If you’re interested in child development and want to run a business of your own, purchasing a nursery is a great option for you. However, there are some significant compliance requirements to keep in mind when making a purchase of this nature, not to mention some vital factors be aware of regarding the ongoing operation of your new business. With this in mind, here are some tips to help make it easier to buy your dream nursery.
Choose Your Business Structure
The first factor to keep in mind is which business structure you’re planning to use when it comes to owning and operating your new venture. You could be a sole trader, a limited liability company, an LLP (limited liability partnership), or even a traditional partnership. It’s often best to establish yourself as a limited liability company or LLP since you’ll employ staff and require multiple supplier contracts, but that means having a well-drawn-up partnership or shareholders’ agreement ready.
Arrange Your Finances
If you’re buying your nursery with the help of a loan or mortgage you may find instructing a mortgage broker is the best way for you to secure the finance, you need withy the best possible rate of interest. It’s wise, though, to have your solicitor check over your loan agreement to ensure that you have a good understanding of your liabilities and obligations.
Confidentiality And Exclusivity Agreements
If you’re buying an existing nursery, you should consider putting confidentiality and exclusivity agreements in place before you begin your negotiations. Exclusivity agreements will give you the time you need to carry out the necessary due diligence with no concerns about your seller negotiating with another purchaser and potentially selling to them behind your back. Confidentiality agreements protect the information the seller can give you in order to complete due diligence processes.
Due Diligence Process
This process involves checking the commercial and financial viability of your new prospective nursery. It will also help ensure you’ve got all the key information you need about the business before signing the contract. Due diligence involves examination of the business’s financials, insurances, existing contracts, commercial lease agreements, risk management and health and safety procedures, and any potential legal issues that are currently ongoing.
Understanding Regulatory Compliance Requirements
It is strict regulation in the UK that every nursery is registered with OFSTED and without this, the nursery may be unable to operate once you take over ownership. Negotiating with your seller may be necessary to ensure that the OFSTED registration currently in existence can be maintained until your own is issued.
You should also become familiar with the process of OFSTED inspections so that you know what to expect. Also, if you’ll be serving food to the children that is prepared onsite, it’s likely you’ll have to apply for licenses, a food and hygiene rating, and register with the local authority.
Keeping these considerations in mind is essential to ensure that you nursery purchase runs smoothly.