Buying a School
Things Every School Buyer Should Know
Gateway School Sales advocates finding a childcare business or school that you like and would feel comfortable managing. You, like every other prospective buyer, have a vision of being your own boss and calling your own shots. A school must fit your vision to be successful!
There’s an old saying in the real estate industry that goes something like this: “The three most important things a buyer should look for are location, location, and location.” Location is certainly an important factor when buying a school, but it is hardly the only one. The three components of a successful childcare business or school are location, track record, and management. As a prospective buyer, you should be thinking about all three of these components.
Let’s assume that we help you find a school you like in a suitable location. But, because of poor management, the school may not show the greatest track record. Purchased for the right price and on the right terms, this school could become more successful with proper management, making it a good way to achieve your vision of being in business for yourself.
As you search for the right childcare business or school to buy, you may be concerned as to why an owner is selling. There are a variety of honest reasons that owners sell such as retirement, poor health, relocation, or even just a desire to move on to something new. If a school is a good fit for you, the reason for the sale shouldn’t matter.
You should also be aware that a business transaction is a negotiation and childcare businesses and schools often sell for less than the asking price. If it’s a school you like and could see yourself owning, don’t be afraid to make what you consider to be a reasonable offer.
What Gateway School Sales Can Offer You
• Security: A big advantage of buying an ongoing school is that you, as the new owner, have an immediate cash flow, teachers, and students. You don’t have to build a school from the ground up; you simply take over an existing, successful school with the current owner’s assistance.
• Financing: Banks are often reluctant to finance any type of business purchase for several reasons, but mainly because a bank cannot step in and manage a business, if foreclosure becomes necessary. In cases where the school is not very profitable or if the business owner aggressively minimizes the profit shown on financial statements through significant “owner benefit” expenses in order to reduce tax liability, over 90% of these business purchases are financed by the owner. Seller financing demonstrates the seller’s confidence in the continued success of the business, even if the financial statements don’t exhibit success. We can help negotiate seller financing if it is a necessary part of the transaction. In the current lending climate, when the business owner provides financial statements and tax returns documenting robust profitability, lenders are providing 75-90% of the purchase price at closing.
• Confidentiality: Unlike the sale of real estate or franchises, the sale of an on-going school is confidential for both the seller and the prospective buyer. All inquiries and meetings are held in strict confidence. Gateway School Sales representatives are available after hours and on weekends to ensure this confidentiality is maintained.
Remember, Gateway School Sales is made up of well-trained professionals who know how to buy childcare businesses and schools. Utilize our talents and call us whenever you need assistance or have questions about the process.
Road Map to a Purchase
As a buyer sometimes it will feel like finding the right school, in the right city, with an educational culture you’ve always wanted, that it may feel you need the planets to align. Let a Gateway School Sales expert ...Read More
How to Buy
Gateway School Sales has identified 9 steps in the buying process. Those steps are: 1. Meet with a Gateway School Sales Business Broker. When you meet with a member of our staff, they will discuss the process of purchasing a childcare business ...Read More
Corporate downsizing in the U.S. over the last several years has made owning a business more attractive than ever before. As increasing numbers of prospective buyers embark on the process of becoming independent business owners, many of them voice ...Read More
Using Retirement Funds
Use YOUR 401(k) or IRA Rollover Assets to Finance YOUR Franchise or Business Start-up Although not obvious to many, including knowledgeable financial advisors, your pension, profit sharing, 401(k), 403(b), other retirement plan and rollover IRA money may be used to ...Read More
Build a Team
Buying an established childcare business or school is not the time to fly solo. This is likely one of the most significant financial events you will ever experience. To ensure this transaction goes as smoothly as possible, you need to ...Read More