If you are looking to buy a childcare business within NSW, you are in luck. The demand there for childcare is high, and parents are willing to spend money for childcare at a convenient location. However, there are some important competitive and legal factors that you should be aware of.
If you are concerned about the demand for childcare businesses in NSW, then perish the thought. Reports published by the Australian government indicate that the supply of childcare is constrained by several factors in NSW, and this means that many buyers are fighting over a limited number of childcare businesses. Chief among these factors is the limited supply of property. A childcare business requires a substantial land area and also a property that is attractive to kids and compliant with the numerous safety regulations that govern childcare businesses in NSW. So most new childcare businesses open on the same property as old childcare businesses that have closed down. The building of entirely new childcare centres is a more expensive and less common investment.
At the same time, workforce participation rates of mothers are ever increasing. The demand for childcare is booming across the state, especially vacation care and out-of-school-hours care (parents are increasingly busy). This means that childcare businesses can be very profitable.
This bodes very well for your prospective childcare business, but what does the future hold? Government statistics predict that the entire childcare industry will grow by 28% in the next 20 years. This is a soaring growth rate compared to Australia’s GDP growth rate of just 2% per annum.
Furthermore, recently in June 2018 the NSW government announced that childcare would be subsidised for preschoolers as young as three years old. This has already created a large thrust in demand.
Therefore, buying a NSW childcare business is most likely a very profitable venture, however now we need to consider the matter of buying the best business for the best price.
When we think about the large difference between demand and supply in the NSW childcare industry, it becomes apparent that childcare centres are hot property. The childcare property that you’re looking for probably includes all of the following:
Finding a childcare centre that ticks all these boxes can be difficult, and it may take some time. ABBA Group have experience within the childcare industry and we can optimise your childcare acquisition or merger in the following ways:
The childcare sector is a highly regulated one, and the subsidies and regulations that the government imposes have a large effect on the childcare market.
First and foremost, the National Quality Framework (NQF) of the Department of Education and Training lays out the nationwide standards for early childcare education. One of its seven sections is titled ‘Physical Environment’ and is very relevant to the buying process of a childcare business. The childcare centre needs to satisfy numerous criteria including being accessible to children of all abilities and being environmentally responsible.
The NQF is quite voluminous but it should be a very informative factor in your buying process.
A conversation with a business brokering expert from the ABBA Group can be invaluable and may help you find the right childcare business for the right price. Our brokers have vast experience in the childcare sector and are ready to share their expertise and insights with you. To request your free consultation, please contact us below: