When a nursery reaches full capacity and starts turning families away, it’s both a fantastic achievement and a major business challenge. Do you stop growing and maintain what you have? Or do you expand to meet demand?

This is exactly the situation one of my nursery clients found themselves in recently. Just two years after opening, they had filled every available place and were having to say no to new families. A great position to be in—but one that required careful financial planning.

In our meeting, we worked through the key options available to them:

• Expand locally to meet immediate demand
• Enter a new area to build a second, independent location
• Acquire an existing nursery for a faster route to growth

Each option came with its own set of financial, operational, and strategic considerations. Here’s how we approached it.

1. Expanding Locally: Quick Growth, Lower Risk?

The most immediate solution was to find a second site nearby to accommodate children they were turning away. This approach had clear advantages:

✅ Easier to manage – Staff and leadership could oversee both locations more easily.
✅ Brand recognition – Parents already trusted them, making it easier to fill places.
✅ Lower marketing costs – They wouldn’t have to build awareness from scratch.

But it wasn’t without challenges. Two sites in the same area rely on the same local demand, and we had to consider:

• Would there still be enough interest in 2-3 years?
• Could staffing be shared across both sites?
• Would this limit future growth potential?

By reviewing cash flow forecasts and growth projections, we determined that a local expansion was the right first step—but it needed to be followed by a second, more strategic move.

2. Expanding into a New Area: Long-Term Growth Potential

The bigger-picture plan was to replicate their success in another location with similar demographics.

Expanding into a new area would mean:

✅ New market opportunities – A fresh pool of families looking for quality childcare.
✅ Stronger long-term growth – Diversifying into a new location reduces risk.
✅ A blueprint for further expansion – Proving they could scale their model.

However, this approach required more upfront investment and a strong marketing strategy to establish themselves in a new community. We focused on:

• Market research – Were there waiting lists at other nurseries in the target area?
• Competitor analysis – Were there well-established nurseries that could pose a challenge?
• Financial projections – Could they afford the initial slower growth period while filling places?

By working through these considerations, we mapped out a financially sustainable plan for gradual growth over the next 3-5 years.

3. Acquisition: A Faster Route to Expansion?

Another option we explored was acquiring an existing nursery. Instead of starting from scratch, this would allow them to:

✅ Take over an established customer base
✅ Avoid the setup phase of new business registration, branding, and licensing
✅ Benefit from existing staff and management

However, acquisition comes with its own risks. A poorly performing nursery might have financial issues, hidden liabilities, or a bad reputation that could take time (and money) to fix. Before going down this route, I advised them to:

• Conduct full financial due diligence – Review accounts, tax records, and cash flow.
• Check Ofsted reports – Any compliance issues or historical concerns?
• Evaluate staff contracts and morale – Are key employees staying or leaving?

While they ultimately decided against acquisition for now, it remains a possible future strategy.

The Role of Financial Planning in Expansion

This client’s story is a great example of how growth should be exciting, not overwhelming—but only if the financials stack up. Expansion should never be just about saying “yes” to more families; it should be a planned, sustainable move that protects both the business and the quality of care provided.

Through financial modelling, forecasting, and risk analysis, we arrived at a two-step approach:

1️⃣ Secure a nearby second site to meet immediate demand.
2️⃣ Begin researching a new area to strategically expand their brand.

By taking this route, they can grow without overextending resources, ensuring both short-term profitability and long-term sustainability.

Thinking About Expanding Your Nursery? Let’s Talk.

I work with nurseries, foster care agencies, and other care businesses to navigate financial decisions with confidence. Whether you’re considering expansion, acquisition, or just want to understand your numbers better, I’d love to help.

📩 Feel free to reach out for a chat. Let’s make sure your next step is a smart one.