Discussion on Starting New Childcare

Hi fellow Ozbargainers, 2 months ago I took the step to set up a new mid-sized childcare service in the Balwyn (Melbourne) and want to get some advise from my fellow ozbargainers who have or have had children in childcare. The issue I am getting is no one wants to send their children to a centre without kids (based on direct feedback from 12 centre tours done so far), so essentially we aren't able to get the ball rolling.

We entered the industry with very ambitious goals for our childcare for the children, parents and staff. We essentially mapped out a 5 year plan where we opted not to make any profit and heavily reinvest back into the centre, such as lower fees as occupancy grew, opting to have more permanent staff vs casuals, opting to have more staff vs what ratio requirements, offering free dinners, haircut, dental services etc…

But the issue we are seeing is, parents so far don't really seem to care about all this stuff and simply just need a centre close by and has kids and educators so they their kids are in good hands (based on the assumption, operating centre equals trust).

We are now thinking of offering heavily discounted childcare for a 1-3 month period but want to get your thoughts on where we should promote this. Since we are targeting locals, should we do more in-person activities or should just leave it to digital. Setting a poll but feel free to leave a comment if you got some feedback.

Poll Options

  • 3
    Offer free childcare for 3 months
  • 28
    Offer at least 50% off for 3 months
  • 7
    Discounts don't work, just keep at it slowly
  • 13
    I don't like any childcare operators and won't be helping you

Comments

  • +13

    Would you send your child to a center that has no history, no experience and no reviews?

    the best thing you can do is poch the best educators from your local centers that will bring children to your center as they 'might' follow the educator

    • +4

      I wouldn't even send my self

    • Actually had this idea but educators don't tend to use linkedin making it difficult to locate them.

      • +3

        Go to where they are. The early childhood teachers Victoria facebook group has over 20,000 members, allows job posts and might give you some insights into who's who. You can try messaging them directly (just don't get spammy with it) once you do a bit of research on who you want to target.

        Any educators events too, if you can get in with a QR code or find people to talk to, then go for it. Just need to get them interested and some details and you're good to go.

        It's a common problem with recruiting for schools, every recruiter wants to use LinkedIn for everything but it just doesn't work in education (and a few other areas).

        • Thanks so much! Will be checking this out.

          • @Sunman: Maybe rather than a discount to parents, offer a finder's fee to staff. If everyone's talking about the great new childcare centre they work at….??

            I'm surprised. I thought everyone was complaining they couldn't get their kids into childcare. My sister-in-law works at one and I've tried to convince my brother to give up his dead-end job and run a childcare centre with his wife. Lucky they didn't listen to me!

  • +1

    Better marketing…

    • +4

      Thanks JV, loving the insight!

  • +4

    want to get some advise

    Classic ozbargain.

    Balwyn is a pretty wealthy area. The fees aren't the issue. What does the centre look like?

    • +1

      Been using Ozbargin for years and while there are toxic corners, the community is pretty helpful especially if it relates to deals and done in the right spirit of ozbargin!

      Oh the centre is a house converted like many other small to mid sized centres in our area, but honestly I think ours looks the best as we spent 3 months renovating it ourselves leading up to opening.

    • -5

      Balwyn is a pretty wealthy area.

      🤣🤣🤣

      Some people rent…

  • Advertise on local Facebook groups that you're a new childcare and you're offering 25-50% off the first 6 months for the first X people to sign up. Or even offer send 2 kids pay for 1 idk.

    Forget all the bells and whistles for now - at the moment you just need customers and positive word of mouth.

    • +1

      I am learnign this as well, parents really didn't seem interested in all the other stuff, so maybe yes focus is on getting the word out there for a heavy discount to kick things off.

  • +1

    You're focused on cost and discounts, but that's not what people are interested in for an unknown brand new place where it comes to looking after their most precious assets.

    Some people want somewhere nice and clean and fancy, but safe and secure, and with the right focus on care and development, with added convenience, and willing to pay for it.

    Have a look at the offerings by some of the other facilities. No focus on cost, just the services.

    The Grove Academy: https://g.co/kgs/jcLRZCx

    Goodstart Early Learning: https://g.co/kgs/dj2xJea

    Also, have you considered joining one of these chains? Might benefit you to instantly boost reputation and interest.

    • We actually look this approach, focus on service being offered but we found it really didnt matter based on the initial feedback we got hence why we started to explore discounting. Prehaps we just need to discount to get the first x children then we can go back to our core values of service.

