December 1, 2020  
 
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Selling a Company

 

Selling a Child Development Center

Over the past few years, the child development center marketplace has been a shaky environment for sellers. Many sellers have exited their companies under less-than-ideal circumstances. Yet it's still possible to achieve personal and professional goals when selling a child development center during challenging economic times.

You need to get a good price for your child development center. To get there, you'll need to set realistic expectations and follow a deliberate selling strategy.
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Too often child development center owners fail to receive fair market value for their businesses. Smart sellers know the value of their companies are prepared to identify buyers who are willing to pay top dollar.

Preparing for What's Next

The decision to sell your child development center can't be made without adequate consideration of what will happen after the sale. If you aren't sure what's next, you could be in trouble because future plans and selling strategy are inextricably connected. We frequently encounter business sellers who haven't thought enough about their futures to know whether certain concessions (e.g seller financing) are a real possibility. As a result, they make bad decisions during the sale and experience less-than-optimal outcomes.

Sale Costs

In a child development center sale, pricing is based on a number of factors, including the costs incurred during the sale. Good brokerage takes a 10% success fee off the top of the final sale price. Attorneys, accountants and appraisers work for a flat fee that can range from hundreds to thousands of dollars. If you need to compensate employees to assist with the sale, their services should also be considered.

Selling a Child Development Center to an Employee

Although it may seem easier to sell your child development center to an employee, this approach also has some pitfalls. A faithful employee may have the motivation and ability to continue to operate the business. The time and expense of locating the right buyer will be nonexistent and you won't have to spend weeks showing the buyer every square inch of the company. Yet most employees lack the means to buy their employer's business at or near the asking price. Seller financing is one way to get around the capital deficit of an employee-based child development center sale, as long as you are willing to vet the employee's credit worthiness the same as any other buyer.

More Info on Business Transitions and Related Articles

We think you may find these additional resources to be of interest.

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