Building an early childhood education enterprise
QUESTION: MY daughter completed an early childhood education course and has worked for three years. Now she has decided that she would like to operate her own business, her father and myself has decided that we would give her some financial backing – $500,000.
Do you think that would be enough as a start-up? Would it be better if she did an entrepreneur course to have a better understanding before launching into such a venture?
I’d appreciate any tips and advice on this matter.
– THANKFUL BUSINESSWISE: Congratulations to your daughter on her professional accomplishments and to both parents for continuing to support her aspirations into adulthood. I’ve come across many young entrepreneurs who would have made incredible strides in business, and life generally, had they received the help and initiative you’ve offered and demonstrated.
My short answers to your questions are no and yes. No, $500,000 is not enough to start an early childhood operation, and yes, I recommend she completes an entrepreneurship or business administration course before launching this venture. I will explain my answers soon, but first let me share that just this week I overheard a conversation between two women bemoaning the closure of some early childhood education facilities in St Catherine in recent times.
The younger of the two women, who works at a leading financial institution, is now scrambling to find a preschool for her daughter because two of the more affordable entities she was considering have gone out of business. According to her, those schools were highly recommended by other parents, had good programmes and outcomes, great teachers, quality facilities, were loved by the children, and most important for her, were affordable. Interestingly, every institution the older woman recommended was either full, closed or “too expensive at this stage” for the young professional, who said her budget was between $45,000 and $60,000 per term.
Note her words ‘too expensive at this stage’. I found it fascinating because it suggests she’s unaware of the importance of the earliest stages of child development to educational and social outcomes later in life, and that ‘this early stage’ is actually most critical.
Although that young woman may not be representative of her target market, the conversation highlights some of the key considerations your daughter would need to contemplate in opening an early childhood institution or ECI.
These considerations include: the success or failure rate of ECIs in Jamaica and causes for same, the critical success factors for ECIs based on the intended target market, a deep understanding of the needs, requirements and likely spend of the target market, the viability of the business model in Jamaica, appropriate value propositions, the weight of referrals and word of mouth, and a deep understanding of her target customers, including the value they place on early childhood education.
$500,000 IS NOT ENOUGH
If the target market does not understand the gravity of a solid early childhood education, then they won’t assign the appropriate value nor budget the appropriate spend. This misalignment in value and lack of a large enough ready market can make or break the operations, because educating a market about your value is risky, costly and can take a long time.
This is just one reason entrepreneurship education is essential. The other reasons include the dynamism and demands of operating a viable business, which your daughter would not have been exposed to in her ECI studies, and which can sometimes be contrary to fulfilling the service of educating the most vulnerable in our society at a very delicate stage of development.
Can it really be profitable in our context? Should it be? And, if not, then what’s the best model to sustain such efforts and facilities.
Having reviewed the requirements for lawful registration of a ECI it is unlikely that $500,000 can cover start-up costs.
These requirements are prescribed by the Early Childhood Act and regulations extend to any facility that cares for four or more children under the age of six years, for longer than six hours, and includes nurseries, centres or homes which offer day care, basic schools, kindergartens, preschools, and infant schools and infant departments.
The requirements include a registration fee, a compliance report from the Jamaica Fire Brigade, and Public Health Department, good health certifications from a registered medical practitioner, food handler’s permits, a police record, copies of qualification certificates or proof of training, verification of training in paediatric first aid, names and job description of each employee, copies of the terms of employment and the floor plan, equipment and furniture in the facility, among many others.