How To Write a Business Plan For a Nursery

Why Write a Business Plan?

  • It helps you set a clear statement of your business mission and vision
  • Sets values that you can lean upon and steer you through tough times
  • You set benchmarks you can use to track your progress and performance
  • Gives an analysis of your nursery industry, including any opportunities and threats
  • Gives you an insight into your potential customers and what parents may want
  • Lets you know how much you will make as well as your likely costs
  • Is essential if you hope to get any outside funding

A nursery business plan helps reduce the likelihood of you:

  • Running out of cash
  • Missing sales projections
  • Losing customers due to poor quality
  • Becoming overwhelmed by too many tasks or options
  • Going bankrupt because you don’t have a plan of how to make money

Remember! Time spent putting together a good business plan is time well spent.  The more time you spend the better prepared you will be.

What a Business Plan Should Include

Your nursery business plan can be in any form you decide and include whatever you want.  Though typically they will include (we will go into more detail on each section later in the article):

  1. Executive summary: this is a summary of the key points in your business plan. It includes key information like your profit and loss.  It should be short and concise and convey why your business is viable.  You should include any experience you have in childcare here.
  2. Company Overview: this is where you describe your company and your ethos. Include your mission and vision statement, descriptions of your values, services, ways you’re unique and what opportunities you plan to seize
  3. Business environment: this section analysis your local nursery industry giving descriptions of direct and potential competitors; and a close look at your customers e.g., their age, employment status, what they want from a nursery etc
  4. Company Description: here you include information about your staff structure, the different services you offer e.g., part-time, full-time, drop offs etc, your marketing potential and
  5. Company strategy: puts a strategy going forward for the company
  6. Marketing Plan: this is where you describe how you plan to reach parents/ customers, make sales and develop loyal customers
  7. Financial Review: this outlines your current finances as well as what you expect your income and expenditure to be. It would include financial statements like your balance sheet and cash flow statements
  8. Action Plan: here you detail the steps involved in implementing your business plan
  9. Appendixes: this section you just put any information to support your business plan. It may include reports, legal documents etc.  It’s used to justify some of the things you have put in the business plan and gives a more rounded understanding of your business plan

Reminder throughout the business plan it is important to make it as simple and concise as possible.

The goal of the business plan is to answer these questions:

  1. Does the nursery have a good chance of starting and succeeding?
  2. How much money will the business need to get up and running?
  3. Who are your customers, and how will you reach them?
  4. Why parents will choose you instead of your competitors?

It should also help you learn:

  • Whether you’re prepared to run the nursery
  • How you can turn your passion for children into a profitable business
  • What resources you will need
  • How much you should and can charge

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Where to Start?

So, now you know what needs to go into your nursery business plan, what do you do next?

I always say start with what you know.

Firstly, start by creating the sections mentioned above.  (Don’t worry we can complete the sections later.)

Then, start by adding to your executive summary and writing about your experience in childcare.  How many years’ experience you have, any qualifications you have, why you got into childcare/ why you want to open and what sort of nursery you want to create.

Once you have done this you can begin completing the following sections, in any order you wish.

Executive Summary

As well as putting your experience and what else you may have started writing. You can also include here:

  • What you plan to do different than other nurseries
  • Your mission statement – your ‘why?’
  • Some key objectives for the first few years e.g., to be profitable by end of year one, to run at near capacity by end of year 2 etc
  • Anything you believe will make you successful e.g, are you already known to your local community, will you offer a something your parents need that other nurseries don’t, will you market well
  • Your organisation structure i.e., are you running the nursery by yourself/ will you have a partner/ hire a manager
  • What other relevant experience you may have that will help you run your business
  • Are there any opportunities you are looking to capitalise on e.g. the expected rise in childcare demand post covid-19
  • Where will you be located? What is the demand like there?
  • Who are your typical customers e.g., two working parent households who may need full time childcare because of this/ people using government funding? How many of these people are in your area?
  • What is your competition? Private nurseries/ school nurseries/ childminders etc. How many are in your area?
  • What are your growth plans, how many children do you plan to open with and how many do you expect per month (be conservative with your predictions)
  • You may briefly put some of your expenses and losses and any charts you create that show your profit for the first few years

Remember that this section is a summary and overview of things you would put elsewhere into your business plan, so you do not need to go into depth about all of these points.