      • +1

        Prehaps we just need to discount to get the first x children

        Maybe consider "founding membership" like new gyms do… Ongoing discount for first 'x' number of children who enrol.

        Then you'll be able to get reviews and referrals to get future families….

    • Oh regarding the chains, obsoletely not, these private equity or listed business model is everything wrong with the industry. I actually think all the media attention against these large operators might make parents consider locally run centres instead.

  • +1

    Balwyn, higher icome and/or wealthy area so there will be some challenge in getting organic growth from word of mouth and you should expect slower growth especially given enrolment timelines as well.
    (Winter is especially rough due to the sickness requirements and parents will want a greater trust relationship with the centre).

    You can start to set up messaging around catering to the needs of the Balwyn type parents (senior professionals, healthcare etc etc) who could benefit from things like flexible pick-up, being about to book or schedule for those super busy etc.

    You'll want that X factor and make sure that's your messaging especially for parents who have older kids as that's when the word of mouth picks up at school and extra curricular stuff.

    • We actually connected with 2 local schools and will vs featureed in their next newletter. Idea is we try and build on this, prehaps we can set up a table or have a in-person event where we can speak our our service offering.

      Thanks on the piece around tailoring the offering to our area parents, we could allow a 15-30m grace period for late pickups for example since it's common for professinoal parents to have meetings which run over.

      • I'd keep it as a soft policy, in your messaging make it about you understanding that things pop up and that they can let you know and you'll try accommodate without any fees.

        The key is to make it like it's a favour and not a privilege as it will set a bad precedence if it's abused.

        The other thing to consider is parking and drop off zones, anyone doing basic research should see on your site etc if it's easy or not.

    • Balwyn, higher icome and/or wealthy area

      Higher rents, higher mortgage… Most people are price sensitive, regardless of the suburb.

  • -5

    Hire Onlyf*ns models to start with at the reception, trust me, I'll send my kids to your place straightaway. No questions asked.

    But seriously, social media influencers are game changer to businesses. Go reach out.

    • Haha, love the comment, but I feel if I took this approach you will be the only parent I have haha.

      Actually regarding social media, I got a friend who is quite a famous photogrpaher with a big following in Melbourne, might get him to collab with us somehow!

  • +1

    Where I am there are 2 year waitlists for certain centres and for others when spots open they are filled the same week.. I thought this was normal across the country.

    parents so far don't really seem to care about all this stuff and simply just need a centre close by and has kids and educators so they their kids are in good hands

    Maybe you could create some urgency / scarcity, and have a 'launch date'. e.g. Places filling fast, first sessions start Mon ##/MMM.

    You should also highlight your educators, people say they don't care about that but then try and get in to specific places based on recommendations of friends/family about specific experienced educators or the facilities.

    • +1

      We are considering a in-person event where set up outside the local Coles or at the market to do a promotions but also create urgency by limiting the promo period and only the first x parents. Also have our educators on site as we have been very picky on staff and I truely believe we got some of the best, even if it costed us well over award rates!

      • Also have our educators on site

        Dang. You must be bleeding cash at the moment. I hope it turns around quickly for you.

        • +1

          There is always risks with setting up a business so we went into this eyes wide open with a good cashflow and funding plan. Financially we will be fine, we don't need any profit nor salary from this centre, but we do want to get children so we can test out if our unique services and approach will work.

          • @Sunman:

            but we do want to get children so we can test out if our unique services and approach will work

            I'll let all my friends with childcare aged kids know you need some little human shaped guinea pigs.

    • +1

      Ridiculously long wait times is something I have heard repeatedly, yet when enquired myself in Western Sydney, pretty much everywhere is happy to accommodate.

      Also told the same thing for kindergaten and schools. "Make sure you apply 2-3 years in advance!", "make sure you apply before the baby is born" etc. So when I tried to, they're all taking applications for next year only.

      I'm sure it's not the same in other areas, but certainly doesn't seem to be the case out West.

      • Would have loved to be in your area but we will continue pressing on trying to sell our services to parents in our area!

      • +1

        The first childcare we got into pretty quickly in Mid-West Sydney, but not the preferred days. Moving to "Greater Sydney" though was a different experience, only 2 places out of the 12 we contacted had a place and we just went with the one that had one of our preferred days.

        Our younger kid is on a 2year waiting list with a $20 holding deposit, so will see how we go in 2027.

        Kindergarten was easy though, we applied late after moving to a new area and had no problems getting a spot.

        • Childcare operators love kindergarten age kids due to the beneficial ratios allowing for a significantly reduction in staff the more kindergarten kids they get. Operators would limit the amount of below 3yo kids so not surprised about your experience.

