Selling a Child Care

Most of businesses listed for sale are never sold. Lluna Investments is a company that specializes in the school industry. Our success depends on closing the deal, in fact we have sold over the years almost all of our listings. selling a child care is what we do best.

First, the partners of a child care should get a Partners Resolution to Sell in place. Second, they need to look at the facility condition and get some important documents ready. The process for Selling a Child Care is similar to other business, but with some important differences.

Selling a Preschool successfully requires some preparation:

Get a team ready

Attorney

Sellers will need to contact a group of professionals to help preparing for the sale. Although a real estate broker will be handling most of the initial offer and contract, consultation with a real estate attorney is advisable and sometimes essential. The sales contract of a child care center or school could involve specific clauses.

CPA

A CPA could help before, during and after the sale. Consider the following with your CPA.

  • Have an exit strategy planned before you sell the school. Have a clear view of what will be your next step the day after you close on the sale.
  • Get all school financials in order. This is an essential part for evaluating the school and during the due-diligence period.
  • The CPA can also help planning for tax implications that may result from capital gain or a 1031 exchange. 

Broker

Hiring the right broker makes the difference between closing the deal or not closing. Lluna Investments sold child care centers to buyers in the US, South America, Canada and Europe. We provide assistance with all aspects of the negotiation, valuation of the business and real estate, with marketing while keeping full confidentiality, qualification of the potential buyer and more.

Confidentiality

Confidentiality is not an issue when selling a businesses like a gas station. Advertising the sale of a gas station does not affect gallons of gas pumped everyday. Customers will continue to go to the gas station even if the know that the business is being sold.

That is not the case when selling a child care or school, confidentiality is a very important part of the deal. When the sale is announced before closing date, teachers and parents start to worry because of the unknown future of the school.

The best way to keep the sale confidential is to hire an experienced broker. At Lluna Investments we have the experience needed, but most commercial brokers are not familiar with the process and pose a risk.

Documentation

It is important to have all the documents ready beforehand or the Seller could miss a good opportunity with a qualified Buyer. The minimum documentation needed will depend if the Real Estate is included in the sale. To start here is a list:

Financial documentation: 

  • Last 3 years of corporate tax returns
  • YTD financial statements.
  • Payroll summary
  • List of staff including accreditation information and salary information.
  • Information about any leased equipment.

School operations:

  • Governmental programs details. (VPK – Food program – etc.)
  • Breakdown of current enrollment.
  • Accreditation information.
  • Any additional comments, feature or quality about the business that may help to better market the center.

Location information:

  • Copy of the lease agreement (if applicable)
  • Landlord or mortgage holder information.
  • Floor plan of the facility.
  • Previous title policy (if applicable)
  • Survey (if applicable)

Valuation

Contact us for a free valuation of the center. To make sure that the school is listed at the correct price we will need some information. For more details visit the valuation section.


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