Company Overview 

Here you should list:

  • What you will be doing and what will support the services you give?
  • Your start up costs and how this will be funded
  • Information on your building (size and location) and any expansion plans
  • Your business set-up – are you a company, partnership, sole-trader. Who else is involved in the business?

Business Environment 

  • Competition analysis. What options are available to parents? Chain-Nurseries, small private-owned nurseries, home-based childcare/ childminders, staying with family, not working. What are the benefits/ negatives of these.
  • Will you differ from them? If so, how?
  • List three or four of your competitors as well as key information about them – their size, price, location, Ofsted grade etc
  • Research the demand in your area. For support in doing this you can enrol on the full nursery course which teaches you how to open your own nursery from start to finish in just 6 months, with a limited budget.  Click here to enrol: https://www.openanursery.co.uk/courses
  • How is your market segmented e.g. full-time working couples needing full time care, part-time workers needing shorter shifts, funded children?
  • Where are your parents located?
  • How many under 5s in your area?
  • How many nurseries are in your area?
  • Brief description of how you will target customers e.g., referrals, website, open days
  • Growth rate in the area
  • Will there be an increase in demand in your area? Likely after COVID-19.
  • SWOT analysis

Company Description 

  • Your staffing structure – how many and what employees you plan to hire and the costs. This will form part of your personnel plan
  • If you already have some of the staff ready to start, what experience do they have and why are they suitable?
  • When will you hire new staff and how will you recruit them?
  • The services you offer e.g., opening closing times, all year/ term time only, school drops, part time/ full time
  • How will you teach – Montessori type, learning through play
  • What is your focus? Fun or professionalism

Company Strategy

  • What is your ethos/ value proposition? Use your SWOT analysis to determine this.
  • Where will you position yourself in the market? Are you a premium provider or cheaper provider or in-between?
  • What will you use to differentiate yourselves?
  • Briefly describe marketing strategy?
  • What will you charge? Lower price as you’re new, or establish yourself at a premium
  • What are your sales strategies and forecasts? The sales forecast should be detailed.  Stating how many new full-time/ part-time children you expect on opening and then per week, as well as how much income this will generate.  When are you likely to have more children enrol or leave e.g. some may go in summer to go school more may enrol at the beginning of terms?
  • What businesses will you align with to be help with e.g., you may work with local schools to help with marketing

Marketing Plan

  • What marketing materials will you create? E.g., flyers, brochures, advertising etc
  • Promotion strategy – when and where will you do your marketing e.g. planning open days, when to distribute flyers and what area
  • How will you utilise your website and social media?
  • Will you create and run these yourself?

Financial Review

  • How will you generate money i.e., through children signing-up? Do you have any other ways to generate income?
  • Create your key financial tables here including, your profit and loss accounts, balance sheets, break-even analysis, cash flow forecasts and business ratios

Action Plan

  • Set milestones. When do you expect to complete business plan, get funding, register with Ofsted, secure a building etc. You can get more help in achieving these milestones by enrolling on the full nursery course here: https://www.openanursery.co.uk/course/how-to-open-a-nursery-the-complete-guide-2/.  This guide will teach you everything you need to open your bursary including how to find a building, how to create your profit and loss accounts and other financial tables mentioned earlier and how to secure funding.  Enrol today for just £249.99

Appendix

  • Use this to explain some of your sales forecasts, e.g. how many sales will you need to generate the income mentioned

That is generally all that is needed to complete your nursery business plan.  You can add or omit certain sections to suit your needs.

If you need any support writing your nursery business plan, then join our Facebook Group, where you can ask questions to other members who will be able to support you. ‘Successful Early Years Owners’

Then, you’re ready for a nursery business plan review.

A review is the best first step to get your business plan ready to send. The review analyses the scope of your business, your financial data, marketing plans to inform you of what works well and where you can make improvements. This assessment is not an edit to the text, but a report detailing the business plans potential of success within the nursery market.

So, if you want to improve your business plan, and increase your chances of investment. Then…

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