Donna Dailey M.Ed., LREB, SBA, BEC, CVA – Founder & CEO of ChildCareOwner.com, has over 28 years of childcare mergers and acquisition and real estate experience. Donna has been helping people buy, sell, and improve child care businesses since 1995.
As a business analyst, Donna has helped hundreds of childcare owners improve their childcare business’s profitability, financial health, and value.
Donna focuses on creating more ChildCareOwner.com resources and training programs that support the creation of more independent childcare business success stories. And the continued growth of the specialized childcare advisory services available through ChildCareOwner.com
Since 1995, I have worked with countless childcare business owners to turn their childcare business around – going from losing money to making money. It is always such a great feeling of accomplishment for everyone involved to turn a childcare business around – particularly when the turnaround means keeping the
Whether it is that back deck you have wanted to add to your home or the new program you have contemplated adding to your childcare business for years, often the hardest step is the first step – just getting started on the project. However, procrastination is a stumbling block for
The challenges in the Child Care Industry are like a Rubik’s Cube, a complex puzzle. Much like with every turn of the Rubik’s Cube, you are either one step closer to solving the puzzle or getting further away from a solution. As the challenges in the child care industry continue
Most independently owned child care businesses either got started with an SBA (Small Business Administration) backed (meaning backed by the US government) loan – a 7(a) loan or 504 loan, or have used an SBA loan to remodel, expand, or build a new child care center. For several reasons, including
Having worked as a child care business mergers and acquisitions advisor since 1995, I know that when a child care owner contacts me, they are often interested in selling their child care business. One of the primary things they would like to know is its value. Knowing the value is
The value of child care real estate is often determined by the capitalization rate – CAP Rate real estate investors require and the level of associated risk.
A child care business-specific accounting – chart of accounts is crucial for any child care owner to assist with financial management. This comprehensive financial tool categorizes all financial transactions, providing a clear overview of the income and expenses of running a child care business. Using a general business chart of
“If You Hide the Money Too Well, Nobody Will Be Able to Find It.” When I started my business brokerage career in 1995, it was common to find that the business owner was not reporting all business revenues. In addition, they were also running lots of personal expenses (cars, house
Earlier this year, I celebrated 29 years in the child care industry. My story and journey are different from most, as I have never worked in child care—at least not in the traditional way of providing care and education for young children. My story began in 1995 when I founded
Every child care business operates in a facility—a building and land. Some child care owners lease the building and land from a third-party owner. The owner of the building and land, “real estate,” determines how much rent they require. This “third-party,” “arms-length” relationship often increases the likelihood that the child
As a childcare business owner, one of the most important numbers you can understand is your childcare business’s break-even point—enrollment break-even, gross revenue break-even, and classroom break-even. The “Break-even point” refers to the amount of sales—products or services a business must sell to cover all costs. Applying this to childcare,
Childcare businesses, just like people, can be described as either healthy, a little sick, anemic, or gravely ill. When sick, humans often need a consultation with a doctor, the right medicine, and often a change in diet, lifestyle, habits, or a change from things that lead to their illness. We
If you want to increase the value of your childcare business, the more you get these things right, the more your childcare business is worth. 10 Key Things That Increase Child Care Business Value Competent management team in place – not reliant on the owner Consistent, high profits with organized
In my 28 years of working in childcare business mergers and acquisitions, I have met and worked with thousands of childcare business buyers. From the individual buyer looking to purchase their own child care business – to the business development officers making acquisitions for large regional and national child care
Whether you plan to sell your childcare business soon or years from now, it is essential to ensure you prepare your business for sale. These steps can be implemented in any order, and depending on your desired timeline for exiting your business, it can take months to as little as
All childcare business owners should aim to increase profits and business value. Your childcare business is likely your largest investment and a substantial portion of your net worth. Therefore, you must actively manage your business profits to protect the value of your childcare business. Unfortunately, most childcare owners struggle with
