Child’s play is serious business

As the landscape of the UK’s childcare market is undergoing a seismic change, business analysts, leaders and lenders are paying close attention.

Child’s play is serious business

As the largest sector within the Elite Franchise Top 100, childcare and children’s activities play a significant role in the franchising industry, offering franchisees the opportunity to build a significant business whilst making a positive impact on families and communities.

As the landscape of the UK’s childcare market is undergoing a seismic change, business analysts, leaders and lenders are paying close attention.

At £6.7 billion, the same size as all consultancy services in the UK, the children’s day nursery sector has always been significant but with a staggering 25% growth since 2020, it promises enormous potential to those providers who can deliver quality provision in a profitable way. 

The UK has 3.6 million children aged 0-4 years and with increasing numbers of dual income families, a higher percentage of these children require childcare places than ever before.  With the average cost of a full-time nursery place currently standing at £263 per week, which equates to £13,676 per annum, you can understand why it can become the biggest cost facing working households.

Recognising this cost burden as well as wishing to encourage valuable talent back into the workforce, the government announced that it was extending its free/funded childcare scheme for eligible parents.  This is a staggered approach which will result in children under the age of 5 ultimately being eligible for 30 hours of childcare per week.  Whilst there remains some debate over the efficacy of this scheme, it will result in increased funding available for the sector and increased demand for childcare spaces.

Over recent years, there has been a notable shift in the structure of the day nursery market, from small, independent, single-ownership operators, to larger, multi-unit chains and organisations. The UK’s two super-groups, Busy Bees and Bright Horizons, run between 300 and 400 settings each and continue to grow and consolidate, whilst mid-size operators are acquiring clusters of independent nurseries to upscale.  Despite this, there remain over 31,000 Ofsted-registered providers (excluding childminders) in England and 80% of these are still in the hands of many independent operators so there is significant potential for further consolidation.  Lenders recognise the strength of the industry, resulting in a proactive banking approach which smooths the path for financing growth.

Modern-day nurseries offer not only childcare services but also provide a diverse range of educational experiences and activities to deliver the early years foundation stage curriculum.  Research has proven that children who receive a quality early years education in a nursery environment have better outcomes in terms of their cognitive and social development. It is this opportunity to shape young lives which motivates many to embark on the journey to starting their own nursery business, building an industry which is full of passionate advocates for the youngest members of our society. 

A passion for and a belief in the value of your service is necessary to sustain entrepreneurs in the early start-up stages but this has to be combined with astute financial and business acumen in order to build a successful and sustainable nursery.  

Key barriers to entering the nursery sector include high initial investment to secure a suitable premises, develop and equip it as an enabling environment for young children as well as a strict regulatory framework which can be challenging for new, independent operators to navigate.

By providing a strong brand and a proven business model coupled with an effective training and mentoring programme, franchising smooths the path for entrepreneurs wishing to enter this market.

Canopy Children’s Nurseries is a fresh new brand in the market which prides itself on meeting the evolving needs of modern parents.  While the quality of care and education remains paramount, today’s parents also expect state of the art security systems, flexibility to fit around new work patterns, digital communication and information platforms as well as highly ethical working practises.  Where possible,  parent co working and community spaces work well when integrated alongside nursery provision. 

With 3 nurseries operating, another 3 opening this year and more in the pipeline, Canopy won this year’s prestigious HSBC BFA Emerging Franchisor of the Year award and the team at Canopy pride themselves on working closely and collaboratively with their franchisees, supporting them to open the nursery business of their dreams.  

If you are searching for a business which will make a difference to your community, in a growing and increasingly sophisticated market, then it is time to get serious about a business which will never run out of customers or fall out of fashion! 

This article is brought to you by Lynne Newman, Business Development Director at Canopy Children’s Nurseries An exciting franchise, which is leading the way in providing exceptional natural environments for babies, toddlers and pre-school children helping them to blossom and thrive. 

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