To buy a nursery?

[raininginspringtime]

There's one for sale. I could (just) afford it.

Here are the problems:

I have an educational background although not in early years.
I haven't ever owned a business before.
It would take ALL my money!

Here are some solutions such as they are:

I own my apartment outright (lucky I know)
Do I need to be physically present at all times? I was wondering about possibly doing a day or two of supply teaching while things get set up.

I can't think of any other relevant info but I'm sure there is some.

[wowbutter]

If you can 'just' afford the nursery, can you afford the insurances?
The interviewing process will be quite intense, plus paying for background checks for staff, uniforms and then NI, pensions etc..
And that is all before you get license to even open.

[Misswrite89]

Do you have a sound business plan in place?

[raininginspringtime]

Thanks wow it is an existing nursery, recently closed (not sure why, would obviously look carefully into that.)

re insurances I'd need to look carefully into this and I will happily confess to being a complete amateur - though ready and willing and happy to learn.

[raininginspringtime]

No not yet Misswrite I literally have just been thinking of this over the last 24 hours. Anything anyone can tell me will be helpful.

[DillyDingDillyDong]

Where about are you? You may be able to contact your local authority for a bit more advice.

[RudeElf]

From what i have read recently, nurseries are facing lots of issues with the early years funding. Many are breaking the new rules to get round it but many are struggling to cover the shortfall.

Be very careful. I'm not sure its the cash cow it once was.

[raininginspringtime]

Thanks Dilly, I am off work next week so will do so. I am in Cheshire.

[raininginspringtime]

I've heard similar Rude, although it might be possible to work around this a bit. I don't know though!

[RudeElf]

Certainly do lots of research into a) why the nursery closed and B) how they and other local nurseries were/are managing their early years funding.

[DillyDingDillyDong]

I'm in Knowsley so not too far! Have quite a bit of early years back ground so if you want any advice feel free to message me

[8angle]

you need to do a business plan, things you need to know:

1. what price do other nursery's charge. how much can you charge
   
2. how many children can you take?
   

3.how much demand is there for nursery places in the local area.

with that info you should be able to roughly work out what revenues you can generate.

then costs:
4: how many staff do you need - what is the going pay rate (this will obliviously have a bearing on whether you need to work there full time.

1. what are the business rates
   
2. other costs - electric, heating etc.
   
3. do you need to buy new equipment?
   
4. how ill you finance this - do you have to borrow money to do it - how much will this cost.
   

Then you have the admin costs of running a business, filing accounts, registration etc.

None of this is insurmountable, but you do need to give it very careful consideration.

In London the people who own nurseries seem to make an absolute killing - YANBU to consider it!

good luck!

[ForeverLivingMyArse]

Also worth speaking to your local authority about partnership. Our a recently stopped working with any new nurseries. This meant that they were registered and inspected etc but 3 and 4 year olds have to pay full fees.

[raininginspringtime]

You're a dilly I will do :)

You too 8angle, I am very much from a literature background but I need a change!

[Lonecatwithkitten]

Nursery margins were very tight prior to the advent of the living wage. They are likely to be non existing now and when they have to start running their workplace pension they are going to get worse.
So the nursery has closed the staff will have been made redundant and the children will have found new placements.
In my area 'ordinary' nurseries are really struggling, only nurseries with something truly special are going well (e.g 57 acres of grounds and very forest school every single child).

[BlueJug]

Look at their books.
Income v outgoings
Fixed costs - heat, light, etc
The lease - this will be a biggie as you might be tied in for many years and it might come with heavy obligations. Or it might not. Check it out.

Sounds like a good idea though. It could be a great little business

[raininginspringtime]

Thanks blue

Lonecat it absolutely wouldn't be something I jumped into headfirst however we are a busy area and lots of demand for school places so not sure really.

Dilly I've tried to PM you but it's not working?

[dontdoitchicken]

Don't do it !!

Here are the reasons

1- you just have the money which means you don't have enough to pay staff the living wage, training costs, wear and tear on equipment costs,running costs,deficit costs on eyee,insurance and other costs

2- you have no idea about the sheer amount of paperwork for early years and do not know how to ensure it is run effectively and to do this means regular training and see above about costs

3- Eyee (early years education entitlement) is changing and no one knows how it is going to effect us in the industry

4-The cost again I've put it twice because however much you think it costs to run a nursery double it !!

5- Your basically inheriting a team of nursery workers if they are still attached and
If not you need to hire some and good nursery workers are hard to find and also expensive and you don't know what to look for if you've never worked in early years

6- Being a ofsted registered person is a pain and so much paperwork

7- Have I mentioned the paperwork because let me talk about it again it's a huge pile of SEF and ofsted paperwork plus planning and tracking different cohorts of children and pupil premium hoops and ensuring you always stay good or outstanding or you loose your ability to deliver funding which you need to fill the spaces but doesn't actually cover costs

And lastly if the last owners failed and I suspect had more knowledge about early years than you do how do you expect to succeed

[raininginspringtime]

Dont, I meant to buy the actual nursery, outright - not sure if most people just have the cash to buy businesses outright. I could buy a cheaper one I guess.

I know a teensy little bit about OFSTED and paperwork

I don't know yet if it failed or if the previous owners moved or emigrated or what - just don't know.

[dontdoitchicken]

It doesn't matter if your buying it outright there are still costs and so much money to sink into it seriously you have to double your budget.

Unless you've worked in early years you don't know ofsted I'm afraid I don't mean to be rude but the hoops to jump through are more than a school has to and we have less notice and an expectation to do more

[raininginspringtime]

I'm sure but I'm willing to learn that.

WTR buying the business, of course there are costs after buying the business itself which was why I asked about possibly continue to work even part time in the early days at least.

[APlaceOnTheCouch]

tbh I think YABU. I mean that kindly. I help businesses with business plans and you haven't taken any of the important issues into account. Nurseries have lots of regulations and employing staff has legal and financial implications.

You would need to look at the condition of the building as well as the lease. Most commercial leases mean you are responsible for maintenance so the initial state of repair of the building is very important.

You would need quite a lot of savings to carry you over until it started making profit, add to that your marketing, advertising and training budget, and it soon mounts up.

My friend runs a nursery and yy it is profitable but it's hard work. It wouldn't have succeeded if she had started it with the idea she would only be there a few days a week. And she would be amongst the first to admit that margins are tighter now than they've ever been because of changing employment and nursery legislation.

[Rezolution123]

My gut instinct says NO.
The main feeling I have is one you mention yourself: you have never owned a business.
This could go wrong and you have no safety net. Never put all your eggs in one basket (or nursery in your case)

[APlaceOnTheCouch]

Oops I type so slowly that Dont has already said it all!

[raininginspringtime]

Thanks.

That's fair enough APlace but in fairness it's early days - asking on here is part of important issues and just because I haven't thought about them yet doesn't mean I won't, if you see what I mean.

It's not I want to be there only a few days a week, more that I'd want to pump as much money in as possible for the aforementioned reasons.

Or get a business loan possibly.

[8angle]

On the upfront costs - if by buying it outright you mean with no debt then you can definitely get a business loan to cover the initial working capital needs (i.e. the costs you have to pay before you get the cash from the clients).

The big thing is demand - in London some people are paying over £5k per term for a nursery place and this is upfront, it all depends on the catchment area and the demand.

Don't be put off for no reason, but don't jump into anything without doing as much research as you can. Any investment in any business is always a risk, at some stage you have to take a leap of faith - it is just making that leap as small as possible by having as much knowledge as possible.