Running a nursery can feel like juggling a hundred balls in the air while balancing on a unicycle – and that’s before you even look at the budget! Let’s dive into the top five tips to help you save pennies without compromising on the magic you bring to little learners every day.
At Blossom, we’re all about helping nursery managers and owners streamline their operations, so we jumped at the chance to chat with Lucy Lewin, founder of The Profitable Nursery Academy.
Lucy recently ran one of our best-attended webinars for nursery managers who wanted to learn how to supercharge their nursery finances. With glowing reviews and practical takeaways, we wanted to share some expert advice with you in blog form.
A seasoned pro when it comes to making nurseries not just survive but thrive, Lucy shared the ‘simple science of saving’ with us on the topic of optimising nursery spending.
Let’s dive into the top five tips to help you save pennies without compromising on the magic you bring to little learners every day.
In this article:
5 pillars of an effective nursery business
Lucy Lewin’s Profitable Nursery Academy is built on a rock-solid foundation known as the 5 Pillars of Profitability.
To achieve a perfect balance between financial success and quality education and care, every nursery must master these key areas.
The pillars cover occupancy, staffing, finance, strategy, and mindset and are wrapped up in 5 P’s…
- Preparation (developing an operations manual for your setting)
- People (from induction and beyond)
- Professional Development (developing team knowledge and skills)
- Planning (tools for efficiency and effectiveness)
- Profits (strategy and planning for profit)
Sounds simple – what’s the catch, and why aren’t all nursery settings thriving?
Many nursery managers unknowingly trip up by overlooking small inefficiencies, struggling with team dynamics, or getting lost in the daily whirlwind of operational processes rather than thinking strategically.
Nurseries are also at the mercy of government initiatives. The recent increase in National Insurance Contributions (NIC) and uncertainty surrounding 2025/26 nursery funding rates make the concept of a profitable nursery seem achievable for the few, not the many.
Whether you’re trying to make government-funded places work for you or your main income is through parent fees, knowing how to work smarter, not harder, to keep your business’s hard-earned money is valuable.
So, grab your favourite notebook and pen, and get ready to take note of our top tips for saving money.
Looking for more expert advice and tips on budgeting for 2025? Download our complimentary Ultimate Budget Guide for 2025, packed with valuable finance-related insights and resources.
5 ways to optimise your nursery spending
Lucy explained how she is wary of giving nursery managers and owners numbers and figures when she works with them to improve their nursery. For true success, you’ll need to know the working out to find your own setting’s numbers.
A 70-place nursery in the North East will have very different needs, demographics and staffing structures than a nursery of a similar size in Central London. This is why looking at your parent fees compared to another setting can be helpful as a starting point, but ultimately requires total context to help you optimise your spending.
Now, if you’re starting to think this sounds a little too much like hard work, then the following steps are exactly what you need.
1. Just do it!
We’re not referring to the well-known sports brand here. We’re alluding to the advice countless successful business coaches write and talk about daily.
There's always something more important to do than tackle finances. In a nursery, someone will always need you.
When it comes to finances, many nursery managers fall into the trap of procrastination, convincing themselves they’ll look at the numbers next week.
But, as Brian Tracy’s famous book Eat That Frog teaches, tackling the hardest task first brings clarity and momentum.
Often, digging into your finances isn’t as overwhelming as you think. It might even surprise you! Taking the first step to review your spending is essential. The sooner you start, the sooner you can spot opportunities for improvement – one mentioned in our blog about nursery budget tips for 2025!
2. An honest self-audit
To manage effectively, you first need to understand where you shine and where you stumble as a leader.
Are you a natural strategist, or do you thrive on operational detail? Realistically, for a nursery to run effectively, your team will include a mixture of both.
Take some time to audit your strengths and weaknesses – honestly. Knowing where you excel and where you might need support helps you focus your energy where it counts and identify gaps that could hold your nursery back from its full potential.
