When is the Best Time to Sell my Childcare Business?
At HINGE, we always say, “It’s best to sell when you’re performing well.” We understand this may sound counterintuitive to some owners who feel they could easily run their companies forever at peak performance, but the two most important factors to consider when determining the best time to sell are your company’s current financial health and the state of the market.
If your financial performance has been trending upward, you have a strong staff on site, and your enrollment is booming, then it may be a great time to consider selling your business. Many buyers won’t be interested in investing in a business that is suffering or on the decline, and you will definitely not get the best value. Three years of steady financial improvement will indicate to buyers that your business is strong. Currently, buyers are focused on a company’s 2019 financial performance as well as a business’ recovery trends throughout the pandemic.
It’s also important to understand the current market including the state of the industry, buying demand, the attractiveness of your geographic area and facility, and how buyers will view your curriculum and the market you serve. Oftentimes, buyers are scarce during tough economic times, however, this has not been the case throughout the pandemic. As child care has become a focus of investment, a number of buyers have entered or re-entered the industry. It’s easy to tell that your local economy is healthy if your city is growing, people are moving in and other businesses in your area are prospering. Currently, the early education industry is experiencing a seller’s market, giving business owners the advantage of a competitive process with a larger buyer pool and, oftentimes, a higher selling price.
Timing is everything, and understanding the factors that maximize the value of your early education business is key in your decision to sell. If you want to learn more about the selling process, feel free to reach out to our team at info@hingebrokers.com.