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Many people want to own a childcare centre because it’s an evergreen industry. If planned and executed correctly, you can indeed make a good return on your investment. With the advent of many online platforms like Childcare 4 Sale, investing in the childcare industry is now easier more than ever. But how do you get started with it?
Investing in a childcare centre requires the same discipline and approach needed for any other type of investment. You’ll learn about the correct approach to investing in the right childcare centre in the subsequent sections.
Types of Childcare Centres
Before investing in a childcare facility, you must know that there are different types of facilities. You can choose from any of the following:
- Long daycare
- Family daycare
- Preschool
- Occasional care
- OSHC or Outside School Hours Care
Each of these types varies by the services they offer. Long daycare provides all-day primary care for children. They specifically target working couples and the general community. Since the parents are off at work, they need someone to take care of their kids all day.
Similarly, family daycare is when the caregiver goes to a family’s house to care for the children. Managing these facilities is completely different than managing daycare centres.
Preschools, also known as kindergartens, are another popular childcare centre. They are more advanced than daycare centres and are consequently more profitable.
Occasional care and OSHC are more specialised types. So you need to select the type of childcare centre you want to invest in.
Location is Paramount
Childcare centres are going to be location-based assets. In other words, they will serve a particular region, territory, or neighbourhood. So to succeed in such types of investments, you need to take location extremely seriously.
Ideally, the area should have enough customer bases. So if you’re investing in a long daycare centre, it’s better if there are many offices around. This way, parents will find it easier to drop them at the centre near to their office.
Likewise, it would help if you had enough customer bases for other types of childcare centres you’re planning to open.
It’s better to conduct market research on the location before you invest in it. You can refer to the Australian Bureau of Statistics for the latest census report.
Road Exposure
Just like location, road exposure is vital to the success of the daycare centre. That’s because it’s inherently more visible to the passers-by. There’s no advertising or marketing cost required. Your business is just visible to all.
Because of this free exposure, these spots also tend to be expensive. So expect to pay higher rentals and other associated costs.
The locations that are a few metres away from the road provide the right mix of cost and exposure. With techniques like digital marketing and billboard advertising, you can drive people into your childcare centre.
But it’s always better to have road exposure for your investment.
Franchise or Independent
There are two types of childcare facilities you can invest in. One is a franchisee, and the other is an independent centre. Franchise centres are considered better because they’ve created a brand for you and spend money on advertising nation-wide.
You can leverage this brand reputation and expect a better response from the parents. But they also tend to take a cut from each enrollment. In some ways, they are also restrictive.
Independent centres do not have to share any profits and are more flexible when offering customised services.
Each will have pros and cons. So you can decide accordingly.
Approved or In-Approval Status
Whenever you find a childcare centre investment opportunity, you’ll notice that they’re either approved or in the process of approval. This is common among centres that are newly constructed from scratch.
If they have an approved status, then it becomes easier to take possession and start your business. The developer or broker has done all the regulatory work for you. To open a childcare centre in Australia, you need to get both provider approval and service approval. Depending on the state, this can be a time-consuming process.
So if a facility isn’t approved for operation yet, you may have trouble starting after taking possession. As an advantage, they cost less when compared to approved centres.
So ideally, you’d want to invest in a childcare centre that would fit your requirements, preference, and budget. When making investments, you should always plan for the long term. It’s worth checking if the centre can be expanded and if you can increase the number of seats.
Many online platforms like Childcare 4 Sale list the childcare centres you can own in Australia. So research before you invest.
