Setting up a new early years and childcare business

Advice on setting up a new early years and childcare business in Brighton & Hove.

Overview

Developing a high-quality, sustainable childcare provision is not a quick process however we hope this useful information and advice will set you up to run a successful new childcare business in Brighton & Hove. 

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, like a village hall or school premises, for setting up a nursery, pre-school, out-of-school provision , etc.

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 the children's ages and is clearly stated in Early Years Foundation Stage (EYFS) page 27 section 3.57.

When considering your premises, consider the space required for:

  • storage of equipment and resources
  • sufficient toilets and washbasins for children
  • access to a safe outdoor play area
  • adequate parking for staff and parents
  • good public transport links

If you plan to prepare and serve food on the premises see information from the Food Standards Agency.

If you need to carry out necessary building work contact the Local Authority Planning Team. You should ensure your premises meet fire regulations  

If you're looking for property in Brighton & Hove to open up a new business or looking to expand your early years business, visit Avison Young. This is where properties available to rent will be publicised.

Market research

It's essential to research your market to gain a thorough understanding and knowledge of the marketplace. Market research generally highlights gaps in the market that your new childcare business could fill.

Analyse the competition

Go to the Family Service Directory to see all established childcare businesses in Brighton & Hove. Look at:    

  • their opening hours – are they open for 52 weeks in the year?
  • the age groups they cater for
  • the services and activities they provide
  • the facilities they offer, for example, an outdoor play area
  • the fees they charge
  • the type of meals and snacks they offer
  • whether they offer both full and part-time places
  • if they're flexible over dropping off and collection times if parents need it
  • whether they offer local authority-funded places for 2, 3 and 4-year-olds

Establish what your customers want

Talk to as many parents as possible and find out:

  • what would they like a new childcare business to provide (discuss opening hours, flexibility and activities)
  • if there are any gaps in the existing childcare available that you could fill such as after-school clubs
  • whether they're satisfied with current childcare options in the area – if not, what specifically are they unhappy with
  • what they consider would be a reasonable fee to charge for the service they want

Look at demand in the city

This Childcare Sufficiency Assessment gives information based on the demographics of the city.

Look closely at the type of people who live and work in the area where you propose to open your new childcare business. For example:

  • are there families with preschool or school-age children?
  • do both parents work?
  • are there single-parent families that would welcome an opportunity 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 a large supermarket close by as parents may work unsociable hours and require childcare late at night or early in the morning?

Types of childcare  

It's important to establish the 'type' of childcare you will provide. This is important for registering with Ofsted.

Ofsted recognises 4 types of childcare:

  • childcare on non-domestic premises  - this means 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
    • breakfast club
  • childcare on domestic premises - this means 4 or more people looking after children on domestic premises including childminders and assistants
  • childminders - this means individuals looking after children on domestic premises which is not the home of any children being cared for, find out how to become a registered childminder in Brighton & Hove  
  • home childcarer - this means childcare at the home of one or more of the children being cared for, for example, a nanny or au pair

It's important to know:

  • what type of childcare will be provided
  • what will be offered
  • how many hours and days per week you will be open for

The Ofsted registers

It's important to know the 'age range' of the children you want to provide care for. Ofsted have different registers and requirements depending on the ages of the children you will be caring for.

The Ofsted registers are:

  • the Early Years Register - to provide care only for children aged 5 and under
  • the Childcare Register - to provide care only for children aged 5 to 7 years
  • both registers to provide care for children of any age under 8
  • the Voluntary part of the Childcare Register - to provide care for children aged 8 years and above 

Registration for the age group 8 years and above is not compulsory. If you join, you will get a certificate and the parents of the children you care for may be able to access other types of financial support. 

Legal business structure

It's important to know what type of legal business structure you will be. For example, you could:

Your agreed legal structure will govern who is legally responsible for the activities of your organisation. Each legal structure comes with very different legal responsibilities. This information will be required:

  • to register with Ofsted
  • when employing staff
  • for administrative purposes such as banking

The Ofsted registration process  

You must register with Ofsted if you want to be paid to look after children aged under 8 for more than 2 hours a day in England.

The registration process can take anywhere between 3 months and 12 months depending on your project.

The Ofsted Guide to Registration Handbook contains everything you need to know about applying to become a registered early years or childcare provider in England. There is an Ofsted pre-registration briefing which you may also find useful.

The Ofsted Education Inspection Framework details what the inspector will look for when visiting you and your premises. The Education Inspection Framework (EIF) Guidance gives specific details for Early Years.

If you provide care for children aged under 5 years, you'll need to follow the Early Years Foundation Stage (EYFS) Framework requirements and demonstrate a good knowledge of this at the time of registration. Having arrangements in place to support children with special educational needs (SEN) or disabilities is essential. More details about this can be found in paragraph 3.67 of the framework.

Start-up costs

When planning a new childcare business, know your costs.

Costs include:

  • startup costs - these are the initial costs of setting up the business which can include:
    • the purchase and lease of premises
    • building costs
    • equipment
    • recruitment costs
    • marketing costs
  • running costs - these are the everyday costs of running the business which can include:
    • staffing
    • gas
    • electricity
    • insurance
    • disposable resources (such as creative materials)
    • food and drink 

Business planning and financial management

To demonstrate your business ideas will work, you need a business plan. This plan should include your budget and cash flow forecasts. See our business success for childcare providers' webpage for further support.

The Department for Education (DfE) has produced publications to support early years providers to run sustainable businesses. The DfE have spoken to providers about the challenges their businesses have faced and the ideas and schemes they have put in place to be sustainable. Learn more about supporting early years providers to run sustainable businesses: summary.

When setting up a new business, it's important to know your obligations regarding data protection. The Information Commissioners Office (ICO) provides information on how to comply with required legislation.

Funding for early years and childcare businesses

In Brighton & Hove, early years providers receive Early Years Free Entitlement (EYFE) Funding for 2, 3 and 4-year-olds.

From September 2024, this will extend to eligible children from the term after they are 9 months old.

You can also access the:

  • early years pupil premium (EYPP)
  • disability access fund (DAF)
  • special educational needs (SEN) inclusion fund

Read guidance on sources of income for early years providers.

Recruiting suitable people

When recruiting staff you need to make sure that you are getting the best people for the job so that you can provide the highest quality of care possible.

See our page on recruiting and managing staff for information on safer recruitment support and ensure you comply with all necessary employment laws and health and safety laws and regulations.

There are also:

Branding and marketing

To enable successful and effective marketing, it's vital to have a business name, branding logo/image and website.

To register a company image and brand logo go to The UK Copyright Service.