Having the knowledge and understanding of the childcare market is vital for you to succeed in your business. Therefore, you must carry out market research to obtain local information about childcare demand and supply.
What do we mean by demand?
This is about understanding the needs of your local community, by understanding the demographics of your area; what local families need and realistically require.
What do we mean by ‘supply’?
This is about considering various factors such as breakdown of the number of childcare providers in the local area; number of places they offer’; the range of services they offer; what flexibility they provide; the quality and Ofsted outcome and pricing structure.
To do this you have to find out more about:
- who are your potential customers and what are their childcare needs?
- who are your competitors (existing childcare providers) and what services they offer?
This information will enable you to plan your services in terms of scale and also help you to tailor your services in terms of the various other factors stated.
Carrying out market research is essential for people who want to start a new childcare business and, as the market is continually changing, it is also important for people who are looking to buy an existing childcare business to carry out some independent market research. All childcare businesses should update their market research regularly and, if necessary, take steps to review of their services in line with the changes in the market.
Note: market research is different from marketing which is covered under a separate section.
What can I use to help with my market research to determine demand and supply?
- The Childcare Sufficiency Assessment (CSA) and Market Position Statement (MPS) for funded places
The CSA has detailed information about the number of children in the appropriate age group, the number of childcare settings and number of childcare places. The MPS section has information on funded places and shows the indicative gaps or surpluses of funded provision, at ward level, for all areas in the city. View the early years childcare strategic information
- My Choice directory of local childcare providers
The post-code search function will help you get information on existing providers in the locality including their Ofsted inspection gradings, service details and prices if published. View the childcare directory section on MyChoice
- Customer Research: You can use Questionnaires or Surveys either online or paper based to collect demand information from local families.
- Existing providers can also analyse, monitor and follow-up enquiries from parents.
- Secondary information: Apart from the CSA you can also find out about any other available research on new housing developments, new businesses, and emerging demographic trends.
The following websites provide further information and useful tools and resources.
PACEY: Meeting local need (Pacey membership required to access content)