The early years sector remains one of the most rewarding areas of investment in the UK. With rising demand and government support, nurseries and childcare settings are not only vital community services – they are attractive, long-term business opportunities. In addition, the childcare sector is a resilient market due to relative demand inelasticity.
If you are planning to buy a childcare business, there are a few key elements to consider during the acquisition.
Regulatory Requirements and the Importance of Reports
If you are considering buying an early education business, one aspect of the business will be of vital interest from the start – the inspection reports. Review the last inspection assessment to understand the current quality of care provided and any areas of improvement that may be required.
In the English education industry, the Early Years Foundation Stage (EYFS) statutory framework, sets out the requirements that Ofsted registered settings must fulfill for the education, growth, and well-being of children from birth to age 5. This includes the minimum amount of space per child, number of adults per child and many other stringent requirements. Current regulations may be set to change at the end of 2025, as the EYFS is reviewed annually.
Across the devolved nations, separate regulators and frameworks apply.
In Scotland, early years settings are inspected jointly by Education Scotland and the Care Inspectorate. The Curriculum for Excellence and Realising the Ambition guidance shape learning provision, with a focus on play-based, child-led approaches and emotional wellbeing.
A standout element in Scotland is the significant emphasis on outdoor learning and the use of natural environments as part of daily routines. This means facilities often need access to quality outdoor space, and urban settings may face more challenges meeting inspection expectations. Inspection grades are holistic, and the Care Inspectorate places particular weight on the quality of relationships and the responsiveness of care.
In Wales, Estyn and Care Inspectorate Wales (CIW) work together to assess provision under the Curriculum for Wales, which is centred on four core purposes of education – including creativity and well-being – rather than narrow academic outcomes.
Wales stands out for its bilingual requirements. Welsh language exposure and use is encouraged or required depending on the setting type and location. Buyers unfamiliar with these expectations may need to consider staff fluency or curriculum adaptations. In addition, CIW’s inspection regime separates education and care reports, which can give mixed signals to parents if outcomes differ.
In Northern Ireland, early years services are overseen by the Education and Training Inspectorate (ETI), with care standards regulated by local Health and Social Care Trusts. Most learning settings follow the Aistear and Pre-School Curricular Guidance frameworks, which are more thematic and less prescriptive than in other nations.
Inspection and registration in Northern Ireland are more fragmented. Different agencies inspect education and care separately, and some providers must liaise with multiple Trusts depending on their location or registration status. This can increase administrative workload and delay approvals. However, there is also more scope for relationship-building with individual Trust officers, which some operators find helpful in shaping long-term quality plans.
Negative inspections can impact client retention and you will need to consider any changes or new ways of working you would need to bring in in order to develop your business.
Diversified Services, Stronger Education Business Models
Today’s nurseries are often more than just Monday-to-Friday provision. Many successful operators are diversifying by offering wraparound care: after-school clubs, weekend playgroups and holiday clubs are more common. Not only do these services increase revenue, but they also deepen engagement with local families and position the business as a trusted pillar of the community.
For buyers, this means added opportunities to grow both income and reputation. If the nursery you’re looking at isn’t currently offering extended care, consider whether the premises, staff, and local demand could support it post-acquisition.
Favourable Policy
Another key driver of growth? Government policy. In Scotland, free funded hours increased from 600 to 1,140 per year in 2021. In England, the recent expansion in free childcare funding for eligible parents – from 15 hours to 30 hours a week – is poised to increase growth in the sector. In Scotland, all three- and four-year-olds – along with qualifying two-year-olds – are already entitled to 30 hours of government-funded childcare each week throughout the school term. In Wales, there has been a £30 million increase to the Flying Start programme. In Northern Ireland, the Education Minister has announced an additional £55 million to expand the early learning and childcare subsidy scheme. More funded hours mean more children in nurseries, longer sessions, and more secure occupancy levels.
While the funding rates per child remain a topic of debate, savvy operators are finding ways to balance funded hours with private fees, wraparound care, and additional services to create a sustainable business model. Buyers should ensure any potential setting is set up to maximise the benefit of these policy changes.
Think Ahead: Have an Exit Strategy
One of the most overlooked aspects of buying a business is planning your exit – before you’ve even started. This is especially important in a consolidating market.
At Redwoods Dowling Kerr, we’re seeing increasing levels of M&A activity in the early years sector. Groups are acquiring other groups. Regional operators are scaling to national. Notable examples include Oxfordshire Nurseries Limited, a respected group of four settings in southern Oxfordshire to ICP Educare Limited and Green Giraffe Day Nursery Ltd, a group of five nurseries in Wales, to a fast-growing childcare group. Both of which have expanded through strategic acquisitions to unlock operational synergies and benefit from economies of scale.
As a buyer, consider your long-term strategy. Are you looking to grow a single nursery into a small chain? Or are you acquiring with the aim to scale the single setting and sell to a larger operator in the future? Your answer will shape how you approach everything – from branding and staffing to lease negotiations and compliance.
Why Staff Retention Matters
Every successful nursery thrives with a highly skilled team at its core. Exceptional leadership – typically in the form of a well-trained manager or early years professional – sets the tone for the entire setting. Ofsted inspections, parent reviews, and child development outcomes all hinge on the capability and stability of your staff.
From safeguarding to curriculum delivery, the workforce must be deeply knowledgeable and well-supported. When acquiring a setting, due diligence should go beyond the finances. Look closely at staff turnover, qualifications, and the presence of a strong deputy structure.
Property and Scope for Expansion
Many nurseries occupy sizeable plots, often with outdoor areas that are both cherished by parents and brimming with untapped potential. In some cases, there may even be scope for planning permission to expand the premises – adding rooms, outbuildings or new classrooms to boost capacity – or to reconfigure current buildings to expand their use.
Whether you’re buying a freehold or leasehold property, pay attention to the land and property included in the transaction. Uncovering development potential may significantly enhance your return on investment.
Stability for Little Learners
Finally, don’t forget the people who matter most in all of this: the children. A stable, well-managed learning environment is critical to early development. Sudden changes in ownership or staffing can unsettle children and parents alike. The best transitions are the ones that feel seamless to families – continuity is key.
That’s why it’s vital to work closely with current owners and staff to ensure a smooth handover. Clear communication, consistent leadership, and gentle, gradual changes will not only reassure parents but protect the business’s goodwill and reputation.
Why Now, Why RDK?
Acquiring a childcare business is more than just a financial decision. It is a step into a sector that delivers long-term value and impact. Whether you are entering the market for the first time or expanding an existing group, your success starts with the right opportunity and the right guidance.
At Redwoods Dowling Kerr, we work closely with buyers across the UK to match them with businesses that reflect their goals, values and long-term ambitions. Our nationwide portfolio includes a wide range of early years settings, offering options to suit different investment levels, operational models and geographic preferences.
We support our buyers at every stage of their acquisition journey, from first-time purchases through to group expansion and strategic growth. If you are ready to take your next step in the childcare sector, contact RDK to move forward with confidence.
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