Centres of attention

Establish is a leading provider of development services for the early childcare education sector – unique in its field and highly respected. Which is why it has won so many awards.

You have to be something of an overachiever to win six business awards only 18 months after starting a business. But that is just what Logan Whitelaw and Paul Rodgers have accomplished with the business they set up in April 2016 – providing comprehensive development services for the early childcare sector.

In 2017 their business, Establish, won a total of six gongs in the Westpac Business Awards (North); the David Awards; the Property Institute’s awards and the Designers Institute awards.

Logan says the slew of awards so early in the business’ life is testament to having had a previous business before. “So we know what not to do.”

A qualified town planner, Logan started his earlier business in 2011 and by the time he wound it down had about eight people working with him. 

“We were doing the same as everyone else, and didn’t have a point of difference.” 

As a planning consultancy they were charging by the hour which, he says now, is not the best business model and he learned that the hard way.

“Lessons were learned and we have now created a business we wanted to create.”

The difference is that his new company has a product to market rather than just selling hours. 

Establish describes itself as the industry leader in providing development services for the early childcare education (ECE) sector – helping those wishing to set up a childcare centre with finding a site, due-diligence, resource consenting and complete childcare developments.

Childcare centres are complex developments and require specialist knowledge around district plans, Ministry of Education requirements and health and safety regulations around children. 

Ultimately, says Logan, the development is a place where parents are sending their most precious thing, i.e. their child.

Most of the team at Establish have children and the question they ask of any development they are involved in is whether they would send their own kids there.

Logan and Paul are growing the business in four stages which are expected to be completed within the next five years.

Stage one was looking after resources consents and feasibility studies within the sector and working to optimise existing centres. 

Stage two, which launched toward the end of 2017, is the building consent side of building an ECE centre. Every centre needs a resource consent and a building consent. Their customers were using them for resource consent work but at the building consent stage Establish was handing the client onto someone else. They will now look after this part of the process as well.

The next three stages are still confidential but Logan says they will be moving deeper into the delivery of physical assets in a major way in 2018.

Niche focus

Establish is the only specialised planning business in the ECE sector, which is relatively small with about 130 new centres built a year. Of those about 40 are home-based which means 90 or so new centres are being developed annually. By March 31, 2018 Logan expects they will have worked on 60 to 70 of the new centres around the country.

The company has turned a profit from day one and been cashflow funded from the start.

So how did they spot the gap in the market?

Essentially, he says, their customers built their business for them. “All we had to do was take on what they wanted us to do.”

In his earlier planning company they had been working with a few centres but there was real inconsistency with the way councils would process applications.

“Customers came to us and said ‘we have got issues, can’t you just put it through council for us?’”

The council notification rate for ECE centres is one in four, meaning there will be a notified hearing which can slow everything down by six months and cost many, many thousands of dollars.

Establish can lay claim to having only one in 20 of its clients’ plans notified.

The company has a ‘key account’ with Auckland Council, meaning they get access to senior planners who know the company is experienced in the sector and delivers on the requirements needed for ECE developments.

While this status is usually reserved for big players involved with buildings worth more than $20 million, Logan says Establish was able to show the council that last year it was involved in work that amounted to $51 million in terms of built assets.

Custom-built

The centres are custom-built and “quite beautiful”, Logan says. Establish works closely with a number of architects, some at the very high end and others where customers receive more per square foot for their dollars. He says they can assess quickly if a design will work for their customers. 

Asked about the strengths of the company Logan says they take a really complex process, simplify it and take that complexity away for the owners to allow them to focus on building their business.

Another strength is the team of people they have put in place with huge experience in the council planning and inspectorate processes.

Establish has also created a strong advisory team. It works with Deloitte Private which partners as virtual CFO and has weekly contact with the advisory team there. They also have an experienced professional director, Paul Trotter, as a coach/mentor who is their lead advisor on ideas and strategies.

Logan says this strong advisory team brings another element of professionalism and accountability to the company as well as providing a sounding board.

As to the future, in time they will look at offshore markets and he believes their business model can be taken elsewhere although obviously different jurisdictions will have different compliance requirements.

They have searched around to see whether any international businesses are undertaking the same type of work and so far haven’t found anyone that is doing so.

“The good thing is New Zealand’s top end ECE centres really are world leading.

“Our average is probably pretty average, but at the top it is world-leading.”