sector and are recognised by most lending institutions:
* Taylors, Court House, Mill Court, Featherstone Road, Wolverton Mill, Milton Keynes, Bucks MK12 5QS tel:01908 226611. Website: www.tbsv.co.uk* Matthews & Goodman has a London office (tel: James Hewetson on 020 7747 8847) and offices in Liverpool and Manchester.
* FPD Savills is at 20 Grosvenor Hill, London W1K 3HQ, tel: 0207 7499 8644.
* Pinders is at Pinder House, Central Milton Keynes, Bucks MK9 1DS, tel: 01908 350500.
Modular building suppliers
* Elliott Group, has modular and relocatable buildings, tel 01543 404040 and ask for Paul Drew or e-mail him on pdrew@elliott-group.co.uk,or see www.elliot-group.co.uk
* Portakabin's Lilliput nursery comes in a range of sizes to accommodate up to 60 children, tel: 01904 611655.
* Homelodge Buildings has attractive, high-quality timber buildings, tel: 01962 881480. Website: www.homelodge.co.uk
* Globalmobile specialise in modular nurseries, tel: 01892 722733.
* The Wernick Group produce steel-framed buildings clad in steel, stone or brick, tel: 01792 321222. Website: www.wernick.co.uk
* Terrapin produces buildings for sale or lease, tel: 01908 270900 or see www.terrapin-ltd.co.uk for projects undertaken.
* Rovacabin supplies modular and portable classroom/nursery/ cr che units for sale or hire, tel: 01844 267200.
Legislation
Besides the standards required for registration and inspection which come under the Care Standards Act 2000 (see 'Stamp of approval' on page 20), the legislation you need to be familiar with falls into two main areas - employers' responsibilities and premises.
Employers' responsibilities
Terms of employment
* Employment Protection (Consolidation) Act 1978
* Trade Union Reform & Employment Rights Act 1993
* Working Time Regulations
Advertising/Recruitment
* Sex Discrimination Act 1975
* Race Relations Act 1976
* Disability Discrimination Act 1995
Pay
* Equal Pay Act 1970
* National Minimum Wage 1999
Further advice
* www.businesslink.orghas a wealth of information, or phone their helpline on 0845 600 9006 (8am-8pm Mon-Sat) at local rates
* The Arbitration, Conciliation and Advisory Service (ACAS) produces a number of useful guides on your responsibilities as an employer. To order these, tel 01455 852225. Some are available online, see their website: www.acas.org.uk
* The Institute of Personnel and Development (IPD) has a number of benefits, including a legal advice line, for members, tel: 020 8263 3310.
Premises
Regulations
* Unitary Development Plan
* The Fire Precautions Act 1971
* Health and Safety at Work Act 1974
* Management of Health and Safety at Work Regulations 1992
* Health and Safety (First Aid) Regulations 1981
* The Reporting of Injuries, Death and Diseases and Dangerous Occurrences
Regulations 1981
* The Electricity at Work Act 1989
* The Food Safety Act 1990
Further advice
Take advice from your local planning authority, Ofsted officer, fire officer and environmental health officer.
Equipment
There is such a vast range of nursery equipment available that it can be difficult knowing where to begin.
First, make a list of everything you'll need, using our reminders below, then set yourself a budget - you'll need at least 10,000 - 15,000 for a 40-place nursery.
Next, get hold of suppliers' catalogues and compare prices. Ask other people who work with young children, such as teachers and librarians, about their favourite items and recommended suppliers. Start with the core equipment and add to it as your business increases. See Nursery World's supplement Nursery Equipment, which is published three times a year, for more information.
Checklist
Role play
* Home-corner furniture; Smaller props, such as cash till, pans, telephones, food; Dressing-up clothes
Watchpoint: Make sure that any furniture is the right height for your predominant age group. Watch out for sticker decorations that peel off easily. Avoid battery-driven items. Don't be tempted to economise and use cheap items intended for domestic use. Clothes and accessories are best kept in an open storage unit with a fixed mirror, hanging rail and castors.
Small world
* Dolls and accessories; Teddies and soft toys; Miniature people sets; Animals, buildings, vehicles
Watchpoint: Have plenty of sturdy, clearly labelled storage boxes for all the bits. Use a large craft tray to contain small world games. Watch out for washability.
Book corner
* Books; Seating; Display shelving/storage
Watchpoint: Make sure you have places to store and display big books.
Toys for babies/toddlers
* Fabric books, ring stacker, push-along toys; Rattles/teething rings; Baby gym/playmat; Mobiles
Watchpoint: Choose washable toys if they're likely to go into a baby's mouth.
