Grow your Nursery Business by Expanding Overseas
Expansion overseas presents a number of opportunities, amongst them business growth, enhanced returns and profits, ‘legacy’ expansion, corporate social responsibility ambitions and brand exportation.
Independent education has long had its place in Asia, and more recently early years provision has received increasing consideration and focus there, too.
Western education is highly sought after across South East Asia, by parents who have high aspirations for their children, and with investors, developers and entrepreneurs identifying gaps in their countries and local markets – in part due to changing trends, increased demand and lack of supply/specialist early years knowledge – more and more overseas opportunities for UK and European providers are becoming available.
Western organisations, including many well-known, and indeed less well-known, nursery groups and sole traders have shown interest in expanding their businesses into the Far East market.
Expansion overseas presents a number of opportunities, amongst them business growth, enhanced returns and profits, ‘legacy’ expansion, corporate social responsibility ambitions and brand exportation.
Choose your route
Expansion for nurseries and preschools can be realised through several routes: direct investment, joint venture, management contacts, franchises, and/or licences. Each route to entry requires a clearly defined and well-researched strategy, with clear regard to the logistics, risks and opportunities of what, where, when and how.
The business’ intended structure and the objectives create the foundation of the expansion strategy, and market research will allow for consideration of economic, demographic, political and regulatory landscapes as well as guide the rationale for location and selected countries.
As networks and relationships form, a pipeline of potential partnerships can be identified, and opportunities created, thus the implementation of your expansion strategy can formally commence.
Overseas expansion for nursery providers, especially sole traders, is a less well-travelled path compared to the international schools sector. Looking specifically at China, the Chinese government has increased the budget for education and plans to boost the penetration level of preschool education before 2020.
Investment capital in the education market is growing sharply. The market share of private preschools is set to significantly increase due to lack of supply and strong demand for a wide range of reasons, including the end of China’s one-child policy. As a result, demand for highly qualified early years teaching staff will grow rapidly, but staff recruitment can be incredibly challenging. Adding pressure to this, many parents prefer nurseries providing both a Chinese and bilingual curriculum.
Find a partner
When considering overseas expansion it is essential to partner with a reputable and trusted ‘partner’, as this will mitigate some of the risks that overseas business exports can face.
Both parties’ vision, values and culture must be aligned. An experienced and well-connected local partner will aid the partnership in the provision and identification of land for development, addressing obstacles in planning, development and permission from local government, and oversee and potentially fund the development and so on, depending on the nature of the agreed business structure.
Across China, major developers have entered the education markets to introduce high-value international education into their high-end residential projects – these include property developers Vanke and Country Garden.
Very highly regarded educational establishments, including Dulwich College and Wellington College, have, via partnerships, exported overseas and developed their presence in China, as have, in the early years nursery sector, Busy Bees Nurseries and British Early Education.
Alongside activity in China we have witnessed a significant increase in interest in early years education opportunities coming to the fore across a wide number of Far Eastern counties, including Malaysia, Indonesia, Philippines, Vietnam and Cambodia.
Christie & Co is working with multiple nursery groups, developers and investors all keen to create new successful and sustainable partnerships in exporting and importing British early years education, via the EYFS, interlinked with local curriculums, to meet the increasing level of demand from parents.
Courteney Donaldson is Managing Director, Childcare & Education at Christie & Co. Christie & Co has provided valuable advice to clients within its specialist sectors for over 80 years. The business was established in London in 1935 and has successfully expanded to provide professional brokerage and advisory services throughout the UK and across Europe. As well as deal brokerage, structuring and financing, its professional services include: valuations, consultancy, insolvency services, investment guidance, feasibility studies and advice on rent reviews, building surveying, dispute resolution, rating and development.
