Private education is now a trillion–dollar industry. In Southeast Asia alone, spending for private education has reached nearly US$60 billion in 2015. This positive trend in education has impacted every stage of a child’s education, including preschool. For example, more than 99% of incoming primary one students aged 6 years attend at least 1 year of preschool in Singapore (Source: LIEN Foundation). 

In Southeast Asia, population growth, rising affluence, demographic trends, as well as cultural and economic shifts have resulted in the rising demand for early childhood education. However, governments and education businesses are struggling to fulfill the supply-side of this equation. 

Against this backdrop, the future of starting a preschool business has never been brighter. Opening a new kindergarten, day care or child care centre, however, isn’t as simple as opening a cafe or a boutique. Because this is your first time starting a preschool business, we’ve compiled a comprehensive guide to help you along.

Preparing a business plan for a new preschool

Every thriving preschool starts with an idea, a concept, and a plan. If your idea is the seed, the business plan will help you plant the seed to grow it into a fully-grown, mature plant. Before rushing ahead to execute your idea, it makes sense for you to lay down the framework for the steps ahead. 

Here are different aspects of your preschool business that you will need to research and understand: 

Positioning of business

  • What will your preschool business stand for? 
  • Why should families choose to send their children to your preschool over others? 
  • How will your curriculum shape the minds of students?

Competitors and industry trends

  • How many preschools are in your area?
  • What do these preschools offer in terms of enrichment, programmes, fees, etc?

Targeted customer profiles

  • Who are your ideal customers?
  • What do these potential customers look for in a preschool?
  • Where do they go for information?

HR and learning and development 

  • How will you recruit preschool educators?
  • Why would teachers want to work for your preschool business?
  • What will your HR department do to nurture you talented staff?

Preschool Curriculum

  • What modes of learning should your kids be engaged in?
  • What types of preschool syllabus should you model your preschool after (read our guide to preschool curriculum for more)

Financial plan

  • What is your overall budget to start a preschool business for 6 months?
  • Have you secured sufficient funds to start a preschool business from scratch?
  • If not, how will you go about securing adequate funds?

Operations plan

  • What are all the little things that need to be taken care of on a daily, weekly, and monthly basis to ensure your preschool business runs smoothly?

Marketing plan

  • What channels will you use to spread awareness about your preschool business?
  • What are your specific and measurable marketing goals?
  • What steps will your marketing team take to achieve these key performance indicators?

Choosing the right location to open a preschool

“Location, location, location!” as the age-old saying goes. As a key business serving the community, it is vital for your preschool to be located in an optimal location. 

In thinking about location, consider the following:

Competition

  • Where are all the other preschool business located?
  • Is there area with many homes but no preschool within walking distance?

Demographics of Customers

  • What is the average age range of adults in the neighborhood? 
  • Is the community relatively new and young?

Size of preschool

  • Are you opening a small home-based preschool (certain countries like Singapore do not allow this)?
  • Are you looking for an existing facility to rent?
  • Are you considering to build a new preschool facility?

Psychographics of Customers

  • How would you describe the lifestyles of young-middle aged parents in your area?
  • What are the values, opinions, and interests of parents in your area?

Availability of human resources

  • Is there a healthy mix of new and experienced preschool educators based in your area?
  • How can you hire these educators and other staff?
  • Are there current educational certifications that apply?

Ease of access

  • Is there a hospital/medical clinic nearby in case of an emergency? 
  • Are there parks nearby for students to play outdoors? 
  • Does your area have other areas of interest for children like museums?

Financial considerations for a preschool set up

Next, you need to consider how much funds you have to build your preschool, as well as the expected return. 

Ask yourself the following questions.

Start-up Capital

  • How much would you need for your initial build-up costs, eg renovations and rentals, furniture and fixtures, utilities, equipment, etc.
  • What is a realistic amount of funds that you can allocate towards different areas of your preschool business including HR, marketing, operations, and teaching staff?

Investors

  • Do you know investors who would be willing to put their name behind your brand?
  • What is the initial start-up capital needed? What percentage will you offer to investors?
  • How will you source for investors?
  • What will you say or do to convince investors to come onboard? Often a business plan would come in handy here.

Break-even analysis

  • How much revenue will your preschool business need to earn monthly to offset expenditure? 
  • What must happen to reach your goal (ex: the number of students who enrol in your preschool program)?
  • How will you sustain your preschool business if you’re unable to meet this target?

Fees to charge

  • What do other preschool businesses in your area charge?
  • What will you charge to remain competitive while also keeping in mind your revenue targets?

Sourcing and recruiting preschool teachers for your business

Human resource planning for a new preschool

Hiring the right people is the most important decision you can make for your preschool. As a people-centric business, the right educators and support staff can possibly make or break the reputation of your establishment.

Recruitment of preschool teachers

  • How many preschool teachers do you need to recruit? 
  • Where will you source candidates from?
  • What criteria will you use to interview and evaluate educators?

Training and development programme

  • What will your onboarding process consist of?
  • How will you measure success of employees?
  • How will you communicate areas of improvement?

Performance management

  • What will be your criteria when evaluating staff members?
  • How will you create a positive feedback process?

Building and Renovating a new preschool

As dedicated educational facilities for very young children, preschools need to adhere to strict standards and dimensions. Beyond following the guidelines imposed by educational bodies in your country, you need to also ensure the comfort and ergonomics of your kids and teachers.

Renovations, furniture, and fixtures

  • What are the dimensions of your furniture and fixtures?
  • Where will you order desks, chairs, etc from?
  • Who will you contact when preschool equipment breaks?

Classroom facilities and learning materials

  • What toys and books will you need?
  • Will all classrooms provide access to technology like smart TVs or interactive games?
  • Are your learning materials pitched at the right age and abilities?

Play facilities

  • What will the play area look like?
  • Will you need puzzles, sports equipment, or art supplies?
  • What about outdoor play areas? 
  • Do you have both wet and dry play areas?

Kitchen and Pantry area

  • How will meals be prepared and served?
  • Are there adequate cooking facilities?
  • Can you cater for different dietary requirements of kids?
  • What snacks will your pantry provide (classics like Milo or healthy organic fruits)?

Security requirements

  • Will you have smoke detectors or security cameras installed?
  • What are the security requirements in your area?

Insurance coverage

  • Have you compared insurance coverage options?

Operations management for a new preschool

In running the daily operations for your preschool, it is important to develop a Standard Operating Procedure or SOP. This should cover virtually all aspects of running the day-to-day operations of the business.

Most SOPs include the following:

  • Operating hours, opening and closing of premises
  • Attire for staff
  • Procedures for learning, play and field trips/ excursions outside the premises
  • Security and safety requirements
  • Handling of emergencies
  • Handling of cash, credit card and other payments
  • Health and wellness requirements

Conclusion

Has our Beginner’s Guide to Starting a Preschool Business given you enough food for thought? 

As exciting as it may seem to embark on your journey as a preschool business owner, your new endeavour comes with many risks and challenges. The first stage is vital: gathering competitor research, creating a preschool business plan, and mapping out requirements for different departments including Human Resources, Marketing, Finance, and Operations. 

With everything involved in bringing a new preschool business to life, you shouldn’t have to do it alone. Let our team of experienced preschool business consultants guide you every step of the way using tried and tested processes, the latest industry findings, and more. 

Contact our team today for a personalised consultation to see how we can help your preschool business take root and grow!