Increased demand for high-quality childcare in NSW makes investment extremely attractive. However, before making a purchase – Research is Key! Read this guide before buying a childcare business.
Here’s our 8 point checklist…
1. Location, Location, Location!
Who lives in the area? Is the population growing with the right kind of demographics? Are there plans for new housing and or business developments? Do these plans include applications for new childcare centres?
Who are your competitors and how do they position themselves in the market? If possible, find out what they charge, if they have waiting lists and how do their occupancy levels appear.
What is the current staffing situation? Do the staffing levels meet the latest government requirements? Do all the staff have the required qualifications? Are the current staff happy, committed and prepared to remain if there is a change in ownership? Parents and children like the consistency of care, so it is important to know that there won’t be any large migrations of staff during the early days of ownership. Also, if the business suffers from a high staff turnover, this could be a sign of a deeper issue. The costs of finding and replacing staff should be factored into any business plan.
4. Legal Requirements
Ensure that your legal representation or broker is fully aware of all licensing and legislative requirements. Is the childcare centre compliant? Are you able to review relevant licenses? Are there any restrictions to future expansion?
5. Occupancy Rates
Is the centre currently at 100% capacity? Does it have a waiting list?
6. Your Plans For Services
If you are planning a change to current services by adding a meal service or a change in curriculum, would that require a change in structure or rates and how will this affect the attractiveness of your centre compared with your competitors?
7. Leasehold Property
Is the lease agreement stable? What are the rental terms and are they realistic for your initial cash-flow to support?
8. Security, Health, and Safety
Are all current fire safety regulations met? Are all outside areas fully fenced and properly maintained? Consider the current security situation, how much work and investment will it take to bring everything up to standard?
So, before deciding on getting into the childcare centre business, consider each point of our checklist.
Investment in a childcare centre is an extremely popular choice for the savvy entrepreneur. Childcare Concepts can offer guidance and advice on your purchasing decisions, contact us today. Real industry experience working for you!