A Guide to Buying a Childcare Centre in Australia

How to successfully procure a Child Care Centre. 

Love caring for and educating children? Thinking of buying a childcare centre? In order for the process to go smoothly, there are a few key things you need to consider. 

To help you navigate the buying process, we’ve put together this guide with 4 tips for buying a childcare centre. And if you have any additional questions, please don’t hesitate to get into contact with our experienced commercial property lawyers.

Overview:

• Individual vs franchise 
• Laws & regulations
• Financial position
• Services you’ll provide

4 Factors to Consider When Buying a Childcare Centre

1. Individual vs Franchise

The first step of buying a childcare centre is to determine what type of centre you would like to own. There are 3 options available:

1. Establish your own centre.
2. Buy a childcare franchise.
3. Buy a centre that is already successfully running.

Your next steps will be dependent upon the type of ownership you choose.

A. Your Own Centre

If you want to build your own centre, you should start by considering the following:

• The location: location is imperative to creating a competitive advantage for your business. In assessing the most advantageous location for your new centre, you will want to consider the ease of access from main roads and thoroughfares. It is also important to be aware of any competitors nearby, and the demographics of the suburb you are considering. 
• Building inspections: you will need to undertake the proper building inspections to ensure that the premises are both appropriate for your commercial needs and for the purposes of running a childcare centre.

B. Childcare Franchise

When buying a childcare franchise, there are several factors to consider. These include:

• How all of the compliance and legal regulations will be kept up to date and implemented on a regular basis.
• Who will be responsible for the continued licence of the business.
• Who will be responsible for the ongoing marketing of the business.
• The franchise’s education model and discipline philosophy (to ensure it aligns with yours). 

Speak to a franchise lawyer for specialist advice in this regard.

C. Existing Childcare Centre

If your goal is to buy a child care centre that already exists, you will need to review their current business dealings and profit statements to confirm that the business is viable. In this situation, you will want to:

• Confirm the number of children enrolled
• The cost of doing business 
• The expenses of maintaining or adding to your professional staff

2. Laws & Regulations

Once you have determined the type of ownership that is best for you, you will need to consider all of the rules and regulations that come with owning a childcare business. As a child care centre owner, your key responsibility is to the children you are entrusted with. This means you will need to look at:

• Compliance with national laws and regulations 
• Proper teaching credentials for yourself and your staff 
• Backgrounds checks to ensure that all staff are qualified to work with children 
• Business insurance
• Provider approval and service approval
• National quality framework
• Child protection laws
• Food safety requirements

The department of Education’s Early Childhood Education Directorate regulates early childhood education in NSW. If you intend to operate a childcare centre, you must apply to the Department for provider approval. Once you obtain provider approval, you must apply to the Department for service approval. Helpful information about approvals can be found on the education.nsw website.

The Australian Children’s Education & Care Quality Authority (ACECQA) works with Australian governments to ensure the implementation of the National Quality Framework. The National Quality Framework regulates and assesses education and care standards across child care services.

If you have any questions, please get in touch with our experienced commercial lawyers.

3. Financial Position

You will then need to turn your mind to the matter of your child care centre’s financial position. At the start of your venture, you need to consider the following:

• Do you have enough capital to invest in creating, purchasing or franchising a childcare business?
• Will you have enough enrollment to support the salaries of the necessary staff?
• How much will full insurance coverage cost per month for both employees and children?

• Day to day expenses including but not limited to; classroom supplies, laundry and cleaning services for the centre, replacement or repair of classroom furniture, funds for the purchase of new educational toys, games and small electronics.

4. Services You’ll Provide

The last step in buying a child care centre, is to determine what services you intend to provide. There are several options available, some of which include:

• Full day care facility: which allows for working parents to drop their children off early in the morning and pick them up after the close of business.
• Family day care: which can include providing services in your own home or at the home of your clients.
• Preschool services: which are not necessarily full time, but can include both kindergarten services or ‘two and three day per week’ programs.
• Occasional care services: which allows parents greater flexibility and use for particular circumstances.
• After school services: for children who attend a full day of school, but need to be cared for after school hours.

With each of these options, it is important that you honestly assess your interests and abilities. You need to choose the option that works with your strengths and gives you a competitive edge.

Additionally, all options require compliance with the national laws, rules and regulations of NSW and Australia, and careful research and consulting with a commercial conveyancer and lawyer is highly advised. In doing both your own research and seeking business sale and purchase legal advice, your dream of owning a childcare centre can become a reality.

For further information on buying a childcare centre, please contact the offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs so you can make informed decisions. So if you have any questions about how to buy a childcare centre or if child care centres are profitable, please call us at your earliest convenience to schedule a consultation at 1800 770 780.

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