How Do I Find a Daycare Center for Sale Near Me?
For daycare business owners, the decision to expand their business or enter a new market can be a daunting one. There are a number of factors to consider: location, competition, potential customer base, and financial risks to name a few.
One of the most critical decisions is whether to buy an existing daycare center or to build a new one from scratch. In this article, we will provide guidance on the process of finding nearby daycare centers for sale and explore the advantages and disadvantages of each option available to you.
The decision to buy an existing daycare center or build a new one can have significant implications for the success of your business. Buying an existing center offers the benefit of an established customer base, a reputation, and lower start-up costs. On the other hand, building a new center allows for complete control over the design and layout, modern facilities and equipment, and the ability to customize services to meet community needs.
Before making a decision, it is essential to consider the advantages and disadvantages of each option carefully. For example, buying an existing center may offer lower start-up costs, but there may be limited control over the previous owner’s practices, potential hidden liabilities, and staff may not fit with your management style. Building a new center may allow for complete control over the design and layout, but it also comes with higher start-up costs, longer time to establish a customer base and reputation, and higher risks.
We’ll explore each of these factors in detail, providing an in-depth analysis of the advantages and disadvantages of each option. We will also provide guidance on the process of finding nearby daycare centers for sale, including researching listings online, contacting a business broker, networking with other daycare owners or industry professionals, and conducting due diligence on potential purchases.
This article is divided into five sections:
- The first section will focus on the process and steps needed to find nearby daycare centers near you that are for sale.
- The second section will focus on the advantages of buying an existing daycare business location, such as lower start-up costs, an established customer base, and an established reputation.
- The third section will focus on the disadvantages of buying an existing daycare business location, such as limited control over previous owner’s practices, potential hidden liabilities, and staff that may not fit with your management style.
- The fourth section will explore the advantages of building a new daycare business location, such as complete control over design and layout, the ability to customize services to meet community needs, and modern facilities and equipment.
- The fifth section will focus on the disadvantages of building a new daycare business location, such as higher start-up costs, longer time to establish a customer base and reputation, and higher risks.
This article covers a comprehensive understanding of the advantages and disadvantages of buying an existing daycare center versus building a new one. It will also cover the process of finding nearby daycare centers for sale. Allowing you to make an informed decision that will help your business grow and thrive in the competitive daycare market.
However, as always, if you need or want more personal guidance from an industry leader who has helped over 250 owners build new locations, please reach out to Rebecca@ChildcareDesign.com to schedule a business consultation. She’ll be happy to answer your questions and offer you unbiased feedback on your personal situation.
The Process of Finding a Daycare Center for Sale Near You
If you are interested in finding and buying an existing daycare business location, there are several steps you can take to find nearby daycare centers for sale. Let’s go over the process of finding nearby daycare centers that are for sale for you to consider.
Research Listings Online
One of the most common ways to find nearby daycare centers for sale is to search online listings. Many websites specialize in listing businesses for sale, including daycare centers. These listings can provide valuable information about the location, size, and price of the business. These websites often allow you to filter your search based on specific criteria, such as location and price range. You can search for both independent daycare centers near you as well as search franchisee listings and buy into an established brand.
Contact a Daycare Business Broker
Another option for finding nearby daycare centers for sale is to contact a local daycare business broker. Daycare business brokers specialize in buying and selling daycare businesses, and they can help you find a daycare center that meets your needs and budget. They can also assist with the negotiation process and provide valuable insights into the local market.
Network with Other Daycare Owners and Industry Professionals
Networking with other daycare owners and industry professionals can also be a useful way to find nearby daycare centers for sale. By attending industry events, such as conferences or trade shows, you can meet other professionals in the field. Don’t be shy about expressing interest to everyone you meet to learn about potential business opportunities. Hearing about an opportunity through the industry grapevine will reduce the amount of competition you have bidding against you for the business. You can also join online forums or social media groups that cater to daycare owners and professionals and ask within those groups.
Conduct Business & Property Due Diligence
Once you have identified a potential daycare center for purchase, it is essential to conduct business and property due diligence. For the business side, this involves reviewing financial records, lease agreements, employee contracts, and other important documents to ensure that there are no hidden liabilities or issues that could effect the business’s value. For the property side, this involves scheduling a site visit to the daycare center to observe the facility, meet with staff, and assess the business’s operations and assess the building’s up to current building code requirements. Even though you are not changing the use of the building, a change in ownership will trigger a required Fire Marshall and Building Permit office permit and inspections. To prevent any building code surprises, schedule to have an experienced daycare architect, like us here at ChildcareDesign.com, to join you for a site visit and formal code analysis inspection.
There are several steps you can take to find nearby daycare centers for sale. These include researching listings online, contacting a business broker, networking with other daycare owners or industry professionals, and conducting due diligence on each potential purchase.
Many owners take months or even years to locate the right business to purchase. But by taking the time to find the right business, conducting thorough research, and working with professionals, you can increase the chances of finding a successful daycare center that meets your needs and goals.
