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earlyyears.teachwire.net
Expanding your nursery business requires a clear
plan and a steady hand, says
Sarah Steel...
or every single-site nursery
operator who is happy
running one setting and
has no ideas of expansion,
there is another thinking,
‘What next?’ If you fall into the second
category, your desire to grow might be
part of a long-held ambition to build a
brand, or a pragmatic response to current
circumstances – maybe your first site is full
and you have additional demand that you
can’t fulfil without opening a second site, for
example. But whatever the reason, there are
pros and cons to expanding that you need
to consider.
Should I stay or
should I grow?
Over the last 15 years my nursery group,
The Old Station, has been from one site all
the way up to 16, and is now back down
to six. During that time, we have bought
existing settings, opened new ones and
taken term-time only nurseries and made
them into full day care settings. In each case
we have faced different challenges, so it’s
important operators think carefully about
what they are letting themselves in for.
CHOOSE YOUR SITE
You have the option of acquiring an existing
nursery from another provider who wishes
to exit the sector. Doing so usually means
you will pay a premium price, as the nursery
will already be trading. The advantage of this
approach is that you will get instant income
– but you also get the reputation the provider
you are replacing has earned, which may
not be a good thing. Do your homework
carefully and make sure you really know
what you are buying.
Alternatively, you can look for an empty
premises to refurbish/convert to make
another nursery. This is cheaper, as you are
not paying for goodwill. However, you will
start with no customers (unless you already
have a waiting list at your existing setting and
it is close by). Allow a budget for marketing
and for gradual build up of numbers, and
offset this against your costs.
How big?
Whilst we have some smaller sites, with
only 30 childcare places, generally a
registration of at least 60 children is more
financially viable, unless you are
looking at a site with very low
rent and overheads. Be cautious
of buying a small going concern
that is owner-run, as by the time
you have added it to your group and
F
put in place a manager, you may find that
profits are minimal.
Consider costs
Think about the detail of your local
market and compare this with new sites
you may be contemplating. Sometimes
moving only a few miles away can
mean different rental rates and that you
can charge different fee rates – don’t
automatically assume it will be the same.
Don’t stretch yourself
I strongly recommend considering how
far your second or subsequent sites are
from your first. As your group grows,
you will be spending time travelling
between settings, so you need to decide
what is reasonable for you and your staff
to manage. Also, if your sites are close
together, you will be able to share staff
and resources; if you are too far away this
becomes more difficult.
MANAGING QUALITY
One of the biggest challenges with growth
is managing quality. When you have one
site, you can run it exactly as you want to
and be there all the time. As soon as you
have two sites or more, that changes. Our
second site was a 40-minute drive from
the first, and I remember well receiving a
THINK
ABOUT
D
Why do you want to expand?
D
Do you have the necessary
skills to manage a larger
business? If not who will
help you?
D
How will you choose new
sites/locations?
D
How will you fund expansion?
(E.g. remortgage your
existing property/use bank
finance/use investors.)
D
How will you manage quality?
D
Do you have people already
in your business who support
your plans for expansion?
