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For anyone wanting to make some money and do good for society at the same time, starting up an early childhood service is commonly regarded to be an attractive business opportunity.  Any person, partnership, group or company can open an early childhood service in New Zealand, and providing the service meets regulation it will receive government funding.  As much as 50 - 80% of a service’s income may come from the government, with the remainder from parent fees and other sources such as donations and grants. 

If early childhood services have learnt one thing when the National-led Government reduced funding to services with more than 80% qualified teachers and changed eligibility criteria for access to support for provisionally registered teachers amongst other things, it has been that you can't always rely on a steady stream of revenue from government and that it can change quite quickly.  

Read this comment received by ChildForum for example:

A few people I know that were contemplating a preschool business have now changed their minds after seeing the Herald article (click here to read the NZ Hearld article). The article certainly told it as it was!  We do not really know what the funding will look like post taskforce recommendations, as I understand it.  It’s all a big and worrying mystery for our futures. As well as a possibility of having a funding cut to some services, there may also be a good positive funding increase to others? I am hoping that by the great service we offer that we may be in that latter bracket!!  (An early childhood education and care centre in Canterbury)

For many ECE services it would seem and feel like it is the end of the golden weather in funding and they must now prepare and brace themselves to withstand the storm. Smaller early childhood chains, and single community and privately owned early childhood centres along with home-based education are most at risk.  Larger chains operate on economies of scale in shifting staff between services, bulk purchasing of goods, advertising, etc., and usually do not fear cuts in funding.  In fact large ECE services can be quietly happy for funding cutbacks if this means less government intervention into their business. What they do fear is greater targeting of money and whether other early childhood services will get funding that they are not eligible for. 

Free Kindergartens have more protection than other services against any negative implications of a new funding system, because kindergarten staff are covered by the State Sector Act, and under the Education Act it is necessary for government to ensure sufficient funds for 100% qualified teachers in sessional kindergartens.

But what ever type of early childhood service you have it pays to be prepared for changes in funding and changes in demand for places which are influenced by governement policies, and be aware that if you do not position yourself well ahead of changes then you will face increased competition and struggle to maintain financial viability.   

These are times when it pays to be strategic!

The National Government has signalled it is more interested in a targeted approach to funding based on reaching low-income families and disadvantaged children.  As well, it’s very likely if the Government finds money to allocate to this that there will be a focus on the quality of ECE services and whether individual services are providing benefits associated with lifting educational achievement, improving social wellbeing or lifting our country’s economic performance.

Below is a list of areas you will want to look at as they are aligned to government objectives.  We give you 4 Top Tips for how to succeed in an increasingly difficult climate.  

With this knowledge it is more likely your early childhood service will continue to bathe in the golden weather rather than being tossed about in the storm and left scrambling to catch up with other services. So keep reading this article and find out more ...

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