Are most buyers timid about buying a public school in today's economic environment? You bet.
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Success is a factor of preparation, execution and a keen eye for the market. Since your future goals depend on the outcome of your sale, you'll need to have your head in the game from Day One.
Average Preparation Time
Preparing a public school sale takes time. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a public school can rarely be ready for the marketplace in less than six months. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.
Preparing Your Employees
Business sellers face a dilemma when it comes to their employees. You're concerned about confidentiality, and rightfully so. However, the longer the selling process drags on, the more likely it is that rumors will begin to circulate throughout your workforce. When that happens, it's best to have a frank conversation with your team rather than allowing rumors to circulate through the organization. Maintain a positive tone in your conversations and answer your employees questions as completely as you can without jeopardizing the sale.
The calculation of your asking price should include a buffer to cover the expense of the sale process. Good brokerage takes a 10% success fee off the top of the final sale price. Professional consultations can also represent a significant expense during the course of a public school sale. Furthermore, your time has value, so you may need to include a personal compensation consideration in your expense estimates.
Given your interest in exit planning and in public schools, you might find these additional resources to be of interest.
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