  • I applaud you taking a chance.

    My neighbour did the same. They had a large sign and their house was on a main road so there was lots of visibility by locals driving by. The carer was a mother and studied early childhood education. Do you have children? Do any of your friends have children around the age where they need childcare?

    • Yep massive signs and on a major road as well, but unfortunately no friends with children of childcare age in the local area.

      • +2

        on a major road

        There lies your problem. I wouldn't want my young kids sniffing in exhaust fumes and other pollutants.

  • hey OP have you done market resarch regards to the demand within your area, in Canberra, there is 12month plus waiting list to get into a center.
    Then again, parents like to send their kids to well establised center rather than newly establised one as they prefer to check it out before send their child, so the best would be to start with family and friends and good luck.

  • Buy some ads maybe. Pay a marketing company.

    • We did google ads but no traction. I am thinking more direct marketing with our educators on site would be better. We are thinking of setting up a table with our branding at local locations with our educators to interact with parents. Also we would offer a discount for the first x children to try and create urgency.

  • +1

    Rent a crowd? can you rent a group of children and make it look like your centre is busy :P

  • +2

    get some advise

    Yeah, you should not be around kids in any form of educational role…

    • +1

      Also

      based crossiants

      and

      Now crossiants isn't the best

  • Being a wealthy area there's probably a lot of stay at home mums looking after the kids. Maybe you need to market it as a fun place to leave their kids while the mum takes a break to go shopping and gets her hair done.

    • Great idea!

      OP should dedicate a room as a mummy creche. Stock the best sparkling wine with chilled glasses. Have some screens around the room playing daytime soaps. Get an in-house mummy massuese.

      • +1

        We do offer free tea, coffee and freshly based crossiants on-site to parents. Think it would be a good idea given parents are in a rush and may have skipped breakfast. Now crossiants isn't the best breakfast but it's easy for us to do this.

        • +2

          based crossiants

          ok

          Now crossiants isn't the best

          oh dear

      • Sounds great, as long as they're back home with dinner on the table for when their husbands get home.

  • are people coming in to check out the place and then not signing up? or just no one looking at all?

    id like to see pictures of your set up.

    do you have any credentials on child care? raised your own children at least? something so people know you're trustworthy?

    • Its more they are not signing up as there aren't any kids. Of course we are licensed and the 3-4 staff members have over 50 years of experience combined.

  • You should make it very clear and prominent in your marketing that you weren't featured in the recent Four Corners episode or have links to those that were.

    • We were thinking of highlighting we refuse to restrict childrens meals by adding budgets. But honestly no idea why any centre would take the risk of doing this, such a bad look and there really isn't much monetary gains by doing it. Plus one of our goals we want to introduce in the future is full farm to table by either growing at the centre or sourcing everything from local farmers market or online farmers market.

      • +1

        is full farm to table by either growing at the centre

        I admire your plans but to be honest they sound very unrealistic and not financially sustainable.

        • On paper completely financially viable. You should remember most centres are listed or PE, they have very aggressive yoy targets. Which is why we entered this industry. I should add that other family run mid sized or large centres are very good, and we actually learned a lot from what they offer.

          • @Sunman: I can make anything viable on paper. Reality is a different beast.

  • +1

    The issue I am getting is no one wants to send their children to a centre without kids (based on direct feedback from 12 centre tours done so far), so essentially we aren't able to get the ball rolling

    What about the option: Rent some kids for a few months to fill up the centre so that you can get the ball rolling.

    • -1

      Rent some kids for a few months

      Just pop down to your nearest orphanage with some fat stacks and you'll be good to go.

      • +1

        I'm sure Miss Hannigan from Annie would accommodate the OP.

    • There's laws against child labour.

  • Have a look on the ASX website for the update Mayfield childcare released today. Their occupancy rate is 55% across their centres. That’s not sustainable with all the fixed costs involved.

    The industry wants you to believe there are long waiting lists, but the reality is there’s an oversupply of childcare centres and not enough staff

    • Agreed. OP should also start with ABC Learning and learn a bit about the industry. Sure these chains were leveraged to the hilt and focused on growth at all costs, but they had economies of scale, which 1 centre will struggle with.

  • +1

    We entered the industry with very ambitious goals for our childcare for the children … want to get some advise from my fellow ozbargainers

    What are those goals? To help the children learn broken English?

  • +1

    I'm in the NE suburbs of Melbourne - I visited all of the childcare centres in my area.
    My main factor was proximity to home (especially if I could walk there..) - secondary was price - third was conditions of the facility - fourth was management stability.