Display
* Pinboard; Display shelves; Fabric calendar
Watchpoint: Bright colours can make a splash.
Music
* Tape recorders; Rainstick, drum, maracas, xylophone
Watchpoint: Search out durable makes.
Outdoor play
* Climbing frames and swings; Pop-up tent/den-making equipment; Ride-on or push-along toys; Safe surfacing
Watchpoint: Don't skimp on trikes and toy cars - if they aren't durable, they aren't safe. If you can, buy two or three trikes exactly the same type to avoid squabbles. Make sure that all climbing frames have soft ground or safe surfacing beneath them.
Arts and crafts
* Paint, paper, pens, glue, safety scissors; Modelling materials; Craft tables, easels; Overalls; Drying rack for paintings
Watchpoint: Keep overalls near easels or craft tables.
Construction
* Traditional wooden bricks; Plastic blocks; Popoids and gear systems Watchpoint: Good storage boxes are essential - deep trays with easily removable lids are best. Avoid hollow plastic pieces that become deformed when chewed. Choose established brands so that sets can be replenished easily when bits get lost.
Games and puzzles
* Shape sorters; Play trays; Jigsaws; Simple board games; Memory games Watchpoint: Games shouldn't keep children waiting their turn for too long. Jigsaw puzzles should be simple and uncluttered for tinies, but alive with detail for older children.
Sand and water
* Raised sandpit; Water table; Buckets, spades, boats, jugs, funnels Watchpoint: Trays for the sandpit should not have sand-retaining nooks and crannies or metal parts that could rust.
Equipment suppliers
* Asco, tel: 0113 2707070
* Community Playthings, tel:0800 387 457
* Early Learning Centre Direct, tel: 08705 352352
* Eibe UK, tel: 0161 962 8295
* Galt, tel: 08702 424477
* Heron, tel: 0800 373249
* Hope, tel: 08702 414400
* NES Arnold, tel: 0870 6000 192
* Orchard Toys, tel: 0115 937 3547
* Step by Step, tel: 0845 300 1089
* TP Activity Toys, tel: 01299 827728
* Wesco, tel: 01376 503590
* Wizard Games, tel: 020 8903 7002
Decoration
* June McLeod, a colour therapy consultant, can suggest colours for a new nursery in order to create harmony and stimulation. Contact her at PO Box 306, Camberley, Surrey GU15 2LE, tel: 01276 62940.
Building a staff team
Recruiting high-quality staff, and keeping them, is crucial to the success of your nursery.
Preparing to recruit
* Using your business plan, decide how many children you will be seeking to enrol in the first months of the nursery's life.
* Next, using the staffing and qualification level requirements of the Care Standards Act 2000, decide how many people you will need to employ initially and what their qualifications will need to be.
* Draw up job descriptions and person specifications and then compose the advertisements. A job description is a written statement of the duties and responsibilities to be undertaken, and a person specification details the characteristics required to undertake a particular job, such as specific qualifications, experience and skills.
Appointing a manager
* Appoint your manager first, then your senior team members, and so on. A good manager will have the right blend of experience, qualifications and personal qualities. Under the Childcare Standards Act 2000 the minimum experience is two years in a daycare setting plus a level three qualification appropriate to the post. The right candidate needs to have proven managerial, communication and leadership skills.
Selecting your team
* Recruit downwards allowing your manager and senior staff to help you select so that you build a cohesive team.
* Pay careful attention to equal opportunities. You should treat every job candidate equally without regard to gender, race, colour, national or ethnic origin or marital status. You are expected to ensure that no applicant is discriminated against because of physical disability, age, religion, sexual orientation, trade union or professional association activities or family or care commitments. Your team should reflect the community in which it is based, with members drawn from different backgrounds.
* Prepare and ask the same questions of applicants so that when you compare candidates you are as objective as possible and able to demonstrate that you have treated everyone equally.
* Job interviews are nerve-wracking, so avoid intimidating applicants and limit the interview panel to two or, at the most, three people.
* For each post, use the job description to determine which are the essential requirements and the desirable attributes that you are seeking. Some interviewers keep a score sheet, ticking off each applicant's possession of essential and desirable attributes so they can compare candidates.
* Balance personal qualities against qualifications.
* Invite candidates to spend time in the nursery and see how they get on with the children and other staff members.
* Trust your judgement in determining whether someone will fit in with your team.
Inclusion in this directory does not necessarily imply recommendation.
