Nurseries much more than just child's play

There is a growing crop of childcare centres sprouting up across the UAE. But aspiring business owners eyeing opportunities in the sector should tread cautiously.

Blooming Buds has only about a dozen toddlers but Rana Boulos, who founded the nursery, is confident there will be a steep rise in attendees at the day school later this year. Fatima Al Marzooqi / The National
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Rana Boulos has only about a dozen toddlers dashing about her new nursery in Abu Dhabi.

But by September she is confident there will be 120 tiny tots playing in the jungle gym and finger painting in her Blooming Buds day school.

The small business, which opened in the embassies area of the capital last month, is just one of a growing crop of childcare centres sprouting up across the UAE.

"By September, I'm hoping to be fully booked," says Ms Boulos, a former teacher. "I'm relying a lot on word of mouth. I think the parents who are here are very satisfied, and whoever is coming to see the place is very impressed."

Ms Boulos, who charges about Dh7,600 (US$2,069) to Dh9,800 per term, has every right to be confident.

There are 311 nurseries in the Emirates, according to a recent survey by Arabian Child, an early-childhood consultancy.

Immigration of expatriate families, and the emirate's high birth rate, are factors fuelling the expansion of this sector. In 2010, the birth rate among UAE nationals was 33.1 births per 1,000 residents, while non-nationals had a birth rate of 12.6, the Statistics Centre reported.

Although competitive, the growth of childcare centres in other markets has led to the development of multi billion-dollar industries.

In the US, about 53,000 commercial childcare facilities earn total annual revenues of $20 billion, while another 21,000 non-profit organisations generate about $13bn, according to a report released in October by First Research.

In the UK, the industry is "volatile" but "rapidly growing", and is worth about £3bn (Dh17.34bn), according to data from IbisWorld.

"The number of people who want to get into this field [in the UAE] is growing," says Samia Kazi, the chief operating officer of Arabian Child.

"If you see this year even on the internet, there are more local websites talking about early childhood than there were in the last 25 years."

Local businesses in the Emirates say there is plenty of potential in this market. A couple who brought a franchise here from the US called Kidville opened their first school in July 2010. Last year, they launched two additional branches to take advantage of rising demand.

But growing a business in what can seem like a crowded landscape is by no means easy.

Ms Kazi warns it will become more expensive to set up and compete for the best nursery teachers in the next few years.

And the Ministry of Education is also paying closer attention to the type of programmes being offered. This year it will start categorising nurseries to give parents better guidance.

Starting up can cost from $500,000 to $750,000 with some childcare franchises. Ms Boulos discovered how tough it was launching her venture at the start of the year, as many parents had already put their children in other nurseries.

Finding space to open up a childcare centre can also prove difficult. It was a lack of villas with outdoor space on Abu Dhabi island that forced one of the city's oldest nurseries to look further afield.

Humpty Dumpty, which opened with just one child in 1989, and now has about 200, was the first nursery to open a branch in Khalifa City A, in 2006. Others have since sprung up.

"To be honest I can't keep up with [it]," says Kate Phillips, a director at Humpty Dumpty. "We used to advertise years ago but we don't at all now. We don't need to. Our nurseries are full."

Abu Dhabi's nursery boom started about three years ago.

"There seem to be plenty of children for everybody, which is good, because then there are different types of nurseries to cater for different families and different families obviously have different needs," Ms Phillips says.

The market may not be saturated yet, but experts warn that anyone who wants to enter the sector must be careful, especially if they have no experience in childcare.

Every entrepreneur needs a number of things to start a business, says Markus Reitzig of London Business School, which has a campus in Dubai.

The first is a good understanding of the industry, which will help them to put together a realistic business model. They also must have the skills to execute the plan, and they need contacts and other assets.

Outsiders may have cash and good contacts. And their unbiased view of an industry can even help them put together an interesting business model that is different from what is already on offer.

"But this will only work in combination with people who know the specifics and have the skills that are needed on the ground," Mr Reitzing says. "And often, this specific knowledge and these specific skills aren't commodities which are easily bought on the market."

Those who want to open a business in a competitive industry should strive to come up with an innovative offering, such as Kidville.

Monica Malhotra, the managing director at Kidville and a mother, believes importing an American curriculum in a country where British programmes are all the rage, has helped to fill a gap in the market and lured certain families.

Her facilities, which she runs with her husband in Dubai, are membership-based, with toddlers not only attending classes, but receiving discounts for haircuts, birthday parties and events, as well as accessing outdoor play spaces in state-of-the-art gyms.

Even so,she has found some unlikely rivals for business: other mothers and kids' groups that run informal classes but are not licensed enterprises. "There is definitely competition," Ms Malhotra says.

"I think the competition makes you want to continue doing what you can and focus on standards."

Similarly, Ms Boulos is trying to stand out from the crowd by offering unique features.

Her nursery offers a fully-equpped nursing clinic, as well as antibacterial flooring and a large outdoor playground with greenery.

"I'm not just opening for profit," she says. "It's a dream."

nparmar@thenational.ae

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