    My number one pick was the closest one to home - looks like shit, but it has a stable bunch of staff.
    My number two pick was the most expensive and furthest from home because it was also stable and had great facilities.
    The rest were just as hard to get to, not cheap enough to warrant the poorer conditions with questionable management stability.

    First step is to know your customer..
    I suspect a Balwyn mummy in a Toorak tractor doesn't give a crap about pricing. They love their baby and want nothing but the best for them.
    They would care about proximity home and quality of care.
    I suspect they would be looking for a place with exotic foods on offer and good toys/mental stimulation for their children.

    I could be completely off the mark, but I don't think price is even going to be a top 5 factor here (as long as you're in the ballpark..).
    Probably a much harder market to penetrate compared to having a childcare centre in the suburban fringe where people just need a place for their child to go..

    Probably not the most constructive comment, but just food for thought.. deep discounts would certainly work in some areas but I don't think it'll work in a higher socio economic area.

    • +1

      Probably not the most constructive comment,

      Personally I think it's the most constructive comment so far. Based on lived experience and realistic.

      • Didn't necessarily feel like I provided any possible solutions though haha

        • I will take all suggestions and honestly you hit the nail on the head. Our research came to the same conclusion as well, and formed the basis of our 5 year plan. While we thought it would be a slow start, we are finding it impossible to start given we have no children at the centre, I think that surprised me a bit.

          But you are correct, location is by far the number one factor followed by trust (which is essentially staff).

          • @Sunman: ChatGPT says to do a hyper targeted campaign for a select number of people - e.g. founding families offer - get $#### credit. Limited to the first however many people.. depending on the size of the centre.. do a letterbox drop. Create fomo.

            I think it’ll be hard but worth a crack…

          • @Sunman: Could you turn it into an after school centre for a while whilst you are waiting for your first child care enrollments?

            People aren't as fussy with their older children and maybe, the older children have day care aged children.

  • +1

    As a parent with kids in childcare, focus on getting high quality educators would be ideal with staff retention being a priority. With a shortage of childcare educators, the good staff can find work easily and having low staff turnover is important for quality and continuity of care and workplace morale and culture.

    Focus on engaging learning programs/activities with enthusiastic staff and having regular updates on the apps. Make sure suncreen,hat, nappies checks are done.

    Have good terms and conditions, like 2 weeks notice period, 4 weeks of A/L @50% cost, 10 days SL etc, discounts for a number of weeks post enrolment.

    There’s so many lazy and incompetent educators out there and they really bring down the standards. The good educators see this and bring it to attention of management. However, crap management ignore this and the issues linger on. Good staff leave to be replaced with sub standard new hires or agency staff. Kids suffer at the end of the day.

    • Honestly this is where we spend a long time interviewing and getting the right initial staff. All of them are super motivated and always giving me ideas on how we can make the centre and service better. I want to make sure the staff are super-engaged as this is the key for long term success. We made a desision to hire more permanent staff, yes the sick and annual leave would be something to manage, but it is so important that I rather increase my wage bill then compromise on this.

      But this also doesn't mean we rest, this is an area we need to be constantly improving and adpating. The worst would be to set up a great froundation then stop paying attention and let it fall apart.

      • Honestly, the best way is to look after your staff and provide a great culture and benefits. Happy staff means happy children. The rest takes care of itself.

        The best centers all have a great and organised management team. Generally I find the smaller childcare companies or council owned are well run with great staff, activities, gourmet looking meal plans, communication.

        Parents don’t mind paying abit extra for excellent care

  • We moved CC several times.

    Driving factors:

    • cost
    • location (to or from work)
    • open/close time
    • staff ratio
    • outdoor space
    • reporting/administration

    Centre that shuts at 6pm is doomed vs 6:30 or 7. If the education programs are set and forget, parents aren't interested in that either.

    • Engaging and creative education programs is so important and requires cooperation between staff and management. Stuff like painting everyday is boring and is commonly used as a set and forget method. I hardly see kids being happy when they paint everyday LOL

  • What would happen if you held a huge community Fete day and had open house for your centre at the same time?

    • We moved away from this idea as I don't think people will turn up. Everyone is so busy these days that no one will take time out to come to your location. We may activate this option in a couple months if nothing changes, we have the day planned just not put into place. We were thinking a 3-4 hour mid-day weekend where we hired out a marquee, face painting, pizza truck, coffee stand to engage local community.

  • +1

    What is your centre offering that other centres aren't?

