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Questions about
Selling
- Why choose
Daycare Realty to market my childcare
center business or property?
- Are buyers
required to sign a Confidentiality
Agreement?
-
Do I need to sign a listing agreement with DCR?
- What are the fees for
listing a center for sale?
- What will I
need to provide for due diligence?
- What type
assistance can I expect to need?
- What can I do to
help sell my business?
-
Will I need to provide seller financing?
- What is
goodwill?
- How long will it
take to sell my business?
- What "red flags"
should I look out for when choosing
a Broker?
Why choose
Daycare Realty to market my child care center business or
property?
Daycare Realty is dedicated exclusively to the sale of child care
businesses, land for child care centers, and child care property
investments. Our primary objective: to work in an honest, ethical and
professional manner while maintaining the highest achievable sale
price. Our Seller Page outlines some of the services we provide in
preparing your center for the market.
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Are buyers
required to sign a Confidentiality Agreement?
Yes. All potential buyers as well as co-brokers are required to sign
our proprietary,
detailed confidentiality agreement before any information
is released, ensuring the level of privacy and discretion necessary to
protect your ongoing business from disruption.
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Do I
need to sign a Listing Agreement with Daycare Realty?
Yes. There is a great deal of time and cost associated with selling a
business, including the center evaluation, assembling a marketing
portfolio, advertising and marketing. The package of services we offer
are designed to manage the sales process to a successful end. We can
only accomplish this with your commitment and participation as agreed
to in the listing agreement.
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What are the fees
for listing a center for sale?
Fees for our services are outlined in the listing agreement. NO fees are ever paid until we have achieved a
successful closing of your center.
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What will I
need to provide for due diligence?
Daycare Realty assembles all the information needed for a buyer, and
eventually their lender, to properly evaluate your business. This
comprehensive marketing portfolio typically includes the following; all
aspects of the real estate (deeds, title insurance, surveys, floor
plans, permits, etc), an inventory of personal property, financials, insurance,
licensing, accreditation, financing, employee benefits and labor
matters, intellectual property, legal, tax, environment and
market/commercial situation of the company.
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What type of
assistance can I expect to need?
Hundreds of points will be covered during negotiations such as terms
of payment, employee contracts, non-compete agreements, business
equipment leases and licensing. Having your team of experts (broker,
attorney and accountant) working together can protect you and ensure a
smooth closing and transition to the buyer.
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What can I do to
help sell my business?
Whether you are considering selling now or planning ahead for a future
sale, it is important to know not only the fair market value of your
business, but also how to best prepare your business to be sold. We
understand how buyers will evaluate your business and how lenders will
assess it. We use the utmost discretion, ensuring your staff will not
become aware of your possible intentions. We offer our Exclusive
Center Evaluation which will provide clear insight to selling your
center. To request a confidential center evaluation, please
Contact Us.
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Will I need to provide seller financing?
In order for a seller to receive the highest possible sale price,
certain conditions may dictate the necessity for the seller to hold a
note for a portion of the sales price. Lending requirements are
becoming increasingly tighter and can require a seller to participate.
When faced with this option, Daycare Realty insures you understand
both advantages and disadvantages.
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What is Goodwill?
In a business sale, Goodwill is the intangible asset portion of the
purchase price attributed to a business's reputation and the
expectation of continued consumer loyalty. Other intangible assets
that add value to a business include licenses, franchises, copyrights
(example: name of business), patents, websites and existing
advertising campaigns.
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How long will it
take to sell my business?
The sooner we have all the information needed to begin the marketing
process, the shorter the time period should be. Providing your broker
with the needed financial statements and information about your center
will greatly speed up the evaluation process and get it out to
qualified buyers as quickly as possible. It is important that
the business be priced properly right from the start. Working with an
experienced professional will ensure the sales process is efficient
and time is of the essence.
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What "red flags"
should I look out for when choosing a Broker?
The following are a few warning signs that you may be working with a
Broker who is not as reputable as they claim (even if they have been
in the business for a long time)
- They discourage you from seeking your own legal advice and/or
refer you to an Attorney that represents them as well, or another
party to the transaction.
- They sell centers on "projected income"
- They do not Co-Broker with other companies
- They ask for a "net" listing - legal in some states but
not favorable to the seller
- They have you sign a listing agreement and set a listing price
before reviewing any financial statements.
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Questions about
Buying
-
What do I need to provide to pre-qualify as a prospective Buyer?
-
Will I have to sign a Confidentiality Agreement?
-
What happens when I find a child care center I want to buy?
- What is due
diligence?
-
How long can I expect the whole purchase process take?
- Do I need an
attorney?
- Why
should I use a Business Broker who specializes in Daycare Centers?
- What is
Business Brokerage?
- What is
Goodwill?
- What "red flags" should
I look out for when choosing a Broker?
