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Setting up a new childcare business

Potential Childcare Providers - Please note that if you are considering opening a new childcare setting within the London Borough of Redbridge, sufficiency in the West Locality is very high and existing childcare settings across Redbridge are reporting a high volume of vacancies.

If you are thinking about setting up a new playwork, early education childcare business or organisation then Redbridge Early Years and Childcare Service is able to provide information to support you.

Who we are

Redbridge Early Years and Childcare Service consists of different teams who support providers to raise quality through advice and training and to offer practical guidance on business issues so that you are able to manage a sustainable, high quality childcare business or organisation that meets the needs of the local community.

Where can I access support?

In order to assist when you are considering opening a new childcare business, such as a pre-school or day nursery, we have developed a range of information. This provides guidance on areas of business management that should prove useful to you.

What you need to consider

Before making a firm commitment you should conduct planning and research on the following (please click on the links below to access the relevant information):


Market research

Market research is an assessment of the demand for childcare in your intended locality and will be a major factor in the likely success of your new business. You can download guidance on market research and read copies of the latest Childcare Sufficiency Assessments showing current supply and demand for childcare and early education in Redbridge.

Premises

The number of children you are planning to look after will be partly determined by the size of your premises, as you need to have sufficient space for children to play safely in an indoor and outdoor environment. Please refer to section 3.57 of the Early Years Foundation Stage (EYFS) for further specifications.

Playgroups and pre-schools are more likely to require hiring premises, such as a hall. Redbridge Council may be able to provide details of suitable venues available for hire along with their costs and conditions. You may also wish to research church halls and community centres in your chosen location for availability. Other venues may be found within the Venues for hire section on this website.

If you're thinking about buying a property for business use then please contact a local estate agency who will have details of commercial properties. There may also be opportunities to buy an established business and these may be advertised in periodicals such as Nursery World magazine.

If you are considering extending or changing a residential property for business use please contact the Planning Office at Redbridge council. Please also note that planning decisions override any Ofsted registration request and therefore if a planning application is rejected you will be unable to extend or change the property usage.

Basic resources for setting up a nursery

Every nursery setting should have sufficient resources for the number of children that it is registered for. We have provided a list of the basic resources (add link) which gives you an idea of the minimum requirements for every nursery setting. It also provides information on both indoor and outdoor materials and shows different resources required for different age groups. A copy can be viewed here.

Start up costs

You are likely to incur a number of costs before you are ready to open your new business such as premises, recruiting staff and marketing.  To ensure you are fully prepared to cover this financial outlay please see the pages on making the most of your money and the support offered through the Work Redbridge programme.

Childcare Business Grant Scheme

The Childcare Business Grants Scheme is funded by the Department for Education and is open to newly registered childminders or childcare providers on domestic premises or a Childminder Agency operating in England and plan to offer the 30 hours funded childcare entitlement for 3 and 4 year olds.

There is a fixed amount of funding available

A £500 grant for an early years childminder or childcare provider on domestic premises.

A £1,000 grant for an early years childminder or childcare provider on domestic premises of children with special educational needs and disability (SEN/D)

A £1,000 grant for a Childminder Agency (CMA)

To apply please visit http://www.childcarebusinessgrants.dcms.gov.uk.

Business planning

It is recommended that you complete a business plan that sets out the aims and objectives of the business and should also include forecasted budgets and cash flow projections. When setting up a new business it is also important to think about the structure of your organisation, your business's legal status and to understand the legal responsibilities involved in operating a business.

It is essential to not only plan your finances before starting up but also to monitor the money coming in and out of your accounts once you are running and highlight the peaks and troughs in your funding. The most effective way to achieve this is to by setting a budget and using informed estimates.

Further information on business planning and financial management can be found using the links below. Please ensure you review this information before proceeding:

Further advice and support

The Business Support Helpline is a national support service for those starting or running a business.

Work Redbridge for Business are able to offer support and training to new and existing businesses. This includes the support of other organisations who have expertise in areas such as recruitment, staff training, marketing, developing your website or financial support.

You can find out more about the other support and services we offer once your business has been registered by Ofsted.

