Childcare businesses including voluntary run settings

Find information to support childcare businesses, including starting and running a setting, sustainability, workforce development and marketing.

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Start a childcare business and check childcare demand

Starting a childcare business is a rewarding opportunity to support children’s development while meeting the growing demand for high-quality early years provision.

Whether you are opening a nursery, preschool or childminding service, understanding local childcare sufficiency is key to building a sustainable and impactful setting.

Planning and research can help ensure your service:

  • meets community needs
  • is financially sustainable
  • contributes to a thriving early years landscape

Childcare sufficiency

Once you have decided what type of childcare business you want to start, you need to decide where it will operate.

Consider:

  • whether you will run the business from your home or other premises
  • demand for childcare in the area
  • the childcare already available locally
  • gaps your business could fill
  • demand for particular age groups
  • how large your premises may need to be

Before opening a childcare business, it is your responsibility to research childcare sufficiency in your area. This will help you understand whether your business is likely to be viable, sustainable and able to meet local community needs.

The Early Years and Childcare service has a statutory duty under the Childcare Act 2006 to ensure there is sufficient, accessible and high-quality childcare across Nottinghamshire.

We regularly collect occupancy and vacancy data from early years and childcare providers. This helps us understand childcare availability across the county and informs our annual Childcare Sufficiency Assessment.

Use the assessment to identify areas where there may be gaps in childcare provision.

Read the Nottinghamshire Childcare Sufficiency Assessment 2025 [PDF]

Register with Ofsted

Depending on the type of provision you plan to offer and the age of the children you intend to care for, you may be required to register with Ofsted.

Read the relevant registration guidance to understand the requirements for your provision. The Ofsted pre-registration briefing explains the process and what you need to do before applying.

Plan a sustainable childcare business

Creating a sustainable childcare setting requires financial planning and regular monitoring.

You also need to keep up with parental demand for childcare and the needs of your community.

Regularly check that your income covers your costs. If it does not, identify the reasons and take action.

This applies to childcare businesses such as preschools, childminders and day nurseries.
Occupancy needs to be high enough to cover your outgoings and allow you to maintain financial reserves.

Plan your annual spending on:

  • resources
  • training
  • food
  • equipment
  • maintenance

Review your costs regularly. This could include:

  • rent or mortgage arrangements
  • utility contracts
  • internet and telephone suppliers
  • staffing arrangements during quieter periods

Fundraising and support from local businesses may also help with larger purchases or smaller resources.

Understand your income and expenditure

Knowing your estimated income will help you plan costs and ensure income covers your outgoings.

When estimating your income, consider:

  • the number of children you can accommodate
  • the ages of the children attending
  • the available floor space
  • different funding rates for different age groups
  • fees paid by families
  • income from meals or additional services

Staff salaries are likely to be one of your largest costs.

Remember to include employer contributions for:

  • Pay As You Earn tax
  • National Insurance
  • pensions

Fixed costs may include rent, mortgage payments and regular utility payments. These may change if you are on variable rates.

Other costs, such as food, will vary depending on the number of children attending.

Set money aside for:

  • unexpected costs
  • redundancy payments
  • tax
  • other contingencies

Calculate your break-even occupancy

Knowing your break-even occupancy is vital for good business planning.

Calculate:

  • the hourly fee or income for each child
  • your total business costs
  • how many occupied places you need to cover those costs

Your break-even point is the level of income needed to cover all your outgoings before making a profit.

Set and review your fees

Find out what other providers in your area offer and charge.

Your fees should reflect your local market. Make sure they are not too high or too low compared with similar providers.

Review your fees each year and tell parents during induction that fees may increase.

When reviewing your fees, consider:

  • increases to the minimum wage
  • changes in the cost of living
  • staff-to-child ratios
  • affordability for parents
  • the amount needed to cover your costs

Work out the minimum fee increase needed to cover your costs while remaining affordable for families.

