Are you restricting your business?

When it comes to keeping customers happy and providing services they need or want there are many factors to consider. We have talked about the need to understand customer requirements and really get close to them several times in our blogs, and indeed we have weekly conversations with childcare providers on just how to do this!

But, there are “other factors” to consider that you have control over and can change if you want to, particularly things like the boundaries and constraints you place on your childcare business and operations.

Operational constraints – Why do they exist?

Most businesses will try to deliver services in a way that attracts the amount of customers they want to remain sustainable and enjoy running their business. But, often childcare providers organize sessions, have set opening hours and generally deliver services in a certain way due to other influences than just trying to meet parental needs. Decisions on the operational constraints you set in your business can stem from many situations like…

· “We have always operated this way”

· “Staff don’t want to work another way”

· “We don’t open on Friday afternoons because no one wants that time”

· “We don’t take children under 3 years old”

· “We only take children from the age of 2 years and 9 months”

· “We only open term time because that’s what we have traditionally done”

· “We choose not to offer the 30 Hours free entitlement”

Some of the above examples could be driven by parental demand or linked to it, and that’s fine if you really have done your market research and can confidently say that your services replicate general parental need in the area. But they also show “Self-Imposed” constraints that are either there because, “that’s how it’s always been”, or because the decision to restrict the business in a particular way is for the benefit of owners, management, trustees or staff for whatever reasons that may be underlying such operational choices.

The problem with this is obvious, the more you restrict your business to the detriment of customer demand, the smaller your business becomes and sometimes this can lead to sustainability issues.

Customer responses to business boundaries

If, as a childcare provider you match delivery of your services to the current customer demand patterns, then you are likely to attract the most interest from local parents as you are essentially offering them what they want.

On the other hand, if you restrict key aspects of your business like, opening hours, times, sessions suitability, capacity, age ranges or delivery of the free entitlements, then you will inadvertently lose interest from some families and hence reduce the demand for your places.

This shrinkage in interest will subsequently affect incomes and profitability and in some cases make your setting less sustainable in the long term. Of course, this doesn’t mean you have to offer everything to everyone and be open all the time; there is an alternative approach to find a “niche” in your market. If you have done extensive market research and found that you can operate with your chosen constraints and still be profitable, then you have found a “niche” in your market which in themselves can be profitable and an option in terms of your business decision making, but only if you have a strong understanding of local demand choices that parents make and you know it can generate enough income!

Eliminating business constraints

The point of this article is to stimulate some critical thinking around the “artificial / arbitrary” boundaries you set in the operation of your business and how that affects access to services by parents. The main issue here is that there are two main types of constraints to deal with…

1. Constraints you place on your setting operations

• You have the power to change these!

2. Physical constraints

• Changing these are either not practical or outside of your control.

Any restriction you place on your business, by either conscious decision-making, or just because it’s traditionally how you have done things can be changed by you and your team.

Physical constraints like the use of rented accommodation means that choices like, extending opening hours or opening all year round, are decided by the landlord and will depend on the other parties using that building. So effectively some constraints are not moveable to try and match your offer to align with parental needs, so your business is limited in the changes it can make in these situations.

Summary

If you have very strong demand and your places are full to the occupancy levels you desire, then all is good! ...However, if you need to make an improvement to your incomes and sustainability, why not review your “self-imposed” constraints, you may find a few options that might just make the difference!