Does anyone have experience running childcare centres in Australia?

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February 06, 2023

by a searcher from London Business School in London, UK

Looking to potentially acquire a couple of established childcare centres in Australia. Does anyone have any experience / advice on whether this is a profitable business? What are some of the risks I should be aware of?

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Reply by a searcher
from University of South Australia in Adelaide SA, Australia
My immediate reaction:

+ Strong and evergrowing demand
+ Accreditation and qualifications are a good moat

+- We’re likely to see education for 3+ year olds early childhood education become compulsory, or at least more formalised. This will bring more demand, but also new government and NFP market entrants

- Low margins, especially given you are competing with a lot of NFPs
- Huge staff turnover, leave for kindgarten / primary school teaching or extended parental leave
- It is mostly a real estate development play, making it ill-suited for searchers
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Reply by a searcher
from Harvard University in Philadelphia, PA, USA
Hi there. No experience or connections in the childcare industry, but I do recall the father of someone I went to highschool with owned ABC Learning Centres and seemed to be well off. I do remember a number of issues arising from their profitability mostly stemming from tax rebates and they may have gone into receivership (don't quote me on that, just a vague recollection). With that said, labor laws in Australia usually lead to higher wages for workers which can affect profitability.
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