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How Business Strategy Innovation Translates to Growth

Being in the competitive childcare services industry has made Josiah Montessori’s founders revisit their business strategy to stay viable and continue growing.


How Business Strategy Innovation Translates to Growth

Many parents in Singapore go to great lengths to find that perfect early childcare centre. Former music teachers Wendy Tan and Lena Lim went a step further by starting their very own centre catering to infants all the way to preschoolers.

With five stakeholders and a capital of $100,000, the two friends set up Josiah Montessori in March 1997 in a 700 sq ft unit at Simei’s Eastpoint Mall, offering playgroups using the Montessori approach.

Tough Times in the Beginning but Perseverance Pays Off

While establishing and running their business has been a fulfilling journey for both, it was by no means smooth sailing. “We did the sums and planned everything to a tee, expecting the business to run on autopilot. However, as life often does, it did not go this way,” says Ms Tan.

The school faced a crisis in 1998, a year after opening — it ran into financial difficulties and operated at a loss. The two founder-directors then realised that they had to take the reins and have a hands-on approach to running the company’s operations. Still holding their full-time jobs as teachers at the time, the two working mothers would head down to their playschool after work with their young children in tow to make sales calls and straighten the accounts.

Ms Tan admits that those were tough times. “Our kids were really young so they slept on mattresses in the classroom while we worked. We also didn’t take a salary during this period and only broke even after three years,” she says.

While Josiah Montessori pulled through those rough beginnings, Ms Tan notes that, like any other SME, they still have constant challenges. “For example, a few years back, we experienced a terrible drought of teachers. On top of that, early childhood courses were extended by 18 months and teachers’ salaries were raised between 30 and 40 percent, causing our margins to shrink 65 percent. Increasing staff salaries and higher expectations are something we still have to face, just like most other SMEs.”

Despite the challenges, things have moved successfully along since their financial crisis in 1998. Josiah Montessori now boasts branches in Suntec City Mall, Changi Business Park, Tampines and Kallang, along with over 100 staff.

Describing herself and her business partner as “educationists at heart”, Ms Tan says setting up and running their business has been a journey from the start and one they could not have done so well without partners such as SPRING Singapore (now Enterprise Singapore1) and the International Enterprise Singapore (IE) (now Enterprise Singapore1).

Ms Tan shares that the company started engaging with SPRING (now Enterprise Singapore1) as early as 2004, learning more about running their business and the importance of having sound business strategies in place. Through SPRING (now Enterprise Singapore1), they were introduced to International Enterprise (IE) (now Enterprise Singapore1) Singapore in 2011, which opened their eyes and minds to international markets and gave them the courage to expand their schools and services.

SPRING_Josiah_Montessori_2

Business Strategy Innovation for a Sounder, Stronger Business

In 2013, the directors realised that business was stagnating and that they were not growing at a strong enough pace. To remedy this, they decided to embark on an on-going business strategy project to revisit their business direction. From this engagement, they have understood the need to work on repositioning themselves in order to generate faster revenue and remain on the cutting edge of childcare services and programmes in order to stay competitive.

 “The business strategy innovation project is helping us understand that we need to change the way we do business,” says Ms Tan. “It is helping us go back to our roots — recognising that we are Montessori driven and that is our core. It is also making us relook our business challenges — process staff, customer service, system and competition – and come up with a strategy to address the various hurdles we face here and the different opportunities that we have.”

By going through the design-thinking methodology, Josiah Montessori went on to discover and understand the challenges and gaps they faced as well as the business opportunities available. Josiah aims to be able to provide more personalised services and new ways to increase the scalability of their trade and take their business into the digital world.

Ms Tan is adamant that working closely with partners whom you can trust is what has made a difference to Josiah Montessori. She explains: “Working with partners such as SPRING and IE (now Enterprise Singapore1) goes beyond just looking at them for grants. It’s a privilege for us to get connected with them so that we could relook and refocus our business strategy. ”

Visit https://spring.enterprisesg.gov.sg/CDG to find out how the Capability Development Grant can support your business innovation projects.

 

1SPRING Singapore merged with IE Singapore to form Enterprise Singapore on 1 April 2018.

Last Modified Date: 05 Oct 2018



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