The importance of planning for the future of your childcare business can not be underestimated. A business plan provides you with a clear road map and strategy to grow and achieve your business goals and financial objectives but of equal importance is the Exit plan. How are you going to optimise the value for the business you have created?
Due diligence forms an essential part of buying any business as it provides a bridge between making an offer to acquire a business and completing the deal at an agreed price.
Most childcare business sales will be completed “subject to Due Diligence”.
The scope of the due diligence investigation will vary and to some degree depend on the information provided by the seller and Business Broker prior to any offer being made. It genuinely pays to get the right information from the right people for a smooth sale to proceed.
Having an exit plan in place is not an indication of your lack of confidence in being a success, on the contrary, building your business with the “end in mind” will ensure you achieve the ultimate goal in business ...
In recent weeks we have come across business owners who tell me they have a “private buyer” for their childcare centre, so would not require our services. In principle this probably sounds good to business owners with “no commission to pay”. In reality, and from my experience, they are unlikely to be achieving the best possible outcome for the sale of what is possibly their largest asset.
When the time comes to sell your Childcare business one of the first questions is “what is my business worth”. While many business owners genuinely do not know, others have an unreal expectation.
While it can be a little cliché “your business is worth what someone will pay for it” .
There are number of rules of thumb to value a business, and everyone will have an opinion, however’ when it comes down to actually achieving a sale of your business it will be dictated by Price, Presentation, Promotion and the negotiation through the sale process.
When selling a Childcare business where the owner also owns the property, it is common for the new business owner to try and negotiate a Right of First Refusal to purchase the property in future within the Deed of Lease.
This is a decision that should not be taken lightly. It will have future consequences that need to be carefully considered...
We have been involved in an increasing number of sales where the owner wants to sell the Business and retain the Land and Buildings to be a passive Landlord.
This brings up a number of questions from the Seller as to what should be in the new Lease agreement and who is responsible for what.