Childcare business structures
Most nurseries and preschools operate as limited companies for liability protection. Childminders typically start as sole traders. Consider your risk exposure and growth plans.
Sole trader
Simplest to set up. You keep all profits but are personally liable for debts.
Partnership
Share responsibilities and profits. Partners share liability for business debts.
Limited company
Separate legal entity. Personal liability limited to investment, but more admin.
LLP
Partnership with limited liability. Must file accounts at Companies House.
Business structure affects tax liability, personal liability, and required paperwork. Professional advice is recommended when choosing the right structure.
Decide between sole trader (childminders) or limited company (nurseries, preschools) based on your childcare model.
You cannot care for children until you are registered with Ofsted. Registration typically takes around 12 weeks from acceptance of a complete application. Caring for children without registration is a criminal offence — penalties include an unlimited fine and, for some offences, imprisonment.
Applies to: All childcare providers caring for children under 8 for more than 2 hours per day for reward
Official guidance (opens in a new tab)
Apply well before you plan to open - registration typically takes around 12 weeks from acceptance of a complete application. Ofsted will inspect your premises, check your safeguarding, and verify staff suitability.
Enhanced DBS checks are mandatory for all staff, volunteers, and anyone over 16 living on childcare premises. A DBS certificate supporting a registration application must be no more than 3 months old when you apply. Employing someone without a valid DBS is an Ofsted breach.
Applies to: All childcare settings - nurseries, preschools, childminders, out-of-school clubs
Official guidance (opens in a new tab)
Apply for Enhanced DBS checks (£49.50 each) through an umbrella organisation or online service. Processing times vary - there is no fixed turnaround, so apply early.
At least one person with a full 12-hour Paediatric First Aid certificate must be on the premises and available at all times when children are present. Emergency 6-hour PFA is NOT acceptable for primary cover. Penalty: Ofsted enforcement action.
Applies to: All EYFS-registered providers (nurseries, preschools, childminders)
Official guidance (opens in a new tab)
Book full 12-hour Paediatric First Aid courses for yourself and key staff. Valid for 3 years.
Ratios are statutory minimums under EYFS. Under 2s: 1:3. Age 2: 1:5. Age 3-5: 1:8 (1:13 if qualified teacher present). Falling below ratio is a serious Ofsted breach and risk to children's safety.
Applies to: All group childcare settings (nurseries, preschools)
Official guidance (opens in a new tab)
EYFS staff qualifications
Half of all staff must hold a Level 2 childcare qualification. Your manager must hold Level 3 or above. At least one staff member with Level 2 must be present at all times when children are present.
All early years providers registered with Ofsted must have arrangements in place to identify and support children with special educational needs and disabilities (SEND). This is a legal requirement under the Early Years Foundation Stage (EYFS) framework and the Children and Families Act 2014.
The SEND Code of Practice (0-25 years) sets out statutory duties for early years providers to ensure children with SEND receive appropriate support and that parents are fully involved.
Legal basis
EYFS Statutory Framework 2024; Children and Families Act 2014; SEND Code of Practice 2015
SENCO requirement - group settings
Group providers are expected to identify a Special Educational Needs Coordinator (SENCO) - there is no minimum-children threshold
SENCO requirement - childminders
Childminders are encouraged to identify a person to act as SENCO (childminders in a network may share one)
SENCO qualification
The Level 3 early years SENCO qualification is optional CPD (DfE-funded places have been available) - there is no statutory qualification deadline. The 3-year NPQ rule applies to school SENCOs, not early years settings
Early identification duty
Providers must have clear approach to identifying SEND and reviewing children's progress
Graduated approach
Assess, Plan, Do, Review cycle for SEND support
Parent partnership
Must work in partnership with parents and share information about SEND support
External specialists
Must work with local authority and health services when additional support needed
Ofsted inspection focus
SEND provision is a key judgement area in all Ofsted inspections
SENCO role and responsibilities
The SENCO is responsible for:
Ensuring all staff understand their responsibilities to children with SEND
Advising and supporting colleagues on SEND strategies and resources
Ensuring parents are closely involved throughout
Working with external agencies and professionals
Maintaining records of children with SEND and their support plans
Leading implementation of the graduated approach (Assess, Plan, Do, Review)
Coordinating support for children with Education, Health and Care Plans (EHCPs)
The graduated approach: Assess, Plan, Do, Review
Early years providers must implement the graduated approach when a child has SEND:
Assess: Analyse the child's needs using EYFS assessment information, observations, and input from parents and external professionalsPlan: Agree interventions and support with parents, set clear outcomes, and decide when to review progressDo: Provide agreed support and interventions, with the key person remaining responsible for working with the child dailyReview: Review effectiveness of support, assess impact on progress, and decide next steps with parents
EYFS Progress Check at age 2
Required for all children between 24-36 months; must identify any developmental concerns or SEND
SEND Support
Additional or different support from standard early years provision
Education, Health and Care Plan (EHCP)
Statutory plan for children with complex needs; provider must cooperate with local authority
Local Offer
Providers should know and share information about their local authority's SEND Local Offer
Designate a SENCO
Group providers are expected to identify a SENCO for the setting. The SENCO should be a member of staff with management responsibilities.
