Selling a daycare isn’t a lot different from selling another small business. In a majority of cases, you can sell a typical business on your own to save money, but you can otherwise get invaluable advice and assistance if you hire experts. A team of child care brokers, appraisers, and attorneys can provide you with proper documentation and marketing to potential buyers. They can also help you negotiate the final price.
A child care business may take longer to sell than expected
A majority of child care owners have the mistaken notion that a child care business is comparable to selling a home. You might be thinking that selling a child care business will be speedy and quick. According to experts, the average time to sell a business is 9 to 12 months due to numerous factors such as a lack of buyers, financing, and stringent industry regulations in child care. This can add up, and child care brokers suggest the average time to sell a child business can even stretch up to 2 years. You must invest in a marketing time frame of 1 to 2 years to sell your child care business.
It is crucial to have confidentiality
It is critical to keep the potential sale of your child care business totally confidential. Small breaches of privacy can result in employee turnover and enrolled children. Once the sale of a child care centre leaks out, it can lead to a reduced purchase price. It takes additional months or years to get back the business value of the establishment.
Regulation typically decreases the business value and sales price
It is crucial to evaluate your business operations once new regulations are released. When necessary, make adjustments in your business to meet the required regulations but also to maintain revenue. You must always ask yourself how you can meet regulations such as license laws and still provide optimum child care. You must also factor in your business profitability. There are numerous ways to meet regulatory requirements, with some options being costlier than others. How can you spend a minimum amount and still meet every requirement?
Keep your financial records organized since it increases the purchase price
A majority of child care owners are not exactly accountants. Because of this, they don’t keep up financial records. These documentations often take a backseat to many other necessary activities to operate a child care business. However, you can utilize specialized Child care software programs that can keep up with tuition and expenses. At a minimum, you should be able to provide your monthly profit and loss statements either prepared in-house or by an external accountant. You should also present the annual corporate tax returns, reflecting the information logged in the profit and loss statements.
Facilities specifically built for child care will kick up the price
As expected, structures and designed explicitly for child care have the highest value. Additionally, newer buildings are often desirable to child care buyers since they require fewer updates and building code issues.
However, when most child care operators start in the business, the idea of building a new facility is not a financial option. Often, they remodel or repurpose a building for child care. Existing structures such as the support doors, windows, and layout must be examined with the thought of creating the most usable and highest licensed space available. Remember that your profits and ability to sell your child care business someday will depend on the type of structure you choose.
It is crucial to hire experts when selling your child care centre. It is not comparable to selling a typical business. You need to prepare a report of your business operations, including its profitability. Buyers will check your documents aside from examining your business assets.