Selling Your Early Education Business and Real Estate — A Timeline
Selling an education business and its real estate comes with its own set of complexities, making it vastly different from selling other types of small businesses. Factors such as specialized buyer types, unique valuation methodologies, licensing transitions, and the need for strict confidentiality with staff and parents all add layers to the process. Even the team you choose to guide you through the sale can significantly impact the transaction's ease and success.
Preparing your early education business and real estate for sale well in advance of listing can greatly streamline your process. Check out our proven 10-step transaction timeline below and implement our insider insights to simplify the journey, minimize stress, and gain clarity and confidence for a successful sale.
1. Initial Valuation (1 week from receipt of information)
Once you’re ready to sell, the HINGE team gathers information for our in-house financial analysts to perform a valuation of your business and real estate. If we believe your school is an attractive asset for our buyers and you are happy with the outcome, we’ll travel to meet you and tour your school(s). Tours are managed carefully — typically outside operating hours to ensure confidentiality.
Insider Insight: Employ systems that enable quick access to accurate information. You’ll need 3 years of profit & loss statements, current tuition rate sheets and real estate information for a valuation. Also, make sure to have your owner expenses (i.e. cell phone, personal auto, conferences, travel, insurance, etc.) separate so they are easily distinguishable. A clear, data-backed valuation reassures buyers and can speed up the negotiation process.
2. Listing Agreement (1 week from school tour)
After the tour, it’s time to execute the Listing Agreement. This agreement formalizes the partnership between you and your advisor team by outlining the terms and conditions under which the advisor will represent you, specifying key details like commission structure and defining the duration of the agreement. By signing the Listing Agreement, you authorize your advisor to market your early education business and real estate to potential buyers, leveraging their expertise to present your school(s) in the best possible light.
Insider Insight: At HINGE, we don’t charge retainers or fees for any of our initial processes like many brokers do. As a matter of fact, we don’t get paid until we close your transaction. This way, our sellers know we’re in this together and are confident we can get the sale done.
3. Financial Review and Marketing Launch (1-2 weeks)
Once the Listing Agreement is signed, several processes begin simultaneously to prepare for Launch. During the Financial Review, key metrics are analyzed to ensure accuracy and address any discrepancies, laying the groundwork for a smooth Quality of Earnings process later in the sale. At the same time, we begin matching your school with potential buyers from our network of 500+ experienced, cash-ready groups in early education, carefully reviewing each buyer’s process, culture, and timeline with you before initiating contact. Meanwhile, we craft a professionally designed Offering Memorandum (OM) that highlights your school’s financial performance, operations, market position, real estate, and growth potential. This document, shared only with buyers who you select and who sign a binding NDA, is designed to attract serious interest and address key questions upfront, minimizing delays during due diligence. These coordinated efforts ensure a strong launch, protecting and ensuring critical confidentiality and setting the stage for meaningful discussions with qualified buyers.
Insider Insight: Get a head start on future diligence by providing as many materials as possible for the OM — facility information like floor plans; employee and parent handbooks, staff roster and organizational charts including management structure & bios; and up-to-date tuition rates and classroom charts.
4. Indication of Interest (2 weeks from Launch)
The structured, deadline-driven transaction process begins with establishing a submission date for Indications of Interest (IOIs). An IOI is a preliminary, non-binding proposal in which a buyer outlines their suggested price and key deal terms. This step allows HINGE to vet the seriousness of potential buyers. Our team reviews preliminary offers with you so you can determine which buyers move forward to the next phase of the transaction process.
Insider Insight: Be clear about your priorities — whether it’s price, deal terms or culture fit — so you can evaluate IOIs with a focus on what matters most to you.
5. School Tours (1-4 weeks depending on buyer schedules and number of tours)
Once IOIs are received, interested buyers will want to tour the school(s) to observe operations and assess the facility. While buyers traditionally prefer visiting during working hours — often posing as a “lender,” “insurance provider,” or “industry professional” — many have become more flexible, conducting tours outside of operating hours. To ensure confidentiality and smooth interactions, the HINGE team coordinates every detail and conducts every tour and meeting.
