With the growth and development of economies in Asia, parents are investing more of their hard-earned cash in their children’s education. Demand for quality preschool education is rising in the region, and with this comes opportunities for preschool operators.

While starting a preschool may sound exciting, it can also be a harrowing experience for first-time business owners. As preschool consultants with decades of successfully running and managing preschools, we’ve had our share of hard knocks and learned what mistakes to avoid.

To run a successful preschool business, you need to avoid the common mistakes which new preschools make. What are these mistakes and how can you avoid them?

Let us look at each of them below.

MISTAKE #1: Not Having a Preschool Business Plan

Everything starts with an idea, and from an idea comes a plan.  Once there is a clear plan for your preschool business, you’ll have goals to work towards, and a path for execution.

Collating your research and thoughts into a document will help you fine tune your preschool business.

Your business plan should include the minimum of the following:-

  • The type of preschool you wish to start
  • The business model for your preschool
  • The target market
  • A description of the preschool services/options you are offering (this may include the programmes you are offering, the age group, proposed locations or type of locations, etc)
  • Operational and management roles
  • The financial plan and business costs, and revenue projections.

Here are some assessment questions to help you create a preschool business plan:

  • Who are your target families?
  • What are their needs and wants when it comes to providing their children with a preschool education?
  • What is the location of your preschool?
  • Do you know your competitors?
  • What differentiates your preschool business?
  • How will you attract customers?
  • How will you grow your preschool business?
  • What is your preschool curriculum?
  • What criteria will you use to hire preschool teachers?

A business plan for your preschool should lay the groundwork for the next 3-5 years and serve as the cornerstone of your vision as you move forward.

MISTAKE #2: Choosing the Wrong Preschool Curriculum

Often, parents judge the quality of kindergartens and childcare centres by the rigor of its educational programme. There are many types of preschool curriculum  around, all offering differing benefits. It is important to think carefully about which curriculum you wish to have in your preschool.

You may choose to have a hybrid or combination of curriculum, and this is fine too. However, we do warn readers about trying to incorporate too many different learning approaches as doing so may be confusing for the children, the parents and the teachers! Choose a curriculum that you believe in, and that you have a team that can execute well.

Learn more about what to include in your preschool curriculum.

Interview and hire the best preschool teachers for your students
Interview and hire the best preschool teachers for your students

MISTAKE #3: Not Hiring the Right Team

It is important to hire the right team – the leaders as well as the teachers. While it is important to hire for qualifications, it is equally important to hire for attitude. Once the right preschool teachers have joined your school, remember to nurture their professional growth by:

  • Offering professional development training courses
  • Creating opportunities for feedback and encouraging continuous improvement
  • Looking for applicants who are able to commit to long-term employment
  • Placing importance on education, experience, and references
  • Understanding their educational philosophy, beliefs, and priorities
  • Observing how they interaction with different types of children

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MISTAKE #4: Not Charging the Right Preschool Fees

Do you know what other childcare homes and centres are charging? Most new preschool owners literally leave money on the table by not setting their rates properly. You’ll get short-changed by charging too little, and if you charge too much, you won’t get any clients!

So how do you go about figure out what to charge?

This process involves researching the preschool markets in your town. Set aside time to make some phone calls or visit other childcare businesses. After your research, you will learn how to set your prices appropriately while remaining competitive.

New preschools may make the mistake of charging the same weekly rate for each child, regardless of the child’s age. However, if you talk to centres in your town, most of them charge the highest rate for infants, and the lowest rate for older kids. This is necessary due to the lower staff-to-child ratio (1:5) compared to toddlers and kindergarteners (as much as 1:25). (Read the guidelines for Singapore preschools here.)

A good way to run your preschool profitably (and sustainably) is to consider the following factors in establishing your preschool fees:

  1. The number of children you can accept, based on space and capacity
  2. The number of preschool teachers, caregivers and other staff you can hire, bearing in mind the staff-to-child ratios that you should consider
  3. The monthly operating costs of your preschool – from staff costs, rentals, utilities, food supplies, educational materials, telco bills, maintenance, and others
  4. What the competition is charging for their preschools, and how yours compare

Small adjustments like this in your price, if it makes sense based on your local area, can make all the difference in your take-home profits at the end of the day.

Beyond your fee structure, you should also work out your financial plan,
determine your cash-flow, and analyse your break-even numbers. It is also important to consider what parents in your target market are willing and able to pay to send their children to preschool.

 Preschool SOP and operations manual for teachers and students

Preschool SOP and operations manual for teachers and students

MISTAKE #5: Failing to Develop a Preschool Operations Manual

A preschool operations manual or Standard Operating Procedure (SOP) should cover every aspect of running a preschool business, from hiring staff, managing equipment and security, to caring for sick and injured children.

In short, it articulates the essential procedures necessary for the smooth daily operation of the centre.

Typically, preschool SOPs include the following:

  • A system for allocating available places for enrolment
  • Clear policies on fee payment, trial period, and refunds
  • Assessment of child abuse and child protection procedures
  • Administration of medication and management of sick children
  • Management of children’s behaviour
  • Crisis management covering fires, accidents, and outbreak of communicable disease

Beyond the centre’s SOP, your preschool should also have a staff or HR policy manual. This should be focused on expectations for preschool teachers and cover:

  • Recruitment
  • Job descriptions like qualifications and work experience
  • Job responsibilities and duties
  • Reporting structure
  • Employee benefits (sick leave, annual leave, yearly medical check-ups, insurance, and compensation)
  • Staff appraisal system
  • Disciplinary procedures
  • Rewards
  • Resignation
  • Termination
  • Employee grievance procedures
  • Professional and ethical codes of practice

MISTAKE #6: Failing to Market Your Preschool Business

A preschool business thrives on its reputation in the market, but reaching the first cohort of parents is no easy task. That’s where marketing comes in. To get your preschool going, you’ll need to get the word out and increase awareness.

Begin with branding and communicating your unique selling proposition. Will your preschool provide children with nature-based programmes in unique outdoor play-spaces? Perhaps your programme provides organic meals and healthy snacks. Or your preschool may promote an eco-friendly, paperless environment.

Whatever it is that makes your preschool programme special, make sure to emphasise it front and centre in your marketing content.

When marketing your preschool business, consider creating engaging educational content amplified through digital channels:

  • Create a website with an active blog
  • Submit guest posts to garner interest from community pages and forums
  • Grow a follow on social media
  • Create an email newsletter targeting parents in your vicinity
  • Drive traffic to your website through digital ads and campaigns

Good marketing takes equal parts of creativity and analysis to constantly improve outcomes. Make it a habit to track your marketing budget, monitor the impact of your marketing collaterals, and test different types of messages as well as visuals.

Initially, you may see fluctuations in enrolment numbers. By understanding which marketing channels work relative to those which don’t, you’ll successfully adjust your strategy to drive more interest with less marketing effort over time.

A few metrics to monitor include:

  • Number of school tours
  • Number of enquiries
  • Enrolment numbers
  • Number of renewals
  • Number of referrals

Conclusion

If there’s one key takeaway from reading this article, it’s the importance of doing comprehensive research and creating a Preschool Business Plan. Your plan is your roadmap, and with the right structure, ideas, and goals, every other aspect of your preschool business can flow smoothly.

You’ll stand a higher chance of success by avoiding the top 6 mistakes that most new preschools make.