Factors to consider when purchasing a Childcare business
Location
Accessibility is vital. The property should be convenient for parents to drop off and collect their children. The business should be close to centres of employment. Assess the competition in the area -

  • How full are adjacent nurseries ?
  • Do they have a waiting list ?
  • Does the local primary school provide a nursery class ?
Property
The property will need to comply with the accommodation standards as laid out by the Regulating bodies (see Regulations)

  • Is there potential for expansion ?
  • What is the underlying Bricks and Mortar value of the property (as this underpins your investment ) ?
Registration
How many children is the nursery registered for and which age groups ? What is the attendance / roll for Morning and Afternoon sessions.
  • Is there a waiting list ?
Staffing
Is there a qualified Manager in the business ? If you are inexperienced in the sector you will require a qualified manager. Wages should be circa 35% - 50% of turnover, although this can vary.
Fees
These can be charged by session (morning / afternoon) or by day, week or month.
Find out what rates are charged and compare against the competition in the area , is there room for an uplift in fees ?
Quality of Child Care

All day nurseries are inspected by OFSTED. Obtain a copy of the latest published inspection, this will give an excellent overview of the quality of childcare provided and is a bench mark for parents when selecting a Nursery .

Reports can be viewed on the Ofsted website at www.ofsted.gov.uk.
Profitability

The business needs to make enough profit to afford the level of borrowings you require, you can calculate this on the loan calculator or talk to your adviser who can assist you with calculating the viability