While there is no precise way to value a child care center down to the sales price dollar, there are methods to provide a potential sales price range and manage expectations. At the end of the day, it comes down to what a Buyer is willing to pay and a Seller is willing to accept.
REAL ESTATE | Whether or not you own the real estate of your child care center plays a huge factor into the value and potential financing options for potential buyers.
FINANCIAL SNAPSHOT | The first thing we like to review are 3 years’ past Income Tax Returns and a Year-to-Date Profit & Loss Statement. This gives us a look into what the business in bringing in and where those dollars are going. It also helps calculate Debt Service Coverage to see the business from the objective eyes of a potential lender.
CONDITION & ASSETS | While statements give us an idea of the financial standing of a business, we also like to get eyes on the property, the condition of the space, the surrounding area, any keys elements that may affect the attractiveness of the business to a potential buyer.
POTENTIAL IS JUST THAT | “Potential” doesn’t sell. Sellers often believe a new owner can come in and fill classrooms, increase marketing, convert spaces, expand buildings, and grow into the licensed capacity with new energy. While that may be true, that is not something most Buyers are willing to pay for – their own blood, sweat, and tears, and their own risk in making those visions a reality.
CAPACITY | On the topic of capacity, licensing plays a role into the value of a child care business by influencing the potential for income.
FREE Child Care Business Valuation
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