Yaneek Page | Viability of a nanny service in Jamaica
QUESTION: I am a 43-year-old single mother and a university graduate who, for years, has searched for a business idea and finally came up with one when my son was ill. I always look forward to reading your articles and I appreciate the insightful advice you offer. My son is a three-year-old preschooler who became ill on several occasions and had to be out of school.
There was one point when I could not find anyone to stay with him and had to stop from work for a week until he was well. As a result of his, I got the idea for a ‘nanny care’ service. This business would be to have the service of either a nurse or a childcare practitioner who would go to the parents’ home and stay with the children.
I am not sure which professional I would bring on board. My other concern is since this venture would not be a physical facility, I am unsure of how to get this idea started. In addition, the average weekly rate for a preschool is $7,500.
With this price, I am thinking, what rate could I charge that would be able to cover cost, to the professionals and still make a return, especially since some parents may only need the service for a day. My target market is single parents at all level of society. I look forward and I am excited to hear from you on your invaluable insight.
– Single Mother
BUSINESSWISE: Thanks so much for your kind words. I am glad this column has been providing valuable content for you. I’ve condensed your email into three questions:
l Do you hire nurses or nannies?
l How would you launch a business with no physical location?
l How do you price the service?
The decision to hire nurses or nannies should be driven by what the market wants, the liability or exposure they are willing to accept, and how much they are willing to pay for this value. It’s not a question either of us can answer without some tangible investigation of the actual target market.
In this environment, you will want to pay close attention to their views on having a stranger in their home as that is likely be a major concern in addition to affordability. By tangible investigation I mean interviews, focus groups, or questionnaires administered to your revised target market.
I’ve used the term ‘revised’ while you are aiming to serve all single parents at all levels of society, I suspect most may not be able to afford this service. It is estimated that 50 per cent of Jamaica’s children rely on government assistance via the PATH programme to attend school, that is, their caregivers need financial assistance to meet the basic needs of nutrition and transportation.
That figure may be even higher as eligibility and enrolment is not automatic. That means not all who apply to the PATH programme are successful. You can access the data I just outlined, and more, from the Planning Institute of Jamaica, the Ministry of Education, and from the Ministry of Labour & Social Security, which administers the programme.
Review your data
Once you have reviewed the data, I want you to narrow your prospective target market based on a more robust estimate of real demand. It may be that you expand your target market beyond single parents. In crafting the service you will want to consider the ‘MVP’ approach, which stands for minimal viable product, and involves crafting your service with the bare minimum features to satisfy early customers so you can learn from their feedback and tweak your offerings quickly to meet market needs.
The MVP approach will save you time and money and allow you to better satisfy the customer to enhance stickiness. Stickiness is a common term used in business to refer to the extent to which customers keep coming back to you in a highly competitive environment.
When it comes to launching a virtual business, once you have a registered business address, which could be your home, your major investments will be in digital assets, tools and resources. For example you will need a great website, strong and effective social media, voice-over internet protocol technology for communications, a virtual assistant, and several applications to manage invoicing and payments, scheduling and virtual document signing.
You may read my article titled “Going Virtual Can Save Your Business” published in The Sunday Gleaner on September 4, 2016, for more insights. On the final question of how to price your service, my recommendation is that you use the services of an accountant to help you with costing, budgeting and financial projections.
Costing and pricing strategy is very complex as it involves not just financial calculations but also market positioning and competitive strategy. In addition to reading up on these topics beforehand, you can review my article titled “What A Small Business Should Consider Before Hiking Prices”, published on October 14, 2018.
Best of luck!
Yaneek Page is the program lead for Market Entry USA, a certified trainer in entrepreneurship, and creator and executive producer of The Innovators and Let’s Make Peace TV series.