Daycare sale is no joke, and it’s not something that people do very frequently. It comes up once in a while but before thinking of selling you have to really put the daycare in order to be able to gain good value off the sale. If you are thinking of selling, then you may be worried, unsure, maybe even a bit upset. That’s natural.
You see, a daycare is more than just a business; it’s somewhere that you’ve cared for children, established relationships with parents, and created something valuable. Letting go is hard, but with the right preparation and information, the process does not have to be intimidating.
Let’s explain further, so you can get an idea of what you are getting yourself into.
Why Sell a Daycare?
There are simply too many reasons that one would sell their daycare, and no reason is worse or better than another. Some sell because they want to retire. After all the hard work over the years, they just want to kick back and enjoy themselves. Others likely are burnt out.
Daycare is rewarding but draining. You’ve got to work with kids, employees, parent issues, and the other small things that keep the business so smooth sometimes. Every once in a while, sometimes you need a little break.
Some sell because they just want to do something else. Maybe you have a different career or business idea in mind that you’re passionate about. There are just so many things that life can be, and selling your daycare provides a new one. You might even be relocating to another town or even overseas, so it’s hard to keep your daycare going from afar. And then there are people who see selling as a wise financial decision. If your daycare proves successful, you can later on sell it and gain a substantial profit so you can use the money and reinvest in something else.
For whatever purpose, it is your choice, keep in mind that the selling of your daycare is not an apocalypse, only the end is.
Is there a Demand for Daycares?
The good news is that there’s always a need for daycares, particularly where families require child care. There are more working parents these days, and with that comes a consistent demand for quality child care.
If your daycare is established, has a strong enrollment base, and consistent profits, the odds of potential buyers are extremely high.
Potential purchasers usually belong to three broad categories.
- There are individuals who want to own a business but not one that is yet to be up and running.
- There are also existing corporations with multiple daycares and want to increase their operations.
- Lastly, there are investors who see the value of a successful daycare business.
If your daycare reaches the numbers just right; i.e., excellent location, good relations with the community, and stable incomes—you will have suitors waiting in the wings.
How Much Is Your Daycare Worth?
One of the first things you’ll need to figure out is how much your daycare is worth. This is called a business valuation, and it’s all about determining a fair price for what you’re selling. Buyers want to know they’re getting their money’s worth, so they’ll look at several factors.
First, they’ll check your enrollment numbers. A daycare that’s almost always full is much more appealing than one struggling to fill spots. Next, they’ll want to see how much profit you’re making each month. The more profitable your daycare is, the higher its value.
Location is a humongous factor. Where your daycare sits in comparison to the need for childcare will make it an even more attractive product to future buyers. Your word is worth something, too.
Good word and feedback are gold stars to future consumers. And don’t ever neglect your properties—anything from toys and tables to learning sets and even structures if you’re an owner-operator—add up to the final value.
In order to receive a good price, it is recommended that you hire a business appraiser or a sales broker who has experience in selling daycare. They will get a comprehensive review of your business and help you decide on a good price to quote.
Preparing for Daycare Sale
In trying to engage in daycare sale, think of this stage as getting ready for a big event. You would want your daycare to be nothing short of immaculate for the individuals who are interested in purchasing it.
Start by scrubbing clean. Fix whatever is broken, replace worn-out toys or furniture, and prepare the atmosphere so that it is welcoming. Impressions count.
Finally, have all of your documents in check. Buyers will be examining financial records, licenses, and enrollment statistics. Keep all of it up to date and neatly organized to boot. It’s also good to highlight what your daycare has working in its favor. Do you have a state-of-the-art curriculum? A wonderful staff? A wonderful location? Make sure that prospective buyers know about these strengths.
Lastly, don’t let your enrollment numbers drop just because you’re selling. Keep marketing your daycare and bringing in new families. A full daycare is much more appealing to buyers.
The Daycare Sale Selling Process
Now that your daycare is ready to go, let’s talk about the actual selling process. It can be broken down into a few main steps.
Step 1: Listing Your Daycare for Sale
You need to let people know that your daycare is for sale. There are various methods through which you can do this. One of them is by using a business broker. He or she will find you serious buyers and advertise your daycare for you. You also need to advertise your daycare on sites through which businesses are sold. Such websites have huge viewerships and can put your daycare in front of more potential buyers. Don’t overlook word-of-mouth’s power, either. Let friends, and acquaintances know you’re selling. You’ll be surprised at who might be interested.
Step 2: Dealing with Buyer Inquiry
Once you’ve got your daycare on the list, you’ll start getting calls from potential buyers. They will ask you your enrollment number, your intake on a monthly basis, and for how long your daycare has been running. Prepare to give them answers but also protect your business information. You might need to make potential buyers sign a Non-Disclosure Agreement (NDA) before sharing sensitive details like financial documents.
Step 3: Due Diligence
This is where buyers take a closer look at your daycare. They’ll review your finances, licenses, staff records, and anything else they need to feel confident about buying. Be organized and transparent during this step. It builds trust and shows buyers that you’re serious.
Step 4: Negotiation and Offer
When the buyer is serious, they will make an offer. This will be the price, terms of payment, and any handover arrangements, for instance, whether you will stay on for a period to help with the handover. Be prepared to negotiate, but also know your limits. It is okay to wait for what you consider reasonable.
Step 5: Closing the Deal
When both parties agree, it’s time to finalize the sale. This involves signing a purchase agreement and transferring ownership. You’ll probably need a lawyer or broker to make sure everything is done correctly.
After the Daycare Sale
Sometimes the new owner might ask you to remain for a short while to make the transition easy. It could be walking employees through meetings to get them acquainted with the people who have joined the company or taking parents out for reassuring briefings on change. It is a small thing that makes huge transitions easy.
Then it’s your turn now to move on to the next stage of your life. If you are retiring, starting a new business, or just taking a well-deserved rest, you can pride yourself on what you’ve accomplished.
On A Final Note
Selling your daycare is a big decision, but it shouldn’t be scary. If you know what’s going on and get ready early, you’re going to make things easier for yourself and others who might want to buy from you. Remember, you are selling a business, but more importantly, you’re leaving something that has positively affected the children and families’ lives. Do things slowly, get ready, and have faith in the process. Whatever life is going to give you in the future, you’ve got this.