    Why should these customers bring their children from their existing centres to yours?

    What is your community profile like? Are you involved in the local community? Do people know who you are? How do parents know they can trust you with their children?

    Whilst you and your staff are twiddling your thumbs, I'd think of ways to get engaged in the community and let people meet and get to know you.

    All this discount fees etc hasn't worked so far and just sends a message of desperation and lack of value for what you are offering.

    Forget about all the dime store gimmicks.

    • Thanks for the feedback!

      The differentiating offering is something we thought about a lot and the key thing setting us part is parental support we offer, both for the children but also the parent to reduce the day to day admin.

      Staff are actually super exicted about getting out there to the local rotary club, setting up a table at the market or local supermarket to engage parents. So I wish we were all twiddling our thumbs but there is a lot of work to do!

      If you were a parent, where would you like to have seen a local centre engage with you?

      • We moved away from this idea

        Piggy back off a local school fete

        the key thing setting us part is parental support we offer,

        What does this mean?

        both for the children but also the parent to reduce the day to day admin.

        Hey?

        If I were a parent, I'd want to know what you're doing for my child.

  • Off the top of my head, I think I'd approach schools. Hold Fete's within their grounds. Become regular guests at Parent's & Friends Associations.

    Community events at local community centres.

    Some kind of event that starts and finishes at your centre? Some local cause/charity. Once they're at your centre, let them explore

    • 5klm run for homeless
    • knit a beanie/scarf day
    • care packages/food boxes
    • pony rides

    => get the local schools involved volunteering even if it means a fundraiser for the school.

    Stalls at shopping centres make me think of the Tupperware lady or dude trying to get me to sign up for electricity


    Target marketing

    Get names of 20 children and send them an invitation to attend on a set day "you have been specially selected"

    Maybe could use your stall at shops to get numbers….

    • These are some great ideas, let me get my planning hat on!

  • I'm wondering if some of your challenges are the time of the year?

    Wouldn't most people have their childcare sorted out at the beginning of the school year?

    Im thinking that you're going to have to go in one of two ways

    1) Really work out WIIFM what's In It For Me (them)

    Why should they choose your centre over others?
    => jump start ready for school? Give your child a head start…
    => hot meal (get a youfoodz fridge as well in foyer so parents can grab a healthy meal for family on way home)
    => heavily screened exceptionally qualified staff
    ==> open door policy
    => local bus pick up & drop off incl local primary school
    => swimming lessons
    => special visiting health professionals and workshops for kids and parents = occupational therapist = dietician = podiatrist = hearing = speech pathologist = educational psychologist
    => bunch of visiting sport examples to introduce kids & families to what's out there => TKD = Auskick = tennis = handball = sand pit games = little athletics .= t ball = hopscotch = ballet = circus school == fencing ==archery
    ==> library visit =>
    ==> story book dress up days
    ==> art & craft with mummy/whoever
    ==> cooking with mummy/whomever
    ==> kiddy choir
    ==> visiting musicians to intro kids => violin => Tamborine==keyboard ==> triangle ==> vocals ==didgeridoo
    ==> old McDonald's farm
    => indigenous story time and art lesson
    ==> grow your own garden bed
    = toilet training
    = manners /boundaries
    = effective communication
    = inclusivity

    Casual day care spots

    1. To get bums on seats this year, promote after school care and activities

    If you have rooms available to hire
    • Joey scouts
    • brigades
    • kumon centre
    • dojo
    • homework help/tutoring

    => basically get families with young kids used to coming to you

  • The issue I am getting is no one wants to send their children to a centre without kids (based on direct feedback from 12 centre tours done so far), so essentially we aren't able to get the ball rolling.

    Do you have their contact details? These are names for your target marketing. Do you already know which centre these kids attend? What can you do better than where they are?

    Even if they stay where they are and spend 1/2 day with you. I guess if you already have the staff on standby, may as well get them some kids to interact with => offer 20 kids 1/2 day free trial.

    We entered the industry with very ambitious goals

    Do you have any experience?
    What made you pick this industry?

    offering haircut, dental services etc…

    Don't go down this rabbit hole. Just creating opportunities for complaints.

    One untapped market is gifted children. Most parents think their children are exceptional, but gifted learners are really a thing.

    If you can get your head around this, learn how to present a curriculum suitable to gifted learners and train your staff accordingly, this is potentially a good selling point to differentiate you from your competition.

  • Did you research to see if there was a need before opening up a centre?

  • What's the demographic in that area? Are there many of the childcare age vs school age kids?

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