A Guide to Buying a Childcare Centre
Buying a childcare centre business can be an exciting and stressful venture for both the initiated and the uninitiated. It is quite involved and it will require a bit of effort on your part, but if you are thinking about taking those first steps towards becoming a childcare centre operator, we have composed a (hopefully) helpful guide that may be of assistance to you.
1. Research the industry to find out what your responsibilities will be as a childcare operator
The best places to start your research are provided below:
https://www.education.vic.gov.au/childhood/Pages/default.aspx
2. Childcare Centres for Sale in Melbourne and Victoria - How are they priced?
Through you journey you will come across a range of childcare centres for sale. As with purchasing any business there are a number of variables that will determine the price of the business; there is no one-siize-fits-all approach. Just because “Centre A” has the same number of places as “Centre B” does not mean that they will be worth the same. Some of the factors that can determine the price of a childcare centre include:
- Profitability
- Age and presentation of the centre
- Location
- National Quality Framework Rating
- Terms of the lease
- Occupancy
- Number of registered places
3. Buying a childcare centre involves an extremly high level of confidentiality
At Diane Krywyn Real Estate we require all prospective purchasers to sign a Confidentiality Agreement before providing any information on a centre. We require this for two reasons:
- To protect the identity of the childcare centre for sale, the families, children and staff who work at the centre.
- To ensure sensitive information that the Vendor has provided to us in order to sell the business remains private and confidential.
This is why you’ll see our listings mention the geographic region (south eastern suburbs) and a general description of the centre, but nothing relating to the exact location, size or name of the business.
Even after signing your confidentiality agreement, it is imperative that you do not disclose to anyone (unless they have also signed a confidentiality agreement) the details of the centre in question, with the exception of professionals or institutions who may be assisting you with the sales process, ie. your lender, lawyer, accountant, etc.
4. Requirements to operate a childcare centre
As you are dealing with children you must be assessed by the Department of Education and Training (Victoria) to confirm that you are fit and proper to run a childcare centre. This involves getting Provider Approval and Service Approval.
Getting provider approval is dependant on the following:
- Your ability to demonstrate an understanding of current education and service care law.
- A criminal history check.
- If you have had any bankruptcy issues.
Once you’ve submitted your application the regulatory authority will reach a decision within approximately 60 calendar days. If your application is accepted you can apply for Service Approval for a new service or the transfer of Service Approval for an existing service.
For more information: https://www.acecqa.gov.au/nqf/about/guide
5. Financing
Before you start thinking about looking for a centre it may be beneficial for you to talk to your financial institution to find out how much money they are willing to lend you and what their lending criteria are. The amount they are willing to lend will have a bearing on the centre you can afford to purchase, so getting this information before looking for a centre may prevent your time being wasted looking at centres that might not be a realistic option. The amount an institution will lend will be based on your personal circumstances.
Getting a favourable loan could make the difference in being able to afford the centre you want and missing out, so getting quotes from different institutions may be of benefit. Alternatively, using a financial broker to find a favourable loan might also be worth considering.
We hope you have found this guide to be of some benefit. If you wish to obtain more information or have any questions, please feel free to contact us at any time.