This is the question that child care owners asked just after, “What is my child care business worth?” Commonly, the real estate – land and buildings associated with a childcare business- is often more valuable than the childcare business. This is due to the high land cost and the cost
One of the most frequent questions I have been asked over the last two years is – “How do buyers look at grant funds and business value.” The answer – it depends. Grant funds are like all other funds that are non-recurring. Whether it is a one-time “grant fund” for
In the training workshops I conduct and my meetings with childcare owners, I find them confused about why childcare business buyers buy and what the buyers are willing to pay for. Why Buyer Buy – and What They Will Pay For are not the same; let me explain. A buyer
In recent years I have received an increasing number of calls (more than in years past) from childcare business owners about selling their childcare business and owner financing. However, the involvement of owner financing in selling a childcare business or any small business is common. In transferring small, medium, and
The Endless Child Care Buyer Calls, Emails, and Letters How many calls, emails, and letters have you received this week from people interested in buying your child care business? If you are like most child care business owners, particularly a large child care business owner, you have probably been contacted
For many childcare owners, 2022 has been another year of high stress, labor shortages, and frustration. How will 2023 be different? In most states, childcare business owners will continue to receive Stabilization Grants for all or part of 2023. The goal of the stabilization grants is to make individual childcare
Every child care business operates in a facility – building and land. Some child care owners lease the building and land from a third-party owner. The owner of the building and land “real estate” determines how much rent they require. This “third-party,” “arms-length” relationship often results in the greater likelihood
Did you know surveys indicate that three out of four (75%) business owners regretted the decision to sell their business? Unfortunately, the statistic is true. Business owners often note three primary reasons for regret: One, lack of preparation. They realize they should have started planning their exit much earlier and
Although there are many things that can prevent or delay a child care owner from exiting their business, the number one reason is Value Gap. What is Value Gap? Value Gap is the amount of money needed or desired and the actual value of the child care business – how
Tuition Collection The collection of tuition fees is a constant challenge for most child care centers. However, the consistent, timely collection of tuition fees is critical to the cash flow and long-term success of a child care business. None payment and slow payment of tuition can be avoided, however, by
If you desire is to own a child care center, you basically have three options to accomplish this goal: buy an existing center, convert a space or building into a child care center or build a new center from the ground up. Buying an ongoing center with children enrolled and
The saying goes, “If you are in business, your business needs a website.” And a child care business is no different. Not so many years ago, parents began their search for local child care centers by looking in the Yellow Pages. However, today, parents are more likely to start their
The financial performance of child care businesses is often “assumed-to-be” far less than businesses in other categories. Although operating a child care business does have it challenges, the growth of child care businesses and annual sales outpaced many other business categories in the U. S. in recent years. According to
Collecting tuition is probably one of the hardest things for childcare Owners and Directors to do. Speaking to parents about their payments is not the “fun” part of the job, but it must be done. Unfortunately, you will have those parents that will not pay their tuition without a friendly
Over the years, when providing financial consulting for a child care business owner, I discovered they were factoring their accounts receivable (unpaid tuition). So, what is receivable factoring, and is it appropriate for child care businesses? Accounts receivable factoring is another method of receivables management and working capital funding to
Childcare is a business. A lot of times when people open a child care business they may open it with the impression “if I open it they will come”. Well, that is not always true. The truth is that childcare centers have to be marketed just like every other business.
The cost of marketing to find and enroll a new child far exceeds the cost of keeping children already enrolled in your center. The following are five tips for maintaining enrolled children. 1. Keep parents happy. Parents that are happy with you and your employees are less likely to take
This year is coming to an end in just a few short weeks. Are you ready for 2018? Most childcare owners would respond “No.” Moreover, the thought of trying to find time to add one more thing to the “to do” list does not excite the already frazzled childcare owner.
