A Guide to Selling a Childcare Centre
In our previous post we discussed the ins-and-outs of buying a childcare centre. Today we will be providing information on selling a childcare centre in Melbourne and Victoria. If you are reading this chances are you are pondering the idea of selling your centre. We understand this is never an easy decision and we hope we can provide you with some helpful insights about the selling process if/when you decide to sell.
Please note: this guide only applies to Diane Krywyn Real Estate; other agents may have different ways of handling the sales process.
1. What is my centre worth? How is it valued?
When determining the sale price for your childcare centre business we take into account the profitability, occupancy, number of registered places, terms of the lease, location and NQS rating. There is no one-size-fits-all approach to appraising a centre, so careful consideration is taken on a centre by centre basis to make sure the sale price is a true reflection of what your centre is worth.
2. Choosing an agent
Engaging an agent with experience selling childcare centres can be beneficial to you for a number of reasons. Firstly, we know and understand the current regulations and legislation that governs the childcare industry in Victoria. Having this knowledge enables us to answer any questions that you or a prospective buyer may have and to advise on the particulars of selling your centre, ensuring that no regulations are breached. Government regulations play an important part in the selling of childcare centres.
In addition, it helps to have an experienced and knowledgeable agent as you only get one chance to “sell a centre” to a prospective buyer. If the agent, who is representing your business on your behalf, can’t satisfactorily answer a prospective buyers questions or provide them with the right advice or information promptly. a buyer can lose interest very quickly. An agent needs to be able to anticipate a buyers questions and be ready to provide them with the answer they require quickly and efficiently.
Even if you decide to use another real estate agent to sell your centre, we recommend that you make sure they have the expertise and experience to ensure a satisfactory outcome.
3. Confidentiality
As you’ve already purchased a childcare centre business, you will know that buying a childcare centre business can feel like a very clandestine affair. The same holds true for selling a childcare centre. Discretion from all parties (the buyer, seller and the agent) is required to ensure a smooth and stress free process.
The most important thing we have to ensure is that parents and employees do not become aware that the centre is on the market. To prevent this from happening we do the following:
1. When marketing the centre there are no specific details of the centre provided, like the name and address. We will use broad descriptions like “eastern region” for location, etc. Only when a purchaser has contacted us and has signed a confidentiality agreement will we provide more detail. Even then, only once they have expressed interest and wish to inspect the centre will we disclose the name and address.
2. Arrange inspections that suit all parties. A well attired estate agent with prospective purchasers in tow is very noticeable, so we organise inspections outside the hours of operation of the centre to maintain confidentiality.
One final aspect of confidentiality is the information provided by you, to us, to enable us to sell your childcare centre. You will be required to provide Profit and Loss statements, staff wages and other sensitive material which we will then pass on to the prospective buyers. We will not disclose any of the material you provide us to any prospective buyers who haven’t signed a confidentiality agreement.
4. Marketing
Marketing your centre will involve the use of digital platforms such as our website (https://www.dkre.com.au), social media, correspondence with prospective buyers via our mailing lists, and listing websites such as Business View and Commercial Real Estate.
As previously mentioned, the marketing of the centre will only involve basic information to ensure that the centre cannot be identified. Examples of how we market a centre can be found via the following link – https://dkre.com.au/listings