Childcare Providers Business Assessment Support Tool

Redbridge Early Years has developed a business self assessment tool which covers twelve areas of business practice and which informs of strengths and gaps in existing businesses.  This tool may also prove to be useful in ensuring that all aspects have been considered before proceeding with opening of your prospective business.  In order to access this toolkit please contact Janet South, Childcare Liaison Officeron 020 8708 0130 who can provide the link or email this to you.

The role of Ofsted

You will need to decide on the age range of children you wish to work with, how many hours and days per week you plan to be open and whether this is limited to term time or all year round. Ofsted recognises three types of childcare these are:

  • Childcare on non-domestic premises - childcare on premises that are not being used as a home, for example a playgroup, day nursery or pre-school, a creche at a gym or shopping centre or an after school and breakfast club.
  • Childcare on domestic premises - four or more people looking after children on domestic premises including childminders and their assistants.
  • Childminders - individuals looking after children on domestic premises which is not the home of any of the individuals being cared for.

Childcare on a non-Domestic Premises

If you're interested in childcare on non-domestic premises contact Ofsted on telephone number 0300 123 1231

Registering as a Childminder

If you're interested in becoming a childminder, once you have read this information please contact the Redbridge Families Information Service FiND. 

Age of Children

If you are planning on looking after children between the ages of birth and five years old you'll need to follow the Early Years Foundation Stage (EYFS) framework. The EYFS sets out the requirements for the welfare, education and learning for this age group.

Get your free copy of the EYFS pack online or call the Department for Education's publications helpline on Tel: 08456 022260.

Registering your Childcare Business

Childcare businesses would usually be required to register with Ofsted. There are two registers, the Early Years Register and the Childcare Register. The Childcare register consists of two parts, the Compulsory Childcare Register and the Voluntary Childcare Register.

In some circumstances you may not need to register your business.

For advice and a set of the correct application forms call Ofsted on Tel: 0300 123 1231

Free Early Education Entitlement (FEEE)

If you will be caring for children aged two, three and four years old you may also want to think about whether you want to offer Free Early Education Entitlement Funding

From September 2014 local authorities have a duty to secure early education for 40% of all two year olds. All children who meet the eligibility criteria are entitled to receive 570 hours a year over no fewer than 38 weeks of the year from the term after they turn two.  You can download further guidance here.

The FEEE entitles every three and four year old to a free part-time early education place.

In order to receive funding for 2, 3 & 4 year olds, you will need to be registered with Ofsted and enter into a contract with the London Borough of Redbridge (LBR) which outlines the core principles of the National Code of Practice (September 2014). Please note that providers who open part way through the term (even before the headcount date) will not be considered for the free entitlement until the following term. Please contact Janet South Childcare Liaison Officer on 0208 708 0130 for further information.

Marketing

Effective marketing is key to the success of any business and you should therefore consider some of the examples on the marketing link. 

Staff

The number of staff you will need to employ is dependent upon the age and numbers of children you are providing childcare for. For more information please refer to the latest guidance concerning staff ratios (EYFS Safeguarding and Welfare requirements point 3.28 to 3.37)

You will also need to make sure staff and volunteers have the appropriate DBS checks (Disclosure and Barring Service, previously known as Criminal Records Bureau checks).

For assistance with recruitment please refer to the information on the FiND recruitment and retention pages

Pension Auto Enrolment

Workplace pensions law has changed. Every employer has new legal duties to help their workers in the UK save for retirement. You must automatically enrol certain workers into a qualifying workplace pension scheme and make contributions towards it.

What you'll need to do now is to make sure you're compliant with your new duties.   The Pensions Regulator offer help and information to support you with your new duties

For the latest information on employment law reforms please contact ACAS

Prospective Provider Checklist

We have created a checklist for new providers from the EYFS Section 3 Safeguarding and Welfare requirements 2014 which forms part of the Ofsted registration.

Training

Redbridge Early Years offers a comprehensive  Training programme to existing registered childcare providers in Redbridge.

If you wish to access training before registration we have compiled a list of external training organisations who offer a range of courses. 

Useful contacts

Click on the links below to go to their website.

Footnote: Some information has been sourced with the kind permission of Surrey County Council 2013.

Multi Agency Resource Centre Online (MARCO)

This information is intended solely for the use of practitioners within the children and young people's workforce in Redbridge. Please do not share information within this section with others.
For further information on this service please register or sign in. This service is only available to practitioners working with families in Redbridge.
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