Support SENCO training
Consider the Level 3 early years SENCO qualification - optional CPD (DfE-funded places have been available). Courses are typically 6-12 months.
Develop SEND policy
Create a written SEND policy explaining how your setting identifies, assesses, and supports children with SEND. Share with parents and Ofsted.
Implement the graduated approach
Use the Assess, Plan, Do, Review cycle for all children with identified SEND. Document interventions and outcomes.
Establish parent partnerships
Involve parents from the earliest point. Share observations, discuss concerns, and agree support plans together.
Build external relationships
Establish working relationships with your local authority SEND team, health visitors, speech and language therapists, and other professionals.
Maintain SEND register
Keep accurate records of children with SEND, their support plans, reviews, and progress. Required for Ofsted inspections.
EYFS statutory framework 2024 (opens in a new tab)
The Early Years Foundation Stage sets standards for learning, development, and welfare for children aged 0-5.
Every setting must appoint a Designated Safeguarding Lead (DSL). DSL must complete child protection training and lead safeguarding policy, procedures, and referrals. Failure to manage safeguarding is the most serious Ofsted failure.
Applies to: All childcare settings
Official guidance (opens in a new tab)
Create written safeguarding policy covering child protection, allegations against staff, and referral procedures.
Ofsted will inspect premises before granting registration. Must be safe, suitable, accessible, with adequate space (3.5 sq m per child under 2, 2.5 sq m per 2-year-old, 2.3 sq m per child aged 3-5), toilets, kitchen, outdoor access, and risk assessments. Non-compliant premises = registration refused.
Applies to: All childcare settings, including childminders - home-based premises are also assessed
Official guidance (opens in a new tab)
Complete risk assessments, ensure adequate space per child, provide accessible toilets and outdoor space.
Register as a food business with your local authority at least 28 days before opening . Free registration. If you prepare or serve food (meals, snacks, bottles), you are a food business. Implement SFBB for Childminders food safety system.
Applies to: All childcare settings providing food or drink
Official guidance (opens in a new tab)
Food safety and nutrition
Childcare providers must meet food hygiene requirements and offer healthy, nutritious meals. Ofsted assesses food safety and nutrition in inspections.
Higher risk group
Young children are more susceptible to foodborne illness - extra care needed with hygiene
Age-appropriate food
Avoid choking hazards (whole grapes, nuts) for under 5s
Formula and milk storage
Strict temperature control for babies' bottles and expressed breast milk
Packed lunches
If children bring packed lunches, provider must ensure safe storage (refrigeration if needed)
EYFS requirement
Fresh drinking water available at all times; healthy, balanced, nutritious meals
Ofsted expectation
Food safety and nutrition assessed in 'Quality of Education' judgement
Register with local authority Environmental Health at least 28 days before opening. Download SFBB for Childminders food safety pack.
Appropriate insurance such as public liability is a statutory EYFS requirement - there is no set minimum amount. You also need Employers' Liability (£5 million minimum) if you employ staff, and consider Professional Indemnity.
Register as an employer before your first payday if employing childcare workers.
Keep business and personal finances separate. Essential for limited companies, strongly recommended for sole traders.