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Starting an early years business

Providing high-quality care and education for young children is enormously rewarding. It provides a much-needed service for local communities and, most importantly, makes a huge difference to the development and well-being of children.
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Whatever your role in early years education, the Alliance can help you on your journey. Not a member? Find out more about joining today.

Research the need

Before starting up your early years business, it’s important to assess what the demand for a new early years provision is likely to be.

You will need to take various steps such as:

  • Creating opportunities to talk to parents and carers informally: for instance, in local baby and toddler groups, libraries or through surveys.

  • Mapping out care and education already available in the area.  

  • Finding out what’s already available through early years audits carried out by every local authority.

  • Researching the use of early years provision and the views and experiences of parents and carers through the Childcare and Early Years Survey of Parents. 

  • Contacting your local Family Information Service for lists of other providers in the area with their hours of operation.

Assess your financial viability

Delivering the best possible care and education for children and families is a vital part of early years provision — but so too is operating as an efficient and sustainable business. It is important to create a forecast budget which takes into account income and expenditure and make sure you know what your break-even point is.  

Fees and funding for occupancy will be your biggest income. You can register with your local authority to claim funding to provide government-funded places for children aged nine months to four years. Further information on the offers, and other government schemes such as tax-free childcare, is available on our Financial management and funding page, or via the Childcare Choices website.

Further information: The Alliance’s Budget Toolkit and one-to-one support can help you to develop your forecast budget.   

Register with Ofsted

If you will be looking after children under the age of eight years for more than two hours a day you will need to register with The Office for Standards in Education, Children’s Services and Skills (Ofsted). If you are a childminding professional, you can choose either to register with Ofsted or with a Childminder Agency. Ofsted inspects and regulates the quality and standards of care and education in childcare and early education provision.

Other things to consider

Want to find out more?

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Alliance mini-guide: Setting up an early years provision (member-only)
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Alliance Business Blocks: Comprehensive business support for your early years setting

Starting a baby and toddler group?

The Statutory Framework for the Early Years Foundation Stage is a mandatory framework for all Ofsted registered early years providers caring for children from birth to five years. It was developed to ensure that all early years services provide a safe and secure environment for children and support children’s learning through carefully-planned play activities that are fun and appropriate to their needs.

Early years provision may be provided on domestic premises (for example, in the home of a childminding professional) or on non-domestic premises (such as a pre-school in a community hall, a nursery on a school site or a childminder on non-domestic premises). The premises that you operate from must comply with the EYFS requirements. When choosing premises, you will also need to consider whether the building is in a good state of repair, if it is safe and secure for the children, whether appropriate toilet and kitchen facilities are available, whether the premises are easy for families to get to and whether they are accessible to children and adults with disabilities.

The safety of the children and adults in the provision is a central theme throughout the EYFS. You will have a duty to develop effective procedures for ensuring that the provision is secure and that any risks are identified and managed through regular risk assessments; safeguarding and protecting children from harm or abuse; maintaining high standards of hygiene; regularly checking fire procedures and equipment.

Under the General Data Protection Regulation (GDPR), you will need to put systems in place to ensure any personal data you collect is securely processed, stored and destroyed. You will also need to issue those whose personal data you collect, such as parents and carers, employees and volunteers with a privacy notice.

Early years providers must have adequate insurance cover. Some forms of insurance are required by law or for Ofsted registration, such as public liability insurance and employers’ liability insurance (where applicable). Others are not legally required but are still necessary because they provide protection for the provision and for those that use and are responsible for it.

Early Years Alliance members can benefit from accessing specialist insurance underwritten by RSA. Further information on our insurance page.

Every provider is required to have and implement a safeguarding children policy and procedures which follows the guidance and procedures of the local safeguarding partners.  Safeguarding policies and procedures should also address the needs of young people and vulnerable adults who have contact with the setting.

As an employer, you will need to take steps to ensure that your employees, job applicants, service users and volunteers are treated in a fair and consistent manner. Everyone has certain legal rights, including the right not to be discriminated or harassed on the grounds of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion and belief, or sex.

For the benefit of all staff and families, equality and inclusion must be embraced throughout your provision. The Equality Act requires childcare providers to ensure their policies, procedures and practices promote equality of opportunity and prevent discrimination towards children and adults in the provision.

Providers also have a duty to regard the Special Educational Needs and Disability Code of Practice when meeting the needs of children with special educational needs and disabilities and developing a special educational needs policy.

Not yet an Alliance member?

Find out more about our fantastic membership benefits on our Membership page.

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Marketing your early years business

Marketing helps you better understand and anticipate your customer needs. It gives you expertise and the right tools to adapt quickly to a changing market and ensures your early years business competes successfully.

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Charitable settings

Charitable early years settings are usually managed by a committee of volunteers nominated by the parents, who together form the trustees of the charity, and take the role of the Ofsted ‘registered person’.

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Employing and managing early years staff

Supporting the skills and wellbeing of the staff in an early years provision is an important part of delivering high standards of education and care for children.