With the onset of the pandemic, the child care industry was one of the worst-hit industries. With plummeting enrollment numbers and children’s attendance, many child care facilities drew their shutter and bowed out across all the major cities in Australia. But the scenario started to change by the latter half of 2020. The attendance levels across various facilities rose to 80 to 100% of pre-covid times. Australian government declared the childcare industry as an essential service and pumped in a $2.6 billion covid relief package into the industry. With the help of child care brokers, many of the shuttered facilities headed back into business by 2021. With the Child Care Subsidy Activity Test Exemption, subsidised childcare facilities are now accessible to all strata of society. 2021 is a perfect time to transact into the childcare industry; the growth potential is multifold in the years to come. Here are few tips to consider if you are planning to own a long daycare centre, family daycare centre or any other childcare centre:
Know The Correct Value of The Potential Center:
Owning a childcare centre can translate into tieing up 60 to 80% of your net worth into your centre. So it becomes imperative to know the correct price of a potential centre. You need to consider various factors of the centre to evaluate and find the right price. On the facade, a centre may look worth a million dollars, but upon the correct evaluation by an expert, you would be shocked to realise that the centre may cost you only a fraction of a million dollars. Local childcare centre experts and brokers can help you determine the best price for a potential property. Along with the evaluation, these experts can also help you with childcare business consulting.
Know Your Financing Options:
As mentioned previously, owning a childcare centre can be a cash-intensive business. If you are new to the business, raising this initial amount may quickly become a daunting task that can lead to stalling your business plan of owning a childcare centre. There are a few crucial points to be mindful of while approaching lenders.
Do not settle for any investment that is lower than the ideal value. This can be disastrous, and raising funds once the business has started would become more difficult if you won’t make enough profits initially.
While choosing your financing option, keep a sharp eye on the interest rate. A very high interest rate can eat your profits and turn your business into a loss generating machine. Consult an expert on child care business to know the most suitable financing options available to you.
Know When to Exit:
The nature of the childcare business is such that without a proper exit plan, you would end with no return on your investment in the end. The capital invested in the facilities needs substantial time to appreciate. Hence, plan your exit strategy and plan well in advance. It is essential to know when to selling a business in Victoria and when to initiate the process of selling. You need to have extensive knowledge of the childcare industry trends to draw up your exit strategy.
The childcare industry has great potential in the coming years. With billions of dollars being pumped into the sector by various agencies, the future is definitely bright. But owning a childcare facility brings its own set of complexities and technicalities, which can be overwhelming for an inexperienced individual. Therefore, it is ideal to seek consultation from reputed child care brokers who can help you navigate these technicalities. With their exhaustive knowledge of the industry and with a massive amount of current and historical data, these experts will ensure that you get maximum return on your investment.