Insider Insight: Make sure you’re prepared for tours by keeping your facility well-maintained and operations running smoothly.
6. Letter of Intent and Negotiations (1 week from last tour)
Following school tours, interested buyers may submit a formal offer in the form of a Letter of Intent (LOI), which must be submitted by a specified deadline. The LOI formalizes buyer interest as they outline their proposed terms, including purchase price, deal structure, timeline, and any contingencies. At this stage, negotiations begin in earnest. Your transaction advisor works closely with you to evaluate each offer, weighing not just the financial aspects but also the buyer's qualifications, alignment with your vision, and ability to meet the proposed terms. With their guidance, you'll navigate counteroffers and adjustments to refine the deal until both parties are satisfied. Ultimately, with insights from your advisor, you’ll select the winner.
Insider Insight: Flexibility during negotiations can help close the deal while meeting both parties’ needs. Don’t forget you’ll have our data-backed valuation to help push this stage along!
7. Quality of Earnings, Diligence, and Legal Agreements (1 month)
Childcare business transactions involve transition teams for both buyer and seller. At HINGE, we facilitate and help streamline the transfer of essential information for Quality of Earnings (QofE), diligence, and legal agreement review by implementing our established protocols and clear communication channels. For example, our in-house financial analysts support the buyer’s QofE by addressing questions and providing additional data, while our in-house diligence managers organize the seller’s business information into clear categories — corporate, facilities, employees, operations, marketing, IT, legal, real estate, and financial — keeping the process focused and efficient. Simultaneously, our advisor team reviews definitive legal agreements, including Asset Purchase Agreements (APAs), Stock Purchase Agreements (SPAs), Real Estate Purchase and Sale Agreements (PSAs) or lease assignments, advising on terms to ensure the transaction’s structure is sound.
Insider Insights: Prepare for diligence by gathering and organizing key business documents in advance (download our diligence checklist here!). It’s also important to engage experienced legal counsel early in the process to review and negotiate your legal agreements thoroughly. Clear, well-structured agreements reduce risks and ensure a smoother transaction for both parties.
8. Buyer Licensing (Up to 1 month — depending on your state)
The buyer licensing process varies widely depending on the location of your childcare business. Each state — and even specific counties and cities — has unique licensing regulations and requirements. Successfully navigating this step is essential for a smooth transition. Fortunately, the HINGE team has experience closing transactions across the United States and is well-equipped to guide you and the buyer through this phase, no matter where your business operates.
Insider Insight: Start early by gathering key documents—such as existing licenses, licensing approved floor plans, facility inspection reports, and employee credentials and certifications—to help streamline the buyer’s licensing process and avoid potential delays.
9. Staff and Parent Announcements (1 day)
Once legal agreements are signed and licensing is resolved, it’s time to share the news of the sale with your staff and families. The decision around announcement timing is determined by both the seller and the buyer, typically taking place jointly after due diligence is complete. The focus is on highlighting the positive impact and future opportunities the transition will bring.
Insider Insight: Approach the announcement with transparency and positivity, emphasizing the benefits of the sale for staff and families. Reassure them about continuity in care and operations to help build confidence in the transition.
10. Closing (1 day)
You’ve reached the finish line! Closing marks the official transfer of your business, a significant achievement after months of hard work and dedication. Whatever your next chapter holds — whether it’s retirement, a new venture, or some well-earned rest — take time to celebrate this milestone. Congratulations on your success!
Selling a childcare business and its real estate is a multi-step process that requires careful planning and execution. By understanding the typical timeline and taking proactive steps to prepare, you can streamline the process and achieve the best possible outcome.
At HINGE Advisors, we’ve spent 20+ years specializing in the sale of early education businesses and real estate. With a team boasting an impressive 300+ years of combined industry experience and strong relationships with more than 500 active buyers, we’ve closed more transactions for educational organizations than any other advisor in the nation. Ready to start your journey to succession? Let’s talk! Just reach out to our experienced advisors at info@hingeadvisors.com to get started.