Market Research in Childcare

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Market research is important when thinking of opening a day nurseryIt’s important to find out whether there is enough demand for a day nursery in your area. Many nurseries have struggled over the past year and the rise in childcare fees has also caused many parents to be unable to afford childcare for their children.

Be aware that in some places demand for childcare places has not kept up with the number of new nurseries opening – many of which are state funded nurseries or day care centres. As a result, the sector is very competitive.

You will face competition from:

– other day nurseries
– childminders
– playgroups, crèches and out-of-school clubs
– local authority nurseries and day care centres
– primary schools offering nursery education to three and four year olds
– extended schools offering wrap-around care themselves
– nannies
– subsidised workplace nurseries

It’s a good idea to check out the competition in your area to identify how many other day nurseries and other childcare providers are already operating. Some of these will be listed in the Yellow Pages and other business directories. You can also contact your local Family Information Service (Scottish Childcare or the Early Years Team in Northern Ireland) to find out more about existing childcare services in your area. The childcare finder tool on the Directgov website lists childcare providers in all parts of the UK.

Have a look at existing day care providers to see:

– what are their opening hours – are they open for 52 weeks in the year?
– the age groups they cater for
– the services and activities they provide
– the facilities they offer – for example an outdoor play area
– the fees they charge
– the type of meals and snacks they offer
– whether they offer both full and part-time places
– if they are flexible over dropping off and collection times if parents need it
– do they offer local authority funded places for two, three and four year olds

Look closely at the type of people who live and work in the area where you propose to open your nursery. Are there plenty of young families? If there are, do both parents work? There might be many single parent families that would welcome an opportunity to work if they could find affordable childcare.

Are there lots of businesses in your proposed area? Working people might find it more convenient to use a day nursery close to their workplace.

Why will parents choose your day nursery

It’s important to make sure that enough people will use your day nursery rather than other day care providers. Your market research might indicate that there is a gap in the market that your nursery could fill – for example, providing childcare during ‘unsocial’ hours for parents with irregular working patterns. You could contact your local authority (early years and childcare service) to find out if there’s any funding available to create new childcare places – for example, for a particular age group or at a certain time of day.

Find out what parents want

Try to talk to as many parents as possible to find out:

– what they would like a day nursery to provide – discuss opening hours, flexibility and activities
– if there are any gaps in the existing childcare available that you could fill – like after school clubs
– whether they are satisfied with current childcare options in the area – if not, what specifically are they unhappy with
– what they consider would be a reasonable fee to charge

Use Alliance and Leicester’s Market Research Day Nursery sheet to help you track progress with your market research.

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