Small, new operator

Good demand despite higher fees and shorter track record than rivals'

Teacher Connie Heng engages her charges with an activity at Eshkol Valley Preschool. The operator has 20 staff, including 10 teachers, and staff turnover is low.
Teacher Connie Heng engages her charges with an activity at Eshkol Valley Preschool. The operator has 20 staff, including 10 teachers, and staff turnover is low.ST PHOTO: SEAH KWANG PENG

If Mr Vincent Yap had entered the pre-school sector just a year later, he thinks it may have been "impossible" for him to set up his first childcare centre in Sengkang, an area with many young families and high demand for pre-school services.

The centre is now nearly full, but Mr Yap says some recent new policies make it tough for new players to join the pre-school market.

He and his wife opened their first Eshkol Valley Preschool there in 2012, just a year before the system of awarding Housing Board sites to childcare centres was changed to curb rental costs.

Initially, such sites were awarded to the firm that offered the most rent. This often sparked bidding wars. Under this system, Mr Yap secured the Sengkang site after bidding $35,000 per month.

In the new tender-evaluation process, the bid price makes up half the score, with the rest made up of other criteria, such as the quality of the services and the firm's track record.

But Mr Yap, 44, tells Insight this system "penalises new players" with no track record - a criterion that makes up 15 per cent of the total score.

  • ESHKOL VALLEY PRESCHOOL

  • COMPANY SIZE: Two childcare centres and a kindergarten

    FOUNDED IN: 2012

    At one of the centres...

    WHERE: Block 212A, Compassvale Drive

    FEES: $1,100/month for full-day childcare, after GST

    CAPACITY: 95 places; 90 per cent filled

"It's vital for the sector to be diverse so parents have more choices. If there are centres of only two brands near your home, but you dislike both, where else can you go?"

There could also be passionate pre-school staff who want to progress in their careers and run their own pre-schools, he says.

He and his wife, formerly a valuation senior manager and tax accountant respectively, did not have prior pre-school work experience. But they decided to enter the sector as they shared a love for children, a desire to have more work-life balance and to have a business of their own. They have four children aged four to 11, all of whom have attended Eshkol Valley.

He says: "It's a good business model. Our customers today are the customers tomorrow, and probably for the next two to three years. We can build long-term relationships with the families to nurture their kids."

Since 2012, the firm has taken part in four more tender exercises for HDB sites to set up childcare centres without success. But it managed to set up a childcare centre in an industrial estate and a kindergarten in a church.

Meanwhile, the Sengkang centre has more competition. There are about 15 other centres within a half-kilometre radius.

Despite it charging more - $1,100 per month after GST- and having a shorter track record than at least half its nearby competitors, 90 per cent of its 95 places are filled. It also received a quality certification from the Government last year.

Its staff turnover is low, too - only two staff members resigned in the past two years. It has 20 staff, including 10 teachers.

Senior principal Jacelyn Low left a large childcare chain to join Eshkol as a teacher in 2013. She says: "There was more structure and red tape there. But here, the bosses hear us and we have more flexibility to make changes."

Mr Yap says parents appreciate that the curriculum is values-based yet secular - the centre's name is derived from a Bible verse - and that fees for enrichment programmes are factored in at the start.

Engineer Bryan Tay, 38, has sent his two children to Eshkol, with the older one now in Primary 1. He was among the first parents who signed up in 2012.

"We weren't concerned if the pre-school player was small or new. We liked the physical environment. The windows are not covered up and I think the brightness makes up for the centre's slightly small size."

He also liked the teachers and how the enrichment programmes are "part of the whole package".

He adds: "There should be more government help for small operators. It's a pre-school I like, and I want more support for it, too."

Priscilla Goy

A version of this article appeared in the print edition of The Sunday Times on March 19, 2017, with the headline 'Good demand despite higher fees and shorter track record than rivals''. Print Edition | Subscribe