Business Services

Selling or Buying a Child Care Center A child care center business consisting of a single site or multiple sites may be sold or purchased with the ownership transferred from entity to entity. Operating entities may include individuals, partnerships, corporations, and private equity companies. Businesses may be transferred by selling some or all of the company stock or designated assets owned by the company. In addition to the hard assets of the business which includes equipment, vehicles, inventory, and furniture and fixtures, the ability of the company to produce revenue commonly referred to as goodwill, is typically the most valuable asset in a profitable business. The ability of the business to produce revenue in the future is measured by the historical revenue adjusted by any future changes specific to the new owner.

Selling or Buying a Private Elementary School (K-8) Organizations providing educational services for children in elementary grades are also eligible to be sold and acquired. Although this service is mainly provided by the public school system, there are many private and non-profit organizations serving grades kindergarten through eighth grade. Often operating child care organizations also provide elementary and middle school education as well.

Selling or Buying an Afterschool Company Organizations providing care and supplemental programs before and after elementary and middle school, as well as during holidays and vacations, are considered afterschool providers. This service often exists within a child care center or private elementary school and can also be provided on a public school site for the benefit of its school population.

Business Valuation Business value in an educational setting is determined by beginning with historical income and expense items, and adjusting for any changes that will be implemented post-closing. Typical items that require change are rent, employee benefits, and adjustments for personal expenses of owners. After determining the go-forward annual cash flow that is or will be derived from the business, a multiplier is applied to determine the business value. Multipliers are based on current industry standards and vary depending on company size and programming quality.

Profit and Loss Reports and Expense Review Regularly produced profit and loss reports are vital to the health of any organization. It is critical to receive accurate, timely information that is used by management to make daily business decisions. Healthy educational businesses must designate funds to expenses that will ensure quality, while at the same time maximizing the overall financial health of the company. It is also critical to have benchmarks for comparison and make adjustments as needed.

Operational Financial Strategy A strategy must be developed to reach optimum financial health in any organization. Financial information should be analyzed and written goals produced to maximize revenue and control expenses in a manner that produces quality services while preventing unnecessary waste. It is important for all team members, especially managers to understand the financial strategy and to be trained in effective techniques for implementing the strategy.