Here are some areas you might want to consider when you do your reflective audit:
- Parent management
- Compliance with legislation
- Interaction with external agencies
- Building networks
- Managing finances
- Thinking strategically
- Problem-solving
- Identifying the problems
- Research on effective methods and practices
- Interest in government changes and educational research
- Rota management
- Staff development and support
- Mental health advocacy
- Financial forecasting
- Child development
3. Know your numbers and benchmarks
Data is your best friend when it comes to spending smarter. Keep tabs on year-on-year and month-on-month child occupancy rates, staff costs, and your financial forecasts.
These benchmarks give you a clear picture of where you are versus where you want to be. Without them, you’re flying blind. Tracking these figures regularly can reveal patterns, highlight inefficiencies, and show you where to focus your efforts.
You may be at the starting point when it comes to benchmarking, and that’s okay! Look at the spending in all areas across this last year, and earlier if you have that data. Attack it with curiosity about what your benchmarks are. If you haven’t been actively looking to optimise your spending until now, then your previous years’ data will be a realistic benchmark for your spending.
As a real-life example, Lucy explains her nursery’s location is in an area with more childcare places than children currently. So, if she used full occupancy as her target, she’d regularly fall short.
This is where the numbers aren’t as superior as the working out.
If your 85-place nursery is often 60% full, the 60% figure effectively becomes your new baseline, which we can term your operational occupancy level.
Don't chase 100% occupancy when you're operating at the wrong price for your setting.
4. Share the load
As the saying goes, “You can do anything, but you can’t do everything.” Trying to tackle every aspect of your nursery alone is a recipe for burnout. Instead, share responsibilities with your team – if your answer to that is you don’t have a team to do this with, then that’s your first step.
By involving your staff in areas like budgeting, scheduling, or even brainstorming cost-saving ideas, you’ll not only lighten your workload but also empower them to take ownership of the nursery’s success.
Lucy shared a fantastic example, as a nursery that operates with practices that encourage the psychological safety of her team – there are no silly ideas to suggest. One of Lucy’s practitioners went on a Hygge training session and wanted to change from using the ‘big light’ to smaller, softer lighting – fairy lights and homely lamps. She was encouraged to ‘run with it’.
The impact this had on behaviour and engagement of the children was astonishing. As was the reduction of the electricity bill by several hundred pounds that following month!
Although not intentionally saving related, the goal was to alter the already-homely setting further. Micromanaging all aspects of your nursery takes you away from having the thinking capacity and time to sit down with your leadership team and goal set.
Another one we have to share is saving related and a perfect example of when spending is questioned, not just accepted. During one of their monthly strategy planning mornings (more on this in a second), one of Lucy’s leadership team questioned the cost for waste removal, noticing it had increased slightly – not an amount to lose sleep over, but it all adds up!
She was encouraged to take the lead in trying to find a cheaper alternative. After realising their fee was calculated by weight. The nursery went on a recycling drive, saving money month-on-month and meeting their eco-friendly goals for the year.
You can't underestimate the power of the people. Have discussions, be open and honest. Encourage creativity and idea sharing.
5. Shift from operational to strategic thinking
If you feel like you’re always spinning operational plates with no time to think, it’s time for a mindset shift (or a staffing restructure).
Make space for strategic leadership by scheduling monthly meetings to review progress, discuss savings opportunities, and set clear goals. This shift from reactive to proactive management ensures you’re steering the ship, not just patching leaks.
A nursery thrives when its leader has the time and headspace to focus on the bigger picture. Carve out some time for you to complete the self-audit mentioned earlier and discuss with your team their strengths, honesty is the only way to improve.
Either work to improve your skills in those areas or see who is currently more suited to that task.
How can Blossom help you save money?
We understand the unique challenges nursery managers face – our founders and managing director still run and own their own nurseries.
Our software is designed to make your life easier and your nursery more efficient. Our all-in-one nursery management software gives you the tools to take control of your finances, track occupancy, streamline staffing, and stay on top of your benchmarks.
By freeing up your time from operational tasks, Blossom empowers you to focus on the big picture – building a thriving, profitable nursery where children flourish.
Contact our team to learn more about our money-saving features, and we can make the move from your current provider seamless and stress-free.
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