Advantages of buying an existing daycare business location
Starting a new daycare business from scratch can be a daunting task, both financially and operationally. This is where buying an existing daycare business location can be an advantage. In this section, we will explore the various advantages of buying an existing daycare business location.
Lower Start-up Costs
Starting a new daycare business from scratch can be costly. Buying an existing daycare business location, on the other hand, can be much more cost-effective. This is because much of the initial infrastructure is already in place, such as a building, furnishings, equipment, and supplies. By purchasing an existing daycare business location, you can potentially save a lot of money on start-up costs.
Established Customer Base
One of the biggest advantages of buying an existing daycare business location is the established customer base. The daycare business is highly dependent on word of mouth referrals and reputation, which takes time to build. By buying an existing daycare business location, you can avoid the initial struggles of attracting customers and building a reputation. The existing customer base can provide a reliable source of revenue for your business.
Established Business Reputation
An established reputation is another significant advantage of buying an existing daycare business location. The previous owners of the business have already invested time and effort into building a reputation for the business. This means that the business has already established a presence in the community and has a proven track record of quality services. An established reputation can make it easier to attract new customers and retain existing ones.
Reduced Risks
Starting a new business always comes with risks, especially in the highly competitive daycare industry. When you buy an existing daycare business location, you can reduce some of the risks associated with starting a new business.
If the business is already established, you can take advantage of the knowledge and experience of the previous owners to avoid common pitfalls.
But word to the wise…
if the business is closed, you need to take a long hard look and why.
Did the business have a poor reputation?
Was it ever in the news?
Are there enough young families close by to support enrollments?
Is it along a common work commuter path?
Potential For Faster Return on Investment
Since an existing daycare business location already has a customer base, infrastructure, and an established reputation, it is possible to generate revenue quickly. This means that you can potentially see a return on your investment faster than if you started a new daycare business from scratch. With a faster return on investment, you can reinvest the profits back into the business and accelerate its growth.
Buying an existing daycare business location can be advantageous for several reasons. It can save you money on start-up costs, provide an established customer base, an established reputation, reduce risks, and provide a faster return on investment. However, it is essential to conduct due diligence and thoroughly assess the existing daycare business location before making a purchase. This will help you avoid potential issues and ensure that you make an informed decision.
Disadvantages of buying an existing daycare business location
While buying an existing daycare business location has several advantages, there are also potential drawbacks to consider. Let’s explore some of the disadvantages of buying an existing daycare business location.
No Control Over Previous Owner’s Management Practices
When you buy an existing daycare business location near you, you inherit the practices of the previous owners. This means that you have limited control over the way the business was run in the past. This can be challenging if the previous owners had a different management style or provided services that don’t align with your vision. Additionally, there may be some practices that you disagree with or that could cause potential issues for your business.
Find an opportunity to interview key staff, but make sure that the sale of the business is public knowledge and you have permission from the current owner to do so first.
Potential Hidden Liabilities
When buying an existing daycare business near you, there may be potential hidden liabilities that you are not aware of. These could be legal or financial issues that the previous owners did not disclose to you during the purchase process.
For example, there may be outstanding lawsuits, debts, or other financial obligations that you may become responsible for as the new owner. Have a lawyer to a complete history search on the business to avoid any costly surprises after you’ve signed on the dotted line.
Existing Staff May Not Fit with Your Management Style
When you buy an existing daycare business location, you also inherit the staff. While this can be an advantage, as good staff are hard to find, it can also be a disadvantage if the existing staff doesn’t align with your new management style.
The staff may be resistant to change, or they may not have the necessary skills or qualifications to meet your needs. This can create a challenging situation and may require additional training and excessive staff turnover during the early months of ownership.
Outdated Building and Equipment
Another disadvantage of buying an existing daycare business location is the potential for an outdated building and equipment. The previous owners may not have invested in building upgrades and new equipment, which could lead to a less-than-ideal working environment for your staff and a less-than-optimal experience for the children in your care. Upgrading outdated items can create more additional costs than expected in terms of upgrades and renovations.
While buying an existing daycare business location has its advantages, there are also potential disadvantages to consider. These include limited control over the previous owner’s practices, potential hidden liabilities, existing staff may not fit in with the new management style, and the potential for outdated buildings and equipment.
It is essential to conduct due diligence and thoroughly assess the existing daycare business location before making a purchase. This will help you avoid potential issues and ensure that you make an informed decision.
On the other hand, you may find that building and establishing a completely new location is the better and more exciting choice. Maybe you’ve worked in existing older buildings before and you’re now ready to embark on the exciting adventure of building a new location.
If this is up your ally, review the following advantages and disadvantages of the new daycare construction process as well.
Advantages of Building a New Daycare Business Location
Building a new daycare business location near you can offer several advantages that may not be available when buying an existing daycare business location. Let’s explore some of the advantages of building a new daycare business building location.
Complete Control Over Design and Layout
When you build a new daycare business building location, you have complete control over the design and layout. This means that you can create a space that meets your specific needs and vision for your business.
