Q. I am new to
child care. Is there any general information
which may be of help to me?
A.
For further
information we recommend you contact the
Child Care Owners Association in the area you
intend to buy in. Annual conferences and
regular training days for prospective
child care owners are offered – an
invaluable resource for a new owner.
These associations offer help to new
entrants to the child care business and it
is a good idea to contact them before you
buy a child-care centre.
The New Zealand Government website is also
an invaluable source of information.
More useful Web Site Links can be found on
the Links Page.
|
 |
Q. How much will
my bank lend me to buy a child care centre?
A.
The larger four New
Zealand banks, as a guideline, are willing
to lend 40% of the purchase price of a
leasehold child care centre and 60% on a
freehold child care centre.
Child Care Sales New Zealand though, has
access to lenders throughout New Zealand and
overseas willing to lend up to 100%
Finance (provided there is adequate
other security ) for most child care
freehold or business opportunities.
Click Here to
go to our Finance Page and complete a no
obligation Finance Enquiry Form and one of
our trained affiliates will get back to you
immediately. |
|
|
Q. What return
can I expect when I buy a child care centre?
A.
The return you can
expect depends on a number of factors, not
the least of which is whether the
opportunity is a leasehold child care
business, or a freehold child care centre,
and whether you are buying both the
buildings and/or the business.
When buying a leasehold child care centre
with a fairly long lease, say 12 to 20
years, you could expect a return of 16% to
25% of the purchase price.
The return on a freehold child care centre
would generally be in the range of 14% to
20%.
Many factors influence the Return on
Investment (ROI) such as age, occupancy,
location, growth prospects etc
I hear people refer to a "factor" or
"multiple" of net profit to purchase price
when assessing the price and ROI, what does
this mean? Simply if the profit after all
appropriate adjustments is $200,000 per
annum and it sells for $1,000,000 then the
ROI is 20% or a factor of 5.
The returns listed on this website do not
include management fees, or owners wages for
administration. Net profit is referred to as
Proprietors Earnings Before Interest Tax
Depreciation and Amortisation (PEBITDA).
Child Care Centres offered for sale are
often quoted on a "Price Per Licenced Place"
basis. This is a rough rule of thumb but
like most decisions of a buyer or an
investor the important thing is profit. The
profit is strongly influenced by average
occupancy and the fees charged per child.
If you have any questions please call Kevin
Stapleton on 0409 878352. |
|
|
Q. What is the
usual settlement time of a contract?
A.
At Child Care Sales
New Zealand, our first priority is to settle
all negotiations quickly and efficiently. A
typical contract may allow 30 days for due
diligence and finance if it is required. A
further 30 to 60 days is then allowed for
transfer of the child care centre licence.
|
|
|
Q. What is due
diligence?
A.
Due diligence is the
contractual terminology used to define the
process by which a buyer gains access to
detailed financial and other records such as
the lease, to determine the suitability of
the investment |
|
|
Q. Are their
professional management companies who will
manage the centre for me?
A.
In a simple answer -
yes. Specialist child care management
companies are available throughout New
Zealand. Companies offer management schemes
including the total management of the centre
and the business including staffing, subsidy
report claims and the general running of the
centre.
All reputable companies will ensure you
receive regular financial and occupancy
reports. If you’re looking for someone to
manage your centre, take a look at Child
Care Management section
Links.
Management charges will depend on the number
of licensed places and the location of the
child care centre. |
|
|
Q. Do I have to
agree to a Confidentiality Agreement
A.
Yes. All potential
buyers are required to sign a detailed,
tailored Confidentiality Agreement in order
to view any confidential information, or
information that may lead to the identity of
the child care centre for sale.
We would appreciate it if you could complete
a Disclaimer, Acknowledgement and
Confidentiality (DAC) Agreement for any
property you are interested in although you
may have completed Agreements for other
properties previously.
This is to honour commitments to the vendor
that we will obtain agreements specifically
for their property.
The Agreements have been made as user
friendly as possible - no printing or faxing
required. A simple on screen form only.
After submiting and Agreement you will
receive an email inviting you to contact the
concerned broker to obtain details to access
the confidential Information Memorandum
file. |
|
|
Q. How do I put
in an offer for a property I like?
A.
Click to view an
article on 'Negotiating
the Purchase'. Full of
impartial advice on the in's and out's of
purchasing a childcare centre in New
Zealand. |
