Published on 13/10/2018 by Any Business.Com.Au

Could I and should I buy into the business of Childcare?

A number of trends have been driving growth in the childcare centre sector for many years now, the key pillars being strong government funding, growing demand for locations and the increase of workforce participation.

A significant part of the cash flow of childcare centres is government sourced, and the move from the current rebate/benefit system to the new subsidy system has increased the funding available for lower income families.

Brought in, in July this year, the new subsidy system saw low-income and middle-income families where both parents work or with a single working parent become better off.

This is because of two key changes: the subsidy rate and the annual cap.

Under the changes, the lowest-income families are now paid the most: 85 per cent of their childcare costs.

From there the subsidy gradually tapers down as earnings increase. The lowest subsidy available is 20 per cent for the highest-earning families, before it cuts out at $351,258.

The annual cap or limit on Government support was also abolished for most families.

According to experts there is still plenty of growth left in the industry with not only government payments spurring the growth, but the urban sprawl of new suburbs that is continuously creating demand.

The monumental shift in parental requirements and service needs have also led to strong competition between centres.

This has seen a new focus on cleanliness, maintenance and the development of quality learning facilities which has ensured that centres are kept to a very high standard.

Can I buy a childcare franchise?

The short answer is yes, there are childcare franchises out there available for purchase, but it must be a partnership that works for both you and the franchisor.

As a childcare franchisee, you will need a bigger passion for the industry than just the love for your own children or because you enjoy kids. Whilst this is a great start, you will also need great business acumen, drive and a willingness to put in the hard yards.

Remember that you aren't just offering parents a babysitter; you are providing a service that will educate and care for children during the most influential years of their life.

Be passionate about that aspect of childcare and you are three quarters of the way to earning the trust of your franchisor.

How much money would I have to invest?

People are often surprised when they discover how much it costs to own a childcare franchise, and that is usually because they don't realise they aren't just buying the rights to a brand.

A childcare franchise is probably one of the more 'value for money' businesses you can invest in. And we aren't just talking about potential profits.

With any good franchise, you are usually buying a tried and tested business model and a team of experts who will assist you every step of the way.

From site selection, lease negotiation, and council and DECS approvals - through to ongoing training and review, marketing, individual education programs and childcare industry updates to keep you on top of new regulation and policies.

How involved would I have to be as a childcare franchisee?

Some people buy a franchise and hope to continue to work full-time in a separate business.

But most successful franchises are run by people who are directly involved in day-to-day business activities and who are willing to invest not only their money, but their time.

As you can imagine, running a childcare centre is a full-time job, so you will need to be prepared to put the hours in and take a hands on management approach to running your childcare franchise.

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AnyBusiness.com.au

Curtis is a leading expert in the business-for-sale industry, serving as a senior content creator at anybusiness.com.au.

With a career spanning over fifteen years, Curtis has accumulated extensive knowledge in the domain of business sales, acquisitions, and valuations. His deep understanding of market dynamics and his ability to translate complex industry jargon into accessible insights make him a trusted resource for entrepreneurs and business owners looking to buy or sell businesses.

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