Profit, Purpose, and a Promising Future Investing in Childcare

The Profitability of Owning a Childcare Service

By BEST Childcare Consulting

When you purchase a childcare centre, you’re not just buying a business — you’re securing a reliable, scalable asset that builds long-term wealth and contributes to your community. Many centres operate on owned land or secure leases, offering investors the benefit of both operational profit and property value growth.

While many small businesses rise and fall with changing trends, the early childhood education and care (ECEC) sector continues to grow — supported by strong government funding, consistent family demand, and a national focus on quality education. Childcare services are recession-resistant, community-driven, and financially resilient.

Across Australia, typical profit margins for childcare centres range from 10% to 20% of revenue, with well-run services often achieving returns (ROI) of 25–30%.

Imagine owning a business that delivers both meaning and money — where every dollar earned also makes a difference in the lives of children and families. That’s the power of investing in early childhood education: an opportunity that blends financial strength with social purpose, giving you both a stable income and a legacy to be proud of.

Purpose Meets Profit

If you’re looking for a business that combines purpose with profit, few industries offer the same long-term stability, government backing, and social relevance as early childhood education and care.

While many small enterprises—like salons, cafés, or retail shops—depend on consumer trends, childcare operates within a structured, government-supported framework built on family need. Families will always require quality education and care for their children, making this one of Australia’s most dependable and meaningful investment opportunities.

Why Buying a Childcare Centre is a Smart Investment

Childcare centres typically achieve profit margins of around 12–20%, with well-managed services performing even higher in the right conditions. Well-run centres (with high occupancy and strong fee structures) can target returns (ROI) of 25–30%.

By comparison, many small businesses — such as personal services or retail — often operate on slimmer margins of 5–10% and rely heavily on the owner’s daily presence. In contrast, a childcare centre offers a structured business model supported by the Child Care Subsidy (CCS), creating predictable and sustainable income streams when managed effectively.

But investing in childcare is more than “buying a business.” You’re purchasing an asset with community value, tangible infrastructure, and long-term growth potential. Whether you own the property or operate under a secure lease, the underlying model is built for stability and appreciation.

Of course, profit doesn’t come by chance — it’s earned through quality management, strong occupancy, staff stability, and regulatory compliance. A thriving childcare centre grows because it’s well-governed, well-led, and well-supported. That’s where experienced advisors like BEST Childcare Consulting can make all the difference.

While it may take more preparation than opening a shop or salon, the long-term financial and social rewards are far greater. You’re not just investing in a business — you’re investing in children’s futures and a sector that continues to expand year after year.

What the Numbers Say

According to Smart Business Plans Australia, many childcare centres achieve gross profit margins of around 10–20%.
Finexia reports that well-run centres (with high occupancy and strong fee structures) can target returns (ROI) of 25–30%.
A 50-place service at 90% occupancy might generate approximately $250,000 in profit per year before taxes and reinvestment.
However, Childcare Sales Australia cautions that wages and rent are significant costs, meaning profit margins can narrow if occupancy drops or expenses increase.

What This Means for You in Practical Terms

When assessing a childcare service to buy or build:

Estimate revenue: licensed places × average occupancy × daily fee × operating days.
Estimate expenses: wages, rent or mortgage, utilities, consumables, insurance, compliance, and administration.
Subtract expenses to calculate profit before tax, then consider reinvestment, reserves, and risk.
Because childcare income is often subsidy-supported, your upside comes from maximising occupancy and controlling costs.
If occupancy or cost control slip, margins will tighten—so success relies on operational excellence and strong leadership.

Example Scenario

Suppose you purchase a service with:

60 licensed places
85% occupancy (≈ 51 children daily)
$110 daily fee
240 operating days per year

Your approximate annual revenue = 51 × $110 × 240 = $1.35 million.
If your profit margin is around 15%, your annual profit could be ~$200,000.
At 25% efficiency, profit could approach $330,000 per year.

Realistic Considerations

Childcare is a highly regulated industry with strict staffing ratios, qualification requirements, and safety standards. These ensure quality and child safety, but they also affect costs.

Key risk factors include:

Staff wages (usually 60–70% of total expenses).
Location and demographics, which influence enrolment and fees.
Rent, utilities, and maintenance costs, which vary by region.
Regulatory changes or compliance gaps, which can delay approvals or lead to penalties.
Goodwill and purchase price—always check if ROI justifies the valuation.

Tip: Use ATO Small Business Benchmarks – Child Care Services to see how the centre performs against national averages.

What This Means for You as a Buyer

When you’re ready to purchase:

Request historical financial statements (last 2–3 years).
Review occupancy trends, fee structures, and wage costs.
Model “what-if” scenarios—e.g., 10% lower occupancy, 5% higher rent—to stress test profit margins.
Evaluate ROI and yield before committing to the purchase price.
Seek professional guidance for compliance, staffing, and approval processes.

Explore More from BEST

For deeper insight into owning and operating a successful service, explore related BEST articles. Each article is designed to empower investors, leaders, and educators with clear, actionable knowledge—helping you make confident, well-informed decisions every step of the way.

Final Thoughts

Owning a childcare service is both a business and a calling — one where financial growth and community benefit work hand in hand. When managed with integrity and supported by expert guidance, it’s an investment that offers profit with purpose, delivering returns you can feel proud of. BEST Childcare Consulting helps you achieve that balance — ensuring your childcare investment is compliant, profitable, and deeply rewarding.

How BEST Childcare Consulting Can Help You

At BEST Childcare Consulting, we specialise in helping future owners, investors, and approved providers navigate the complex path from interest to ownership. We can even find the perfect centre for you to invest in.

Before You Buy

Assess the financial and compliance health of existing services.
Support your Provider and Service Approval applications.
Review lease and licence agreements for compliance risk.
Help you prepare policies, QIP documentation, and governance systems to meet ACECQA standards.
Provide business-readiness training for new owners and managers.

After You Purchase

Offer compliance induction and mentoring for your leadership team.
Assist with staffing, ratio compliance, and policy implementation.
Conduct mock Assessment & Rating readiness checks.
Guide you through the first 3–6 months of operation to strengthen profit margins and quality outcomes.

Our goal: to help you buy and build a profitable, compliant, and community-minded childcare service — one that delivers long-term value for both investors and families.