MTM IN THE NEWS: In Focus: How setting up a nursery can benefit your independent school

If the conditions are right, opening a nursery can provide a good return on its investment – but schools must do their research first, writes James Leggett for Independent School Management Plus…

There are some four million pre-schoolers living in the UK today, half of them in homes where both parents work for at least part of the week. Whereas in the past, childminders and local playgroups would have plugged the childcare gap, the recent tightening of government regulations has meant that many less formal set-ups have fallen by the wayside. Parents are now more likely to use a chain nursery or a pre-school attached to a school to care for their children while they are out earning a crust.

Chain nurseries have been sweeping across the country, and now nearly half of all nursery settings in the UK are part of a group. Familiar names Busy Bees and Bright Horizons, for example, between them account for nearly 5 per cent of the nursery market, and there are more than a thousand other providers operating more than one setting.

State primary schools have been fairly speedy to provide care for little brothers and sisters on-site or nearby until they’re old enough to start “big school”, particularly since the government began offering early years funding for 15 (or, for some families, 30) hours per week of free childcare for three- and four-year-olds.

Independent schools have been less quick off the mark, however, but at MTM Consulting we are receiving more requests than ever before to investigate the feasibility of attaching a nursery or pre-school to an existing preparatory school, and to offer guidance on the benefits this may bring to the business.

It is crucial to research the available market and conduct a full feasibility study.

Before considering adding a nursery class to an independent preparatory school, it is crucial to research the available market and conduct a full feasibility study to ensure that there will be ample tiny pupils to run around your new setting.

In our experience, convenience is key when it comes to the choice of nursery, with most parents preferring to drive no further than 10 minutes to drop off and pick up their little ones. This makes the market for a nursery far more local than a prep school – usually a 20-minute maximum drive time – for reasons which can be readily explained by the parent of any toddler.

Having identified the geographical market for a new nursery, it’s important to check that a sufficient number of families in the target demographic profile are living there. Because many families use only a few sessions a week and therefore more than one child takes up one actual full-time place, MTM works on the basis that 1.4 to 1.6 target children must be available for each nursery place.

Even if your nursery will accept the government funding (many independent nurseries do not), it is likely that providing the quality of nursery that would complement an independent prep school will cost more than a standard provision. So it is crucial to make sure that families of the target demographic profiles – based on household income and other lifestyle factors to match those of your school’s current families – are present too. Establishing that a target market exists is a very early indicator of your potential new nursery’s future success or failure and is a step not to be missed in the feasibility process.

Even once a market  for a new nursery has been established, it is important to ensure that the school is prepared to make the commitment a nursery setting requires.

We establish the number of under-fours who live in the 10-minute catchment and their demographic profile, not just at the current time, but also in five and ten years from now. This is then compared to the number of pre-school places available to establish whether or not there is sufficient demand for a new provision and to ensure that the market is sustainable into the future.

If the potential new nursery passes the feasibility stage, then it’s time to consider the type of setting the identified market demands.

Our researchers examine the settings that are currently open in our client’s area and find out what is on offer in terms of the nursery environment – the buildings and outdoor space, for example – as well as the structure of the nursery day, available activities, and even the food.

We also look into the fees and any extra costs parents will incur, such as whether or not nappies are provided for little ones who need them. Something else we pay particular attention to is the age of the nursery practitioners in the competitor settings – more mature, experienced staff are often preferred by nurseries and parents, as there tends to be less regular staff turnover.

Of course, no school would consider opening a nursery without the promise of a return on its investment.

Even once a market and a character for a new nursery has been established, it is important to ensure that the school is prepared to make the significant commitment a nursery setting requires, in terms of finances, but also staff time and effort.

Pre-school settings are governed by a host of government rules and regulations, covering pretty much every aspect of the environment and the provision, including the amount of cubic space to be provided per child, the child:adult ratio and the number of toilets, not to mention delivery of the EYFS curriculum.

With so much to take into account, independent schools considering adding nursery provision to their offer need to be very sure that they are ready to make the required investment.

Of course, no school would consider opening a nursery without the promise of a return on its investment.

Nursery fee income is an obvious driver for many schools. A top priority for parents is finding a nursery setting where they feel their very young child will be safe, well cared for and have an excellent start to their education, and affluent and comfortably-off families are often happy to pay handsomely for this peace of mind.

Working parents often require a longer nursery day, particularly in commuter belt residential areas.

Certainly, independent schools can usually offer beautiful buildings and extensive school campuses with facilities standalone nurseries simply can’t – such as libraries, music rooms, sports halls and outdoor classrooms, not to mention the on-hand expertise of specialist teachers of languages, science, music, art and PE – that make for a superb nursery educational offer that inevitably commands a higher price tag.

Apart from the quality of the provision, there is also the quantity to take into account. Working parents often require a longer nursery day, particularly in commuter belt residential areas, and schools usually offer a menu of wraparound care to rival the day nurseries.

Nurseries can provide perhaps a far greater return on investment through longer-term recruitment.

Most independent schools offer a core nursery day of approximately 8.30am to 3.30pm, but to meet the needs of parents who are holding down full-time jobs, many also offer early morning care in the form of breakfast clubs (usually from around 7am) and evening sessions (to around 6.30 or 7pm). While some are strictly term-time only – often with the addition of holiday clubs during the Easter and summer breaks — others operate all-year-round (with days of closure around Christmas and Easter). This decision depends very much on the demands of the nursery’s target market.

While fee income is undoubtedly welcome, nurseries can provide perhaps a far greater return on investment through longer-term recruitment. Most independent schools with nurseries are particularly keen to make nursery places available to families who express an interest in their child continuing to the Reception class and beyond. For Prep schools this could represent a commitment of a further seven years of fee income; for all-through schools of course the rewards are potentially even greater.

Balancing recruitment to fill as many nursery sessions as possible while ensuring that there is always space for children who are likely to continue through the school is a fine art in independent school nursery management, but it’s worth it to encourage the very youngest of pupils to take their first steps on their journey through independent education.

To read the published article online, please visit: https://www.schoolmanagementplus.com/features/in-focus-how-setting-up-a-nursery-can-benefit-your-independent-school/?utm_content=bufferd7cce&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer