Business Plans: Why leave them till last?

During our time in consultancy, we have been approached by countless individuals and organisations to support them through the Ofsted registration process of opening up a children’s home. The main request we get is for support around producing the key documents and policies needed to submit with the SC1 application, and of these documents it is ALWAYS the business plan that top of the list of requests. Why is this?

If I wanted to start a business, for the sake of argument, lets say I want to open up a new children’s home, then the FIRST thing that I would do is to plan how I am going to do it! Yet for pretty much everyone we’ve supported, it is always the last thing that gets done.

Your business plan isn’t just a piece of paper. It is the evidence that Ofsted are going to use to measure whether you are serious, know what you’re doing and can deliver on what you say. It will detail how you are going to pay for it too! Again, I’m amazed by how few people have actually drilled down into how much a children’s home costs to run, what you need to pay for, how they are going to cope with delays in payments, struggles to match placements. A children's home can return good profits (which should ONLY come as a by-product of high quality care by the way!) but they are also incredibly complex and can be money pits too. Ofsted will want to see that you have considered all of this in your forecast and that you won’t throw the towel in if the profits don’t match expectation, leaving children high and dry (which has happened, and is why Ofsted are really being picky with registrations).

From our persective, the importance of the business plan and it’s complexity is reflected in how much we charge to do them and I’d be surprised if other consultancies aren’t similar in this respect. I would also say that a consultant isn’t always best placed to write the plan, especially if they haven't got a complete overview of your finances and as such, we always advise our clients to have a go themselves (with our support). It makes it more accurate and also much cheaper for the client (as less consultant time is needed). There are also templates out there that give some guidance but still need you to fill in the information and there is no guarantee that the finished plan will pass muster with Ofsted.

It’s a minefield, but to help out a bit, here is a brief overview of some of the things you might want to think about when writing your own plans. There isn’t a definitive format and it doesn’t have to be chapter and verse. You will be able to triangulate some of what you say in the Statement of Purpose where you can be more prescriptive and then go back and amend the business plan accordingly prior to submission.

Executive Summary: Define Your Vision Clearly

This is the first section, but it’s best written last. It summarises your business idea, goals, and unique offering. In a few concise paragraphs, answer:

• What kind of children’s home are you opening (e.g., single or multi-bed, short or long-term)?

• Who will you support (e.g., ages, needs, background)?

• What’s your mission and vision?

• What makes your approach distinctive?

Keep it accessible but impactful. This is your chance to win early confidence from stakeholders and keep you on track when planning further down the line.

Market Analysis: Know Your Sector and Local Need

Next, demonstrate a clear understanding of the children’s residential care sector and your target market.Include:

• A summary of current demand (e.g., local authority needs, national placement shortages).

• Information on your competitors – what do they do well, and what gaps can you fill?

• Trends such as increasing need for therapeutic care or support for children with complex needs.

Gather insights from Ofsted reports, local authority strategies, and national research.

Services and Model of Care

Explain what kind of care you will provide and how. Use plain language, but back it with evidence or frameworks where relevant.

Include:

• Your statement of purpose highlights - what outcomes you aim to achieve for children.

• Whether your model is therapeutic, trauma-informed, or behaviour-based.

• How you’ll meet children's health, emotional, social, and educational needs.

• Safeguarding, supervision, and key working systems.

You are showing how your home will be safe, nurturing, and outcomes-driven.

Operations and Staffing

The backbone of any children’s home is its team. Lay out how your home will operate day to day. Cover:

• Staffing structure and roles (e.g., Registered Manager, care staff, waking nights).

• Qualifications, ratios, and training plans.

• Shift patterns, supervision, and team culture.

• Registration process with Ofsted, including timelines.

Include a sample weekly schedule or rota if possible—it shows thoughtfulness and realism.

Marketing and Referrals

This part outlines how you’ll attract referrals and maintain occupancy. Focus on:

• How you’ll build relationships with local authorities and placement teams.

• What documentation and evidence you’ll use to showcase outcomes and progress.

• Your approach to assessments and matching.

Many homes rely on reputation and networks—your plan should show how you’ll build those from day one.

Financial Projections and Budgeting

No plan is complete without solid financial planning. This is vital! You need to be thorough and realistic. You will be amazed by the amount of plans that we’ve seen that don’t factor in the cost of feeding children, employers nationally insurance and pension contributions and even rent or mortgage payments.

Include:

• Start-up costs (e.g., property, registration, recruitment, equipment).- Ongoing operating costs (e.g., salaries, utilities, insurance, food, training).

• Forecasted income based on realistic placement fees.

• Break-even point and contingency planning.

A detailed 12–24 month cash flow forecast will be vital, especially if seeking investment or funding and convincing Ofsted that the home will be financially viable.

When forecasting it is also a good idea to remember that you won’t be full from day one (when you get your certificate) and it will take time to reach capacity. There will also be significant financial costs between being ready to open (having staff and systems in place) to Ofsted undertaking their inspection visit (they say 17 weeks but in practice it is often much longer) and being able to place children. You will need capital to cover this period (and you will also need a bank reference unless you are an LA).

Compliance and Quality Assurance

Demonstrate awareness of your legal and regulatory responsibilities.

Cover:

• How you’ll meet the Children’s Homes Regulations, the Social Care Common Inspection Framework (SCCIF) and other statutory guidance and legislation

• Safeguarding policy, risk management, and Regulation 44 visits.

• How you’ll respond to complaints and feedback.

• Your quality assurance systems (audits, supervisions, reports).

This reassures regulators and investors that you are prepared for accountability.

Final Thoughts

A great business plan for a residential children’s home balances compassion with professionalism. It shows that you care deeply about children’s futures—but also understand the operational, financial, and regulatory responsibilities involved. Don’t just write your plan for regulators or funders. Write it for yourself and your team—to stay focused, inspired, and ready to deliver meaningful, long-term impact.

We can help, but we would much rather you do this one yourself!!!!!!!!