This is a summary of the key aspects to consider when starting a Daycare business;
What sort of business do you want to operate?
A Daycare business could be a day nursery, pre-school or before and after school club. These are known as either childcare on non-domestic premises, which is childcare operating from premises that are not used for domestic purposes (such as a specific building for the childcare provision) or childcare on domestic premises, where four or more people are looking after children on domestic premises, this includes childminders and their assistants (often in somebody's home).
It is a legal requirement that a Daycare business must register with the Office for Standards in Education, Children's Services and Skills (OFSTED) and comply with the Early Years Foundation Stage (EYFS) statutory requirements. OFSTED is an independent, non-ministerial government department, which has a responsibility to regulate and inspect services which care for children and those providing education and skills for learners.
To help you decide what type of Daycare business you want to operate and its associated legal requirements you can refer to the OFSTED Guide to Registration
Where do you want to do it?
The location has to be right and the premises have to be suitable in order for your business to be a success.
Market Research and your chosen location
It is important to carry out thorough research around the area you are considering opening your business. This is so that you have a good understanding and knowledge of the current local childcare supply and demand, occupancy and uptake, demand of local parents, what sort of care they want, what they are prepared to pay and how your business would offer something different to your competition. More information on undertaking market research and feasibility studies can be found in the Business Resource Toolkit. You can obtain statistical data to support your market research from theChildcare Sufficiency Assessment which the local authority has a duty to produce.
Premises
OFSTED dictate minimum size requirements for Daycare premises and the sizes appropriate to the indoor play area for full Daycare provision is given as:
· Under 2 year olds - 3.5 square metres per child
· 2 year olds - 2.5 square metres per child
· 3+ year olds - 2.3 square metres per child
Premises need to be fit for purpose, safe, secure and accessible for both adults and children.
Are your plans affordable and sustainable?
Whether you are looking to buy an existing business or set up a new business, you need to plan how you are going to finance the business. Good financial management is essential, not only before you commence your business, but throughout its operation.
Establishing how much you will need to start your business, including the purchase of equipment and forecasting monthly and annual income and expenditure to demonstrate viability and sustainability will be a key part of your business plan. TheBusiness Resource Toolkit will provide you a variety of background information, tools and techniques to support you with basic business and financial planning but you may also find it beneficial to attend one of the courses provided by the local business agencies listed on these pages.
What are the Statutory Duties?
Registration
You must register on the OFSTED Early Years Register if you intend to provide care at any time (day or night) for the early years age group and you intend to look after at least one individual child on the premises for a period of more than two hours in any one day.
The registration system for childcare on domestic and non-domestic premises required by the Childcare Act 2006 uses the concept of the registered person which refers to both individuals and organisations. The registered person has overall responsibility for the provision of childcare and is legally responsible for ensuring compliance with the requirements of the Early Years Register or Childcare Register, regulations and any imposed conditions of registration. OFSTED may have to take action against a registered person who fails to meet these requirements as they are set out in law. This can include taking action against individual members of an organisation, such as the committee members.
Early Years Foundation Stage (EYFS)
The EYFS 2016 aims to help young children achieve their full potential. It;
· Places a duty on providers to comply with welfare and learning and development requirements
· Is mandatory for all schools and OFSTED registered early years providers, who care for children aged from birth to 31 August following their fifth birthday.
More information can be found on the Early Years Foundation Stage Website
Staffing Structures
The Nominated Person: If you are planning to start up a business with someone else or a group of other people, you should nominate a person to represent the organisation as a key contact for OFSTED. The nominated person will be interviewed on behalf of the organisation during the registration process.
The Manager: You will need to appoint someone who will have actual day-to-day responsibility for the provision. This person should have a Level Three Qualification and at least two years experience working in an Early Years Setting. The Provider is responsible for obtaining the Manager's Criminal Records Disclosure, OFSTED Registration will not be granted until an identified suitable Manager is in place. A Deputy will also need to be appointed to deputise in the Manager's absence.
Childcare Staff: OFSTED dictate minimum requirements for the number of staff required depending on the number and ages of children to be cared for. The ratios appropriate to full day care are as follows;
· Under 2 year olds - 1 member of staff for every 3 children
· 2 year olds - 1 member of staff for every 4 children
· 3+ year olds - 1 member of staff for every 8 children
At least 50% of these staff must be qualified to at least NVQ Level 2 in Childcare and there must always be a minimum of 2 staff on duty at any one time in each room.
Policies
Policies and procedures help you to ensure you and your staff team successfully to meet the EYFS 2017 statutory framework. These documents inform parents and staff how your business plans to operate and helps to ensure the aims and objectives of the business are achieved. The statutory framework for the EYFS 2016 informs you of the crucial policies and procedures required by OFSTED that you must adhere to.
Ready to go?
Once you have considered all the information on this page and its associated links, and you have covered all areas on the Starting a Daycare Business Checklist, please contact the local authority for further support advice and guidance. You will be appointed a Childcare Support Worker who will provide you with the advice, support and guidance you require to help you ensure your business is ready for your OFSTED registration.
You can contact the Early Years Team at Also contact the Families Information Service on 0800 4584114 and they will log your enquiry.
Updated September 2017