Buying Existing And Operational Day Care In GA

[pmpnbs]

Does it make a good business sense to buy and operate an existing operational center at potentially lower price ( mainly because of real estate foreclosure/short sale) and operate it as a good clean day care business in GA in Metro Atlanta area.

Owner will not have any child care background (have significant higher education/university background) but will keep/hire center director and other education staff as needed to operate center efficiently.

Those with experience please suggest from business as well as operational perspectives.

[Blackcat31]

Honestly, I understand where you are coming from as to wanting to gather and collect this information but the truth is, there is NO guarantee that ANY child care business will be successful or a failure.

It is ALL highly dependent on the program, the staff, the relationship between the staff, the parents, the children and staff, the policies etc.... ALL those variables (or a combination of some or all) can make or break a child care business.

I don't think anyone is simply going to give you a "yes, it makes business sense" or "no it doesn't make sense" type of answer because in reality NO ONE really knows.

I've seen child care centers that received their land and building for free and had little or no start up costs, fail their first year in business due to kinks in staffing, policies and parent relationships.

I've seen high quality child care centers that were opened with FANTASTIC business plans, lots of funding and excellent staff and/owners fail simply because the market wasn't supplying enough clients.

They say the more you put into your business the more you can make but unfortunately in the child care field, that is simply not always true.

I've seen high end and low end centers both fail and thrive for a myriad of different reasons and most the time, those reasons were variables that we have little or no control over.

I wish I could offer you more of a perspective or better advice but honestly, the child care business is a risk.... not so much as a yearly or long term risk but as an every day risk.

One day you could be full with fantastic families, only to find yourself with low enrollment and unhappy families the very next week.

Way too many variables to be able to give you a secure or comfortable answer. It's a risk. No matter which way you look at it.

[Unregistered]

In Georgia only Early Childhood Degrees count as Education. It does not matter if you have a PHD, you are a level ZERO provider if it is not in Early Childhood.

Check out the *Decal Bright From the Start* website for info on who can and cannot operate a Childcare Center in Georgia. Chances are you will need to take quite a bit of continuing Ed, first. All the info is readily available online there to include PDF check lists, forms, mandatory supply lists, grant applications and contacts.

[pmpnbs]

So no one without Child Care Degree/Education can OWN a Day Care center in GA?

Blackcat and guest thanks for important input.

Based on the response from Guest, - So any one who own a child care business in GA have to be certified in Early Education ? Even if he/she hires a qualified Director and Staff to operate the Center?

[Sugar Magnolia]

You should contract your licensing entity to find out what your.state.requires as far as owners go. In my state, the owners don't need any requirements, only background.checks. Directors, like myself, have extensive education requirements.
I started my center from scratch. I own the real estate. I specifically AVOIDED buying a center that previously went out of business, because the location itself had a bad reputation, and all the "under new management" signs in the world cannot.erase.that..

[pmpnbs]

How much of the operating capacity is OK

Thanks for your response. If center is say operational and positive cash flow but is in trouble due to real estate values (Can not make payment as loan too high) is it OK to buy as an owner and operate with help of director?

Is it OK if center is operating at 60-70% of the licensed capacity? or need more kids enrolled to operate profitably?

[Sugar Magnolia]

As far as I know, you can own whatever you want to own, with appropriate background checks if you will ever be on site at all.
If you are considering buying a center that is currently operating, you must ask to see a profit and loss statement. If the property is in foreclosure, precede with EXTREME CAUTION. There could be liens, other complications. Speak to a lawyer, a business broker YOU contact to represent your interests, a real estate agent, other professionals.
I can't really speak to capacity, and operating costs of large centers. I own a little place, with my husband and one staffer. We only serve 15 children. We are small potatoes, I'm not much of an authority on big box centers, actually, I have outlasted 2 large centers located in the church across the street from me. The church rents out space to centers, now on the third center.

[Sugar Magnolia]

Also, be very careful buying the "business only" if the real estate is in foreclosure. You could find yourself in a heap of trouble. Better to just rent a space.and start from scratch, IMO.

[Unregistered]

Buying a Daycare

I would be really careful. Daycare is a very specialized field and it is very hard for someone who doesn't know the industry to succeed. I would also be careful with troubled businesses. I bought one that was going bankrupt and I now have a huge mess on my hands. The building was not owned by the business and my landlords foreclosed 7 months after I purchased the business. It has been 2 years and I still occupy the building, but the bank is asking more than it will appraise for so I can't finance it. They are also charging me an outrageous lease that is putting me out of business. There is no where else to move in town so I am stuck. I cannot stress enough to be careful in this kind of situation. There is so much that can go wrong.
The only smart thing I did is that I had the contract written up as an asset sale and I slightly changed the name and started a brand new LLC. So when the previous owners creditors came knocking, I was not liable.