Are you thinking of expanding your nursery business?
All business owners dream of expanding their business, however there are things to consider when thinking of doing this.
Is your current nursery at a point where you are turning potential customers away, could you do with more space and could you easily fill this space? When thinking of expanding your nursery think long term as well as short, do your research into the demand for childcare in your area. You wouldn’t want to be in a situation where your new business venture is only at full capacity for a short period of time then it begins to tail off. Is there an option to expand your current nursery to accommodate the potential number increase? Don’t forget to look into planning permission if you are thinking of expanding your current nursery and also ask yourself the question of how you are going to fund the expansion.
When you are considering expanding your nursery ideally your current nursery should be performing well and having a strong reputation is key when looking to expand.
Do your research to see if demand is high and do nurseries in your area have waiting lists. Enquire will your local council to see if any new housing estates are on the horizon to be built, this information is key to helping you make that decision on expansion.
Try an obtain some local demographic information, detailing birth rates etc, having data and figures along with other information is a great starting point when looking into expanding your nursery business.
Expanding your nursery business may mean expanding your existing nursery to accommodate more spaces. If you thinking of this option look at permitted development rights, however it has been said that it is far easier nowadays to carry out smaller extensions on existing buildings.
Another option is to look for new premises, think about the best location as you don’t want to be to close to your existing setting but not to far way to benefit from your strong reputation. Have a strong team ready to help with the set up and if able to transfer some of your staff to help set the standards.
If you require planning permission seek expert advice.
Expanding your nursery business will very much depend on you financial position, there are two key factors when contacting a bank for financial help. A business plan and a strong driven minded management team are the two elements that banks need to see when making a decision to lend a business. Without a strong and driven management team the nursery will be running at a low capacity and not making a profit.
A business plan can hold some key information; it should show that the business owner is able to support the business today and for ever more in the future.
Key elements in a business plan
- Background information of the business.
- Structure and background information of the management team detailing experience etc.
- History of financial performance
- Forecast financial performance
- Information detailing where you want the business to go
- financial information from accountant eg profit and loss and balance sheet
- Local competitors
- Information about regulators
When compiling a business plan be as through as you can and set realistic targets and cash flow projections