This can help balance your cash flow and retain families who need a childcare place.

Monitor your finances

Monitor your income and expenditure so you can respond quickly if your financial position changes.

Regular monitoring can help you:

  • identify falling occupancy
  • understand where costs are increasing
  • find costs that could be reduced
  • decide whether to advertise available places
  • address financial difficulties before they escalate

Monitor your finances monthly and use a cash-flow forecast to compare expected income and expenditure.

Your cash-flow forecast can show where you are spending the most and give you time to consider whether costs can be reduced.

Plan for future changes

Keep up to date with government policy and changes in the early years sector.

Useful sources include:

  • Ofsted
  • Foundation Years
  • National Day Nurseries Association (NDNA)
  • Early Years Alliance
  • Coram PACEY
  • Early Years and Childcare service bulletins

Keeping track of your cash flow and understanding your break-even point will help you decide whether you need to:

  • advertise available places
  • generate more income
  • make savings
  • change your delivery model

Tell families about your business and any changes to your offer so they understand what is available.

Responding to changes in demand

Parents’ working patterns and childcare needs change over time.

Understand what your community needs and be prepared to adapt your provision. This can help your business remain sustainable and allow families to choose childcare that meets their needs.

Responding to policy changes

Government policy, funded childcare entitlements and funding rates may change.

Consider how changes could affect:

  • your delivery model
  • the age groups you support
  • room sizes and how rooms are used
  • the number of funded children you can accommodate
  • staffing requirements
  • business income and expenditure

Planning ahead will help you understand whether you need more staff or changes to your premises, delivery model or budget.

Recruit, retain and develop your workforce

Recruitment, retention, training and workforce development contribute to the sustainability and success of your childcare business.

Recruitment

Find guidance on:

  • advertising vacancies
  • apprenticeships
  • safer recruitment
  • shortlisting
  • references
  • interviews
  • employment checks
  • contracts and staff records

Recruit staff for your childcare setting

Retain and develop your team

Find guidance on:

  • induction and probation
  • supervision and appraisal
  • workplace culture and wellbeing
  • rewards and recognition
  • continuing professional development (CPD)

Retain and develop your childcare team

Training

Setting a budget for staff training can help you:

  • monitor spending on mandatory training
  • support continuing professional development
  • keep staff motivated and develop their skills
  • improve staff confidence when working with children and families
  • retain existing staff and reduce the need for new DBS checks and induction training

More about early years and school-age childcare training for practitioners

Research your market and promote your childcare business

Marketing helps you understand and anticipate the needs of families. It also helps you respond to changes in demand, compete successfully and support the long-term sustainability of your business.

Early years and childcare providers are a unique type of business. Parents and carers are choosing a setting to care for and educate their children.

Involving families can help you develop a service that meets their needs and those of the local community.

Marketing is about more than flyers and posters. Think about:

  • what you want your business to achieve
  • how you want families to view your setting
  • what makes your provision different
  • how you communicate with families

Research your market and develop your offer

Find guidance on:

  • local demand
  • competitor activity
  • family feedback
  • your childcare offer
  • your unique selling point (USP)
  • value for money

Research your market and develop your childcare offer

Marketing and advertising

Find guidance on:

  • Your Notts Directory
  • word-of-mouth recommendations
  • open days
  • virtual tours
  • websites and social media
  • promoting your setting

Market and promote your childcare setting

Find support for your type of business

Each childcare business will differ in size, structure and the needs of families.

You may already have business experience that you can apply when running an early years business. Specialist organisations also provide support for different types of childcare setting.

Childminders

Coram PACEY provides business resources for childminders, including support with separating household and business costs.

Business resources for childminders (Coram PACEY)

Preschools and voluntary-run settings

Early Years Alliance provides business management support for preschools and committee-run settings.

Business management support (Early Years Alliance)

Day nurseries

The National Day Nurseries Association provides business and sustainability support for day nurseries.

Business support for nurseries (NDNA)