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Pest Analysis!


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Trying to wade through elements of business planning. Stuck on the first part - PEST analysis.

Stands for Political, Economic, Social and Technological aspects which affect our settings. Have to look at external factors which will affect the future of our setting.

I have listed a few government initiatives regarding childcare and education, but a bit stuck on the social and economic parts. Any help gratefully received. Many thanks.

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Don't know if this is on the right lines, but economic could be if the inflation rate of things goes up then people have less money to spend on childcare. Obviously any thing like mortgage rates going up will effectively cause people to have less money and families would then look to families to babysit rather than pay for it. Social and economic problems are related as families in a less wealthy areas probably will have social problems as well not always but more than likely.

Social could also be death in families long term illness other children in family that are not well or handicapped in some way. these would all be social problems that cause families either to not have enough money or not have time to get a child to pre-school.

Don't know if this is going along the right lines for you.

If I think of anything else I'll add later hope these help but at the end of a day brain cells don't work quite so fast.

Good luck


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Don't know if its what you're after but issues directly affecting us at the moment are school amalgamations (one CofE & one county in a large village of 5k residents). Falling numbers mean that the LEA are recommending amalgamation which will affect our nursery. Issues include demographic trends, falling birth rates, number of families which can afford to live in our village, rurality - our county is very large but sparcely populated beyond the major town/s............

One statistic quoted under demography was that there are currently 450 homes occupied by over 75 year olds and when the time comes will young families be able to afford to move in


Hope this helps

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Yes, thank you. These are the sorts of things that could cause a downturn in numbers, and would be listed as "threats". The aim then is for me to plan how we might cope with such circumstances. I wondered about the latest Gordon Brown idea regarding tax - 10p in every £? That may stop some of our unfunded children's parents being able to afford to pay for their sessions.


Loads to think about. Thanks.

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Under 'economic' you could also cover things like any shortfall of the Nursery Education Grant/Funding or the possibility of this happening when the 15 hour entitlement comes into force. Also theats to your financial situation by factors outside your control - such as increased Ofsted registration fees, higher insurance costs, rent increasing etc.


Social could include things like families wanting to send their children to pre-school earlier and earlier - affecting the dynamics of the group, ratios etc. I also wondered if you could include any problems you have recruiting/retaining staff because of your location etc...


Tricky this, isn't it. Will keep thinking....



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Doesn't the scrapping of the 10% tax rate also affect staff morale, which could have a knock-on effect on to business viability? It's affecting 3 of us in our preschool to the extent that again you hear people talking about 'it would be easier to get a job at Tesco's' & I'm aware that staff still put quite a bit in to resources from their own pocket. The tax matter feels a bit like a kick in the teeth. It's not the way to retain quality staff.


Also our training funding from our Birth to Five Service [for short courses] has been drastically reduced this financial year. For something like Communicating Matters [full version] we can claim staff cover for 4 of the 6 days - the setting would have to fund the other days. I think other areas may have withdrawn even that degree of funding. If nothing else, this may have a long-term effect on staff competence etc.

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Such a lot to think about - I don't think I want any more bad news! Looks like a list of "Why not to run a pre-school!"

However, I suppose the purpose of a business plan is to show you are aware of all these things, and to show how you are going to overcome them. Work at Tesco's? How boring!

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