5 Things to consider before closing your Day Nursery or Pre-school

5 Things to consider before closing your Day Nursery or Pre-school

March 3, 2022

Before any big decision such as closing an existing operation, the owner needs time to consider what steps will be necessary in order for the action to be completed as smoothly as possible.

In this article we will consider the 5 things the owner needs to do before closing their day nursery or pre-school:

  1. Could the existing staff take over the setting? In the case of pre-schools that are committees and often in examples where the pre-school was part of the school it rented a room from, there is the possibility of a takeover. We have seen many examples where the existing Manager or Deputy has been able to successfully take over the running of the setting in their own name to avoid the setting from closing. Could this happen in your case?
  2. Would someone ‘buy’ the setting? Are you able to see if you can find someone external who will take on the setting? Again in the example of pre-schools who rent rooms from schools, we have seen where the school takes over, or where a community interest company (CIC) and in some cases a registered charity has been formed to take over the pre-school for the benefit of the community.  Someone who already has other settings in the locality may be able to benefit from ‘economies of scale’ and operate the setting in a more profitable way than you could.
  3. When are you going to need to close the setting? This needs consideration. Do you want to fund an unprofitable setting till a certain date, i.e. half term and in that case, why? Remember to trade when you are insolvent as a limited company director is an offence. Always seek advice from an Insolvency Practitioner (speak to your accountant) if you think this could be you. Whatever date you pick will not please all your customers. My advice would be to pick a date and stick to it, it will help you plan for a smooth closure.
  4. What will a closure cost you? If you are a sole trader this will come from you. You will need to pay for the redundancy consultation period, the notice pay and any statutory redundancy payments due to the staff at the setting. If you have vacancies in other settings and you are a sole trader or it is one limited company you will need to consider whether any staff on maternity leave at the setting you are closing will take those vacancies. If you want staff to remain with you, you’ll need to consult with them about avoiding redundancy by moving their place of work. Staff who have the service that entitles them to long periods of notice may be being paid for notice they do not work, also called Pay in Lieu. Staff who are on maternity leave and receiving SMP will be still due those payments even if you close.  Always seek advice from an experienced HR Consultant who can guide you through the process of redundancies due to closure.
  5. Who do you need to inform? Consider all the stakeholders in your setting. These will be suppliers, customers (parents), the Early Years Advisors at your local authority, the staff, your landlord, your bank, your accountant, your HR Consultant. They will all need to know and understand what is happening and when.

Finally, closing a setting you have poured your heart and soul into will be upsetting. When you are busy handling the closure you may not grieve what is happening, but when it’s over you might. Please take time to look after yourself if you are to be able to look after others such as your parents and staff.

If you need any assistance with handling the closure of your Day Nursery or Pre-school please call us on 01527 909436. We have a fixed price redundancy package on sale in our ‘shop’ to assist you at this difficult of times.


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