- How
does Daycare Realty get paid?
- How are
businesses priced?
- How can I finance my
purchase?
- Who arranges
the financing and insurance during the sale process?
-
Do you provide assistance in obtaining licensing?
- Do you provide arrangements for
1031 Tax Deferred Exchanges?
What do I need to provide to pre-qualify as a prospective Buyer?
Pre-qualifying as a Buyer is the first step in the search process.
There are three pieces of documentation needed. Our "Buyer Profile Package"
includes the following:
- Credit Authorization - allows access to your credit report.
- Personal Financial Statement - the PFS lists all your assets and
liabilities
- Management Profile - this form is similar to a resume and
outlines your education and professional work experience.
Request Buyer Profile
Package
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Will I have
to sign a Confidentiality Agreement?
Yes. CONFIDENTIALITY for Buyers and Sellers is STRICTLY
ENFORCED. As a Buyer you can be assured your private information will
remain that way.
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What happens when I find a child care center I want to buy?
Once you have been pre-qualified as a buyer we will consult with you
on determining what your needs and goals are. We provide you with profiles of schools for you that meet your personal preferences,
location and budget. You will then begin the process of CONFIDENTIALLY
PREVIEWING schools. Once you have found a school that you are
interested in buying we prepare and present a Purchase Contract
outlining the terms of your offer. If the offer is accepted by the
Seller you will move on to the due diligence process.
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What is due
diligence?
Due diligence is the terminology used to define the
process by which a buyer gains access to detailed financial and
business information as well as the opportunity to inspect the
property that is being sold with the business. The property may
include the building, land, inventory and vehicles. The "due diligence
period" allows a buyer a time period for inspection prior to making a
commitment to purchase.
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How
long can I expect the whole purchase process take?
From acceptance of the Purchase Contract to closing, it can range from
60 to 90 days on average.
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Do I need an
attorney?
It is always advisable to protect your interest and seek the advice of
an attorney, and it is VERY important you deal with an Attorney
you trust, does not represent any other parties to the transaction,
including the broker, and is someone who has experience in the acquisition of
childcare centers.
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What is
Business Brokerage?
Business Brokerage involves the sale of assets other than real estate,
such as personal property (inventory, furniture, fixtures and
vehicles) and Goodwill.
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Why
should I use a business broker who specializes in Daycare centers?
Daycare Centers are highly regulated by each State. There are many
licensing requirements that have to be adhered to. The rules are
further defined by County Administrators. Enlisting a professional
Business Broker who specializes in the industry is extremely important
in protecting yourself from unseen pitfalls.
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What is Goodwill?
In a business sale, Goodwill is the intangible asset portion of the
purchase price attributed to a business's reputation and the
expectation of continued consumer loyalty. Other intangible assets
that add value to a business include licenses, franchises, copyrights
(example: name of business), patents, websites and existing
advertising campaigns.
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How does
Daycare Realty get paid?
As in most real estate and business transactions, Daycare Realty is
paid by the Seller of the Business.
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What "red flags"
should I look out for when choosing a Broker?
The following are a few warning signs that you may be working with a
Broker who is not as reputable as they claim (even if they have been
in the business for a long time)
- They discourage you from seeking your own legal advice and/or
refer you to an Attorney that represents them as well, or another
party to the transaction.
- They discourage you from having the property inspected by a
licensed inspector
- They sell centers on "projected income"
- They do not Co-Broker with other companies
- They offer to "loan" money outside the transaction that will not
be disclosed to the lender
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How are
businesses priced?
The price is determined by many factors such as location, capacity and
historical profit and or loss. When purchasing a business the "debt
service" of the loan (also known as your mortgage payment), must be
able to be covered by a percentage of the cash flow.
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How can I finance my
purchase?
Loan programs including SBA and Conventional, typically require a 20% down payment of the total "Project Cost". The Project Cost
includes the purchase price, closing costs and working capital. The
down payment also known as the "cash injection" can be raised from
your personal savings, 401K's, family loans, current lines of credit
or notes held by the Seller. The term of the loan(s) can range from 10
to 25 years. For additional information, please visit our
Financing page or
Contact Us
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Who arranges
the financing and insurance during the sale process?
Daycare Realty has developed strategic partnerships with lenders,
insurance providers, payroll leasing companies, suppliers,
accreditation consultants and accountants to offer our clients a
complete business solution.
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Do you provide assistance in obtaining licensing?
Yes, our experienced associates will assist in ensuring that all of
your licensing needs are taken care of in a time sensitive manner.
Licensing requirements can vary by county and are an important
issue when transferring ownership of a Daycare.
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Do you provide arrangements for 1031
Tax Deferred Exchanges?
Yes, our associates arrange all of your 1031 Tax Deferred Exchanges
and help defer paying large capital gains taxes by reinvesting your
proceeds.
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