How To Determine An Area's Child Care Market Need
How To Determine An Area’s Child Care Market Need
If you are thinking of beginning or expanding your child care program, there is a great deal of information you need to collect. Know going into the research and development phase, that the information gathered will guide your decisions as to the need for child care, the type of program to meet that need, and the development of your business plan. This article focuses on the Market Research needed and research methodology.
Remember A Child Care Business Plan Includes:
- Market research to support your plan
- Site Needs Assessment (this directs the type of facility and space requirements)
- Financial Planning for the first 3 years
- Budget for at least the first year (include Revenue and Expenses).
- Child care philosophy and mission
- Regulations for state, county, local licensing
- Marketing Plan
- Policy and Procedure Manuals for both staff & parents
To determine if an area will support a child care program, you have to do your homework and research current conditions and potential competition. Here is a simple method to follow and suggested contacts to make.
Call your Early Learning Resource Center (ELRC) to determine the following information:
- How many licensed programs are currently operating in the area you are targeting?
- What type of programs and how many of each are currently in business in the area?
- The type of programs, include Family, Group, Center.
- How many religious and preschool programs are in the area?
- How many Head Start Programs operate in the area?
- What age levels does each type serve and what time of day do they each operate?
- What is the number of families on TANF, Child Care Subsidy, and non-subsidy in the area?
- What is the enrollment for each? What kind of waiting list for care exists and why?
- Will you serve children from families who receive some form of subsidized funding? If the answer is “yes”, then you need to sign a Provider Agreement with the ELRC organization(s) for the type of ages and care you would like to serve.
There is a wealth of research information on the population of the area that you can gather from your library or from the Census office, Penn State Data Center or your County administrative office. Here are some of the critical factors to consider…
- Assess the total number of people, total number of single-parent families, two-parent families, two-parent working families and the ages of their children.
- What are the family income levels?
- Develop a grid that will indicate the number of children of working families between the ages of 0-3, 3-5, 5-8, 8-11, and 13.
- Stop here and look at the answers to your demand questions. You should start to get a feel for the demand for child care in a certain area and the ages that your program might best serve.
Continuing on, check with your local Chamber of Commerce to see 1) the number and types of businesses (example: manufacturing, hospitality, health, etc.) that opened within the last 3-5 years; 2) the number of employees on staff. Also, inquire about the number of businesses that closed in the area within the last 3 to 5 years. Are any businesses planning on opening within the next 6 months - 3 years? If so, what type of business?
Find out the hours and days of operation for each business. This will help you in scheduling or developing a niche market for your child care service hours. This information must be linked with the psycho-graphic information from parent surveys on the type of care they want and why.
Survey families through churches, schools, or local businesses to see the type of child care they currently have and why; what would they like to have; and what do they value most in child care for themselves and for their children. Ask parents what problems, challenges or concerns they have with child care. (Finding out concerns and what parents value and why can help you structure your program plus help you develop a marketing plan and promotional materials.) Assess the desired location for child care — near the office, home, school or other.
Survey businesses to assess what problems employees and/or supervisors are reporting or “dealing with” as relates to child care. What plans does the company have for shift work, odd hour work which could impact child care? Find out what level of interest the company might have in partnering with your program. Partnering can range from providing space on-site to financial support, or child care benefit programs.
If you intend to serve the child population whose care is subsidized by the State, you may want to survey the major employers of parents who receive child care assistance. Your ELRC has a listing of these major employers. Note: these businesses may not be aware that their employees receive subsidized child care.
Updated by PACCA 2020