You can choose the size, layout, and materials used to build the facility. This level of control can ensure that your business operates in the best possible environment that will align with the services you intend to offer.
Ability to Customize Services
Building a new daycare business location can also provide the opportunity to customize your services to meet the specific needs of the community. You can conduct market research to identify gaps in existing services or services that are in high demand. This can help you develop a unique offering that can differentiate your business from competitors.
Modern Building and Equipment
A new daycare facility provides the opportunity to have a modern building and equipment. You can invest in the latest technology and equipment that can help you provide high-quality services to the children in your care. Modern buildings can also provide a more comfortable and welcoming environment for both staff and clients.
No Previous Liabilities to Worry About
When you build a new daycare business location, you don’t have to worry about inheriting any previous liabilities from the old owners. This means that you start with a clean slate and can focus on building your business without the baggage of any previous legal, financial, or reputation issues.
Building a new daycare building location can offer several advantages over buying an existing daycare business. These include complete control over design and layout, the ability to customize services to meet community needs, modern facilities and equipment, and no previous liabilities to worry about.
However, it is important to note that building a new daycare business location can also be more expensive and time-consuming than buying an existing daycare business location. It is important to conduct thorough research and analysis to determine if building a new location is the right choice for your business.
Disadvantages of Building a New Daycare Business Location
While building a new daycare business location has several advantages, there are also potential drawbacks to consider. Let’s explore some of the disadvantages of building a new daycare business location.
Higher Start-up Costs
One of the most significant disadvantages of building a new daycare building location is the higher start-up costs. Building a new facility can be expensive, and there are many costs to consider, such as land, construction, and equipment.
We explain the details of these costs and share historical daycare cost data this YouTube video. Additionally, there may be additional costs associated with obtaining permits, zoning, and other legal requirements. These costs can add up quickly and may require significant financial investment.
Longer Time to Establish Customer Base and Reputation
Building a new daycare business location can also take longer to establish a customer base and reputation, depending on if you are new or established in your community as a trusted childcare provider.
If not, it takes time for clients to become aware of your business and for you to establish trust and credibility in the community. This can be a significant challenge, particularly if you are entering a competitive market.
Higher Risks
Building a new daycare business location also involves higher risks. There is always a risk that the business may not be successful, and you may not be able to generate enough revenue to cover your costs.
Additionally, there may be unforeseen issues that can arise during the construction process that increases your expected costs. For that reason, we always recommend that childcare owners set aside a 10% contingency fund to cover last-minute or unanticipated costs.
Potential for Delays and Unforeseen Issues
Building a new daycare building location can also be a complex and challenging process. There is a potential for delays and unforeseen issues, such as weather delays, construction delays, or permit issues. These issues can cause significant setbacks and can impact the timeline and budget for the project.
To avoid having angry parents, do not promise a business open date until you are absolutely sure your general contractor will be finished in time. It’s prudent to plan for two weeks to move furniture into the building and an additional two weeks to train staff. So, at the very least, you should not publicly open until a month after your contractor is completed and has the Fire Marshall’s official inspection and sign-off that gives you a Certificate of Occupancy.
While building a new daycare business location has its advantages, there are also potential disadvantages to consider. These include higher start-up costs, longer time to establish a customer base and reputation, higher risks, and potential for delays and unforeseen issues.
To avoid setting yourself up for failed expectations, learn the details of property development as you progress through your building remodel or new construction project at SaveOnBuilding.com. This is one of those moments in your life when lack of knowledge could cost you thousands of dollars!
Conclusion
The decision to buy an existing daycare business location or build a new one is critical and should be made after careful consideration of the advantages and disadvantages of each option.
Buying an existing location offers a lower start-up cost, an established customer base, and reputation, but it also comes with limited control over previous owner’s practices, potential hidden liabilities, and staff that may not fit with your management style.
Building a new location, on the other hand, allows for complete control over the design and layout, modern facilities and equipment, and the ability to customize services to meet community needs. However, it also comes with higher start-up costs, longer time to establish a customer base and reputation, and higher risks.
It is essential to conduct thorough research and due diligence when making this decision.
Researching listings online, contacting a daycare business broker, networking with other daycare owners or industry professionals, and conducting due diligence on potential purchases are all important steps to take before making a final decision.
Moreover, it is always advisable to seek professional advice before making a final decision. Consult with experts in the field, such as business brokers, lawyers, and accountants, and architect’s that specialize in childcare design, ie: Rebecca@ChildcareDesign.com. Seeking out advice from seasoned professionals will help you rest easy knowing that you are making an informed decision that is in the best interest of your business.
-This article was written by Rebecca Calbert.
Rebecca is a licensed architect with over 30 years of experience. She owns and operates an architectural firm, Calbert Design Group, and educates her clients through the commercial real estate development process with online content at SaveOnBuilding.com. Rebecca’s “purpose” is to educate small business owners and protect them from what they don’t know.
