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Small Business Startup Idea: Parental Outsourcing Services

If you're looking for a new business to start, you might consider "parental outsourcing." The catchall term is used to describe everything from child care to athletic coaching and educational tutoring.

In short, it's the stuff modern parents don't have time to do. And if the economy rebounds as many hope it will soon, one firm expects this line of work to become real popular.

The industry and market research IBISWorld forecasts an uptick in parents outsourcing their child-related duties in an industry expected to reach $55.8 billion in revenue this year, "presenting ample opportunity for small businesses and entrepreneurs ," the firm stated. Importantly, the industry is not dominated by giants.

“With few national firms operating in these parental outsourcing service categories, industry concentration is low said George Van Horn, senior analyst with IBISWorld. “Although thousands of operators do exist and competition is high for this industry, the players are small, so there is a golden opportunity for entrepreneurs to build operations and gain market share in this multibillion dollar sector.”

IBISWorld predicts the following growth rates between now and 2013:

  • Sports Coaching: 6.0 percent
  • Educational Consultants: 5.8 percent
  • Child Care Centers: 3.4 percent
  • Family Day Care: 3.4 percent
  • Other (Driving Schools, Language Instruction, etc.): 3.4 percent
  • Nanny & Babysitting Services: 2.5 percent
  • Exam Preparation & Tutoring: 2.1 percent

“There are an estimated 92.9 million children aged 21 or younger, accounting for 29.9 percent of the entire U.S. population,” Van Horn said. “The potential market for businesses in the parental outsourcing industry is huge.”

The parental outsourcing industry is dominated by child care centers, with 41 percent of the market and $22.8 billion in revenue.

Nanny and babysitting services account for roughly 29.1 percent of the market, with revenue expected to total $16.2 billion. Demand for nannies has increased recently as an alternative to using child care centers, IBISWorld says.

Family day care businesses generate an estimated 9.4 percent of industry revenue, nearly $5.3 billion. This type of care includes licensed businesses that care for one or more children for 12 or more hours per week in residences other than the child’s home. The caregiver often operates in his or her own home. With the proper licenses , this can be a relatively inexpensive business to start .

Sports coaching represents 7.6 percent of revenue, totaling $4.25 billion. The majority of this demand comes from the 13-to-18-year-old age group. You'll presumably need some athletic skill or knowledge to get into this this line of work.

Exam preparation and tutoring make up 6.2 percent of revenue. Educational consultants account for 2.1 percent. The tutoring segment is slightly more saturated, meaning that growth opportunities are slowing compared with previous years. However, educational consulting services are still in high demand and will likely perform well in the coming few years.

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