What Is a Childcare Feasibility Study?

If you are thinking about developing, buying or leasing an early learning centre, a feasibility study is one of the most valuable steps you can take before you commit. It is the difference between a hopeful guess and an informed decision. Below is a plain-English explanation of what a childcare feasibility study covers, why it matters, and what it can tell you.

What a feasibility study actually is

A childcare feasibility study is an independent assessment of whether a particular site can support a viable, compliant and well-utilised early learning service. Rather than asking “could we put a centre here?”, it asks the harder and more useful questions: “should we, how big should it be, and will it work financially?”

It pulls together several strands of analysis (demand, location, planning, capacity and finances) into a single picture so you can decide with confidence whether to proceed, adjust your plans, or walk away.

What a feasibility study covers

Demand and catchment analysis

The starting point is whether there are enough children, and enough unmet need, to fill a centre in this location. A catchment analysis looks at the population of young children in the surrounding area, projected growth, family demographics, workforce participation and the supply of existing and approved services nearby.

This tells you whether the market is undersupplied, balanced or already saturated. A beautiful building in an oversupplied catchment is still a difficult business, so this analysis underpins everything that follows.

Site suitability

Not every site that is available is a good site. This part of the study assesses the physical characteristics of the location, including land size, building footprint, outdoor play area, access, parking, drop-off and pick-up arrangements, and the surrounding environment.

It also considers practical factors such as visibility, traffic flow and how families will actually use the space day to day. A site that creates congestion or safety concerns at peak times can undermine an otherwise strong proposal.

Planning and approvals

A feasibility study reviews the planning context, including zoning, relevant overlays and the likely development and approval pathway. The goal is to understand whether a childcare use is permissible, what conditions might apply, and what hurdles you could face before you invest in design or commit to a site.

Planning requirements vary considerably between states and local councils, so this is an area where early, location-specific advice can prevent expensive surprises.

Indicative licensed places

One of the most important outputs is an indicative number of approved (licensed) places the site could support. This is shaped by the building and outdoor space available, the relevant regulatory requirements under the National Quality Framework, and the practical layout of the centre.

The number of places drives almost everything else (your staffing model, your revenue potential and your cost structure), so an evidence-based estimate is essential. Final figures are always subject to regulatory assessment and approval.

Financial viability

Finally, the study brings the numbers together into a financial model. This typically considers indicative fees, occupancy assumptions, staffing costs, lease or development costs and other operating expenses, to estimate whether the centre can operate sustainably.

We do not promise specific returns, because every project is different and the inputs vary. What a good model does is test your assumptions, show you the levers that matter most, and reveal whether the project stacks up before you spend serious money.

Why do it before committing to a site or lease

The most common and costly mistake first-time operators make is committing to a site, signing a lease or exchanging contracts, and only then discovering that the catchment is oversupplied, the planning pathway is difficult, or the achievable number of places is too low to be viable.

By the time those issues surface, you may be locked into long-term obligations. A feasibility study done early gives you the evidence to negotiate better terms, redesign your approach, or avoid a poor site altogether. It is a relatively small investment that protects a much larger one.

What a feasibility study tells you

At the end of the process, you should have a clear, evidence-based view of:

• Whether genuine demand exists in the catchment
• Whether the site is physically and operationally suitable
• The likely planning and approval pathway and its risks
• An indicative number of licensed places the site could support
• Whether the project is financially viable under realistic assumptions

In short, it tells you whether to proceed, with eyes open, or to keep looking.

This guide is general information only.

Talk to us

If you are weighing up a site or considering your first centre, we would love to help you make a confident, informed decision. Get in touch to discuss your project, or learn more about our feasibility studies.