How Much Would You Buy This Daycare For??

[missy]

Hi folks! I could really use some advice from you:-)...
I would love to buy a particular daycare in my area but I have no idea how much I should pay.
The owner is asking $95k but only for the business! Could that be right?? Here are the approximate figures: Its a 44 child capacity and she has 29. She receives $185k a year from parents. Rent is $2100 and all the other expenses you are familiar with of course. She says her tax records after write offs shows she nets about 26k. 8 part time employees.

It seems awfully high for barely any physical property. But it would be sooo much nicer for me to buy an already established daycare. What do you think? The business seems to have a good reputation and prices on the higher end so nice clientele.

Thanks!!!:

[Familycare71]

My personal opinion is that unless someone on here does dc in your area you would probably have to do local research. Prices vary a ton by area.

Over all I would look at:
What your net income would be- after your daycare payment (assuming you don't have cash outright), rent, I would look at averages of enrollment for about 5 years rather than current enrollment, supply fees, employee fees, etc.

$95,000 seems high to me for a business and supplies but honestly I have no idea! .
Also a good broker would probably be a good idea to research some things for you.

[Michael]

$95k for something that only nets you $26k a year? I don't think so.

[butterfly]

I think that sounds like a lot too. That seems like a lot of money to spend to only make 26k/year. Then the building isn't even yours when it's all said and done. I don't know where you are at, but in my area - that would be outrageous! I could purchase a whole building and most of the equipment for not much more than that...

I would make sure to speak with the current landlord as well - or will the seller be your land lord? I would certainly want to make sure that they are still willing to rent it as a daycare business after the sale goes through.

I'd want to know the motive for selling.

[Margarete]

I would also want to know how many hours she puts in to 'make' 26k. Seems how the other employees are all part time, I'm guessing she puts in a lot of hours, and doesn't make a lot hourly.

[missy]

Thanks for your thoughts, you all had some good points. I have to wonder what her motivation is for selling too. I think I am going to start my own daycare:+)

[LK5kids]

I think that sounds like a lot too. That seems like a lot of money to spend to only make 26k/year. Then the building isn't even yours when it's all said and done. I don't know where you are at, but in my area - that would be outrageous! I could purchase a whole building and most of the equipment for not much more than that...

I would make sure to speak with the current landlord as well - or will the seller be your land lord? I would certainly want to make sure that they are still willing to rent it as a daycare business after the sale goes through.

I'd want to know the motive for selling.

And a lot of work for 26K! A center in my town is for sale for $145,000.....building, property, all equipment. It is licensed for 50 kids. I thought about buying it for about a minute and thought NO! So glad I didn't buy it!

[DaisyMamma]

Is the 26k your salary? Or is your salary included in the write offs somehow?

I would consider it. You're still able to enroll another 15 kids, right?

[preschoolteacher]

$95k for something that only nets you $26k a year? I don't think so.

I agree. No way.

I expect to make that much money doing daycare from my home with 5 kids each day. No extra rent, no employees to manage and pay, no 29+ families to work with.

[missy]

The 26k is after writeoffs. if s about 75k before those. The main issue for me is that if I would lose the lease for some reason I would lose everything!