While taking the steps to start a child care business, most owners are already dreaming of the day they will sell their center for a substantial sum. The problem is – most owners are so busy running their business little time and effort is spent engaging in activities that improve
Three Tips to Capture Visitors Attention Studies have shown that the majority of visitors spend less than 8 seconds on your website. That means you only have 8 seconds to capture a parents’ attention. Here are three simple child care website design tips that will capture visiting parents’ attention and
What Does a Lender Look For? The 5 C’S of Lending Lenders and investors look not only at the business numbers when making a loan but also take into consideration intangible things. These intangible considerations are often referred to as the five C’s: 1. Character – it is important to
If your local market is typical, you’ve probably noticed the number of child care providers in your area increasing at a faster rate than the number of children needing care. As an independent operator, chances are you don’t just have more competition, but in particular, more competition from chain operators who are very
Increasing Cash Flow Successful cash flow management requires managing the money that comes in and flows out of your child care business. The goal is to maintain smooth, consistent cash flow. Large increases in expenses and drops in revenues create uneven cash flow situations. It is important to predict and
Whether you plan to turn your child care business over to a family member some day, or plan to sell your business at some point in the near future or are planning to personally operate your business for many years to come, you should be striving to increase the value
Understanding Break-Even Break-even is the minimal amount of income/revenue a child care center must earn to cover all expenses without losing money or making money. Therefore, all income above the break-even point would be profits. To calculate your center’s break-even, add up all of the operating expenses for a month,
Successful cash flow management requires managing the money that comes in and flows out of your child care business. The goal is to maintain a smooth, consistent cash flow. Large increases in expenses and drops in revenues create uneven cash flow situations. It is important to predict and operate your
Most folks do not get excited about reviewing statistics. However, child care owners can gain available insight from recently published small business internet marketing statistics. Let’s take a look at each of the stats represented in the infographics to the right and how you as a child care owner can
Many child care owners overlook the importance of technology in operating a successful child care business. Of course, televisions, radios, computers, and other technology types are common in the classroom environment. However, the most important technology in a child care business is the technology that allows you to operate your business more efficiently
Preventive Maintenance – A Cost or a Savings? Preventive maintenance is planned or scheduled maintenance with the goal of preventing breakdowns and failures by keeping things repaired and in good working condition. Preventive maintenance in a child care business would include regular evaluation and service/repair of all mechanicals. Mechanicals being,
Demographics and market research are not just for large companies. Every business – including child care businesses have much to gain from knowing some basic market area demographics. Demographics are valuable to child care businesses for many reasons here are five: Defining your ideal customer (parent). Can you as a
When seeking a location for a new child care center, individuals often overlook great opportunities in “repurposing” or “adaptive reuse” of existing buildings and space. Repurposing or adaptive reuse refers to the process of reusing an existing building for a purpose other than which it was originally built. A great
We are often asked by child care owners and individuals wishing to purchase or start a child care business, “how much does it cost to buy a child care franchise”? In the table below, we have compiled information on twenty child care franchises. This information was obtained from websites and
If your goal is to sell your child care business in 2018, you should start the process today. Why? The average length of time to sell a childcare business is about nine months to a year. Yes, you can give your business away pretty quickly by accepting far less than
Most business owners, including the owners of child care businesses, often agonize about selling their business for a few years before making the final decision to move forward and offer the business for sale. A serious look at the business to identify areas in need of improvement should take place
“If it wasn’t for the “paperwork” running a child care business would be more fun.” Unfortunately, the IRS says you must keep records as longs as it may be necessary to support the income and deductions you reported on your business and personal tax return. And, of coursed, the length
When starting a child care business, owners can select from different operating structures – sole proprietor, partnership, a for-profit corporation or non-profit corporation. For simplicity, the various operating structures can be divided into two categories – for-profit and non-profit. The majority of child care businesses operate as for-profit corporations. However,
I have been selling child care businesses since 1995 and speak with hundreds of child care owners and potential buyers each year. In my discussions with child care owners, I often find that they have been planning for years to sell their child care business to a buyer or “type
Your accountant should be looked at as a valuable member of your professional team. A qualified accountant can provide you with advice on your accounting system, tax planning, estate planning, and financial management. What should you look for when choosing the right accountant? Use the 50% Rule – make sure
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