The Ongoing Costs of Running a Nursery in the UK

INTRO

Have you ever thought about running your nursery in the UK?

You might be surprised to learn that behind those smiling faces and playful classrooms, the costs aren’t as overwhelming as you might think!

Intro Video

Running a nursery can sound like a dream, and guess what?

The good news the cost of running a nursery is manageable!

From hiring great staff to creating a fun learning space, every expense you make is an investment in something meaningful.

In this video, I will break down the ongoing costs of running a nursery in the UK and show you that it’s not only possible, but it can be a rewarding and affordable venture too.

If you’re thinking about starting your nursery, this video is for you.

Number 1: Staff Wages

 Let’s talk about the biggest investment for any nursery: staffing.

In the UK, nursery workers do so much more than just watch over kids.

They’re trained, qualified educators who are key to a child’s early development.

And that’s exactly why their expertise is worth every penny!

While staffing does take up a significant part of your budget—about 70-80%, according to PACEY (Professional Association for Childcare and Early Years)—it’s a smart investment in the success of your nursery.

In 2024, the national minimum wage for those aged 23 and over is £10.42 an hour, but many nurseries choose to pay a little more.

Why?

Because keeping experienced, passionate staff is essential. When you have a team that stays, it creates stability for the children, and that’s priceless.

Now, let’s imagine you have 10 full-time staff members working 40 hours a week.

Yes, that can add up to around £16,000 a month in wages, and with things like national insurance, pensions, and holiday pay, it could reach £20,000.

But your staff is the heartbeat of your nursery.

They are the ones creating that warm, engaging environment that parents trust and children thrive in.

And remember, staff wages might be your biggest cost, but they’re also your biggest asset.

When you have happy, qualified staff, you’re setting your nursery up for long-term success.

Plus, with the right planning and support, these costs are manageable!

Number 2: Rent and Utilities

Next up, let’s talk about one of the essential parts of running a nursery: rent and utilities.

Whether you rent or own, creating a safe, welcoming environment for the kids is key.

And while rent and utilities might not be the most exciting part of running a nursery, they’re manageable with the right approach.

If you’re renting, the cost depends a lot on where you are.

According to Daynurseries.co.uk, nursery rents in urban areas typically range from £30,000 to £60,000 a year.

If you’re in a bustling city like London, it might be on the higher end, but remember—more families, more opportunities! It’s all about finding the balance that works best for you.

And if you own your building, great!

You won’t have rent, but you’ll have things like mortgage payments and maintenance costs to think about.

Still, you’re investing in something that grows in value over time.

Now, utilities are part of the deal too—things like heating, water, and electricity.

On average, nurseries spend around £6,000 to £12,000 a year, depending on size and location.

But think of it this way: these costs are what keep your nursery comfortable and cozy, especially for those colder months when the kids need warmth.

And don’t forget, utilities also cover essentials like lighting for activities, hot water for hygiene, and cooking facilities if meals are part of your offering.

These expenses are all part of creating a great environment, and the best part?

With good planning and smart budgeting, they’re entirely manageable.

Rent and utilities are just the foundation for the wonderful, thriving nursery you’re building!

Number 3: Insurance and Regulations

Running a nursery means keeping children safe and secure, and that’s where insurance plays a big role.

But don’t worry—it’s not as daunting as it sounds!

Every nursery needs to be covered by a few key types of insurance to protect both the children and your business.

You’ll need public liability insurance for any accidents, employer’s liability to protect your staff, and building insurance if you own the property.

The good news is these protections give you peace of mind!

On average, insurance premiums for nurseries in the UK range between £2,000 and £5,000 a year.

And while that might seem like a lot, remember that it’s an essential investment.

One claim could cost much more than your annual premium, so this is one expense that pays off in the long run.

But that’s not all. Compliance is another big factor in running a nursery, and the UK takes childcare regulations seriously, with good reason!

Staying compliant with health and safety regulations, ensuring staff are properly trained, and keeping up with Ofsted inspections are all part of the job.

Ofsted carries out regular checks to make sure everything’s up to standard, and maintaining compliance might involve training, updating facilities, or following new regulations.

While this can come with some costs, it’s all about ensuring your nursery is the best it can be!

And really, that’s what makes parents trust you with their little ones.

So yes, insurance and compliance are necessary parts of running a nursery, but they’re also what help you create a safe, trusted, and successful space.

With the right approach, these costs are totally manageable, and they add to the value of your nursery.

Number 4: Marketing and Admin

Running a nursery is like running any business—you can’t just open your doors and expect parents to magically find you.

That’s where marketing comes in! And it’s more fun than it sounds because it’s all about sharing the amazing things your nursery has to offer.

Word-of-mouth is great, but in today’s world, digital marketing is essential to staying competitive.

From building a user-friendly website to running social media ads and printing local flyers, you can expect to spend between £1,000 to £5,000 a year on marketing.

But think of it as an investment—parents want to see reviews, pictures, and all the info about your nursery at their fingertips, and having a strong online presence helps them choose you with confidence.

Now, let’s talk admin.

Managing a nursery means handling everything from enrollments to payments and schedules.

While you can do this manually, most nurseries find that childcare management software makes life so much easier!

For around £1,000 a year or more, this software streamlines everything—from billing to attendance tracking—saving you time and ensuring that things run smoothly behind the scenes.

Marketing and admin may not be the first things that come to mind when you think about running a nursery, but they’re essential to keeping the business alive and thriving.

With the right marketing, you’ll attract new families, and with organized admin processes, you’ll keep day-to-day operations running like a well-oiled machine.

Number 5: Cash Flow – How Fees in Advance Help

Now, here’s a clever strategy that helps many nurseries stay ahead: collecting fees in advance!

It might seem like a small change, but trust me, it’s a financial lifesaver for nurseries.

Think about it—you’ve got all these monthly expenses, from staff wages to rent and supplies, and waiting until the end of the month for parents to pay can be risky.

What if someone’s late or misses a payment?

But when you ask parents to pay in advance, everything changes.

Instead of worrying about making ends meet, you’ve already got the funds sitting in your account, ready to keep things running smoothly.

No stress, no panic—just peace of mind.

This small shift allows nurseries to pay their staff on time, keep the lights on, and even invest in fun new resources for the kids.

It’s like having a safety net that ensures you’re always one step ahead.

And the best part?

It’s a huge advantage that many other businesses don’t have.

Most industries only get paid after delivering a service, but nurseries can collect upfront, giving them that extra cushion to manage cash flow with ease.

For nursery owners, this means less financial stress and more time to focus on what matters—creating the best possible environment for the children. It’s a win-win all around!

Outro

So, there you have it—the reality of running a nursery in the UK.

From paying qualified staff to keeping up with rent, equipment, and ever-changing regulations, it’s no wonder nurseries charge what they do.

But when you step back and think about it, what you’re paying for is peace of mind.

It’s about ensuring that children are in a safe, nurturing environment where they can grow and thrive.

And in the grand scheme of things, that’s priceless.

If this video gave you some helpful insights don’t forget to hit the like button, subscribe for more content, and share this video with anyone who’s thinking about starting a nursery.

Thanks for watching and I will see you in the next video!