Sell my daycare business or sell your child care center

To sell a daycare for a good price, you need three things before the first buyer call: three years of financials that separate tuition from subsidy income, enrollment close to licensed capacity, and a qualified director who can run the center without you. Owner run centers commonly sell for about 2 to 4 times seller's discretionary earnings (SDE), and the exact number depends on how full the rooms are, how stable the staff is and whether the license can pass to a buyer. This guide covers who buys, how the price is built, what to prepare and where to list.

Who buys daycares

Owners often hear from one kind of buyer and assume that is the whole market. Four types are active, and they pay differently.

A licensed home daycare usually sells to a teacher or another provider. A 100 seat center with a waitlist draws operators and financed private buyers.

How much will I get for my daycare

Buyers add up your net profit, your own pay and perks, interest, depreciation and one time costs to reach SDE, then apply a multiple. Seats filled matters most, because staff and rent are mostly fixed. If you own the building, it is valued separately from the business.

Run your own numbers through the business valuation calculator first, then compare the result with what similar centers are asking on the daycare for sale page. Asking prices run higher than closing prices, so treat them as a ceiling.

What to prepare before you list

Spend six to twelve months on the items that move the price most.

1. Fill empty seats and start a waitlist, because enrollment is the first number a buyer reads.
2. Put a director with the state's required qualifications in place so the buyer sees a center that runs without you.
3. Reconcile three years of books so tuition deposits tie to the bank. A tool that can match tuition payments to bank deposits saves days of work, and a buyer's accountant will run the same test.
4. Collect inspection reports, licensing correspondence, staff certifications and insurance history in one folder.
5. Write a monthly enrollment history by age group for the last 36 months.

The general selling a business checklist covers the legal and tax steps that apply to any sale.

Deal terms to expect

Most daycare sales pay 60 to 80 percent at closing and the rest as a seller note. Expect a non compete for your area, a transition of 30 to 90 days where you introduce the buyer to families and staff, and a working capital adjustment for prepaid tuition and deposits. The license is the gate. In many states it does not transfer, so the buyer applies for a change of ownership and the purchase agreement should be conditional on that approval. Buyers who finance with an SBA loan to buy a business also need three years of returns.

Where to list a daycare for sale

You can list yourself, hire a broker or approach other operators directly. Brokers charge a percentage that is hard to justify on a $60,000 home daycare but can pay off on a $1 million center with a lease and staff to defend. On CompanyBrokers the Owner Listing plan puts your center in front of buyers with deal alerts for daycares in your state, and the data room keeps parent lists and staff files private until a buyer signs an NDA and shows proof of funds.

How much does it cost to sell a daycare

Selling on your own with the Owner Listing plan costs $24 a month billed yearly, plus legal and accounting fees at closing. A broker typically charges 8 to 12 percent of the price, with a minimum fee on small deals. Many owners list themselves first and bring in a broker only if buyer interest is thin.

What is the best way to sell a daycare

List it with revenue, cash flow, licensed capacity and enrollment visible, answer buyers under an NDA, and introduce the buyer to your staff and families yourself. Owners who prepare financials, licensing files and an enrollment history first sell faster and at higher multiples than those who list a rough summary.

Who buys daycares

Four groups buy: regional operators and chains, directors or teachers who already work there, individual buyers financing with an SBA loan, and real estate investors who want the building. Operators pay most for full centers with a clean license record.

How long does it take to sell a daycare

Most sales close in four to nine months from listing. Full centers with clean books sit at the short end, while owner dependent centers and states with slow license approvals take longer.

Should I tell my staff and parents before I sell

Not before you have a signed NDA and a serious buyer. After that, tell the director first, then staff, then families together with the buyer, because centers lose children when parents hear the news second hand. Plan the message and the introduction before the closing date.