At Childcare Sales , we are often approached by people who enquire about the cost of a business and then ask themselves the question, “Maybe it would be cheaper to start my own childcare business rather than buy one”.
Whilst, in theory, starting your own Childcare business sounds exciting, invigorating, and melting with positives, the reality is actually quite different. In the childcare sector it is going to get a whole lot harder to do a new start-up with the proposed ‘Network Management’ regulations being introduced by the Ministry of Education from 1 August 2022.
Network Management will require any person or entity wanting to establish a new licensed early childhood service to apply for the MOE’s approval that a proposed service is needed in a particular network/ suburb. If they do not grant the approval (may last up to 2 years) the property cannot be licensed and in future it would be logical for developers and landlords to seek this pre-approval before the resource consent application, an extra layer adding costs & time with no guarantee of success that can create a dis-incentive for future builds.
This change will have positive benefits for existing childcare centres to desaturate areas with an oversupply as it will ensure new competition is only built where there is demand for more childcare.
If you are in the market to buy a centre, now may be an optimal time to do so as the economics of supply and demand are likely to take effect post 1 August 2022.
More information on the Network Management function is available on :