Deciding to sell your day nursery or educational business can be a little daunting. No one size fits all and, with close to 24 years in the sector, I know that each sale can bring its own nuances and challenges.
However, considering these seven things before you sell will undoubtedly stand you in good stead!
Prepare, prepare, prepare
Buyers will want a clear picture or path of the nursery's financial health in the past and what the future may hold, so ensure you have detailed financial records, and up-to-date accounts and management numbers. Robust financial information and forecasts are a must if you are looking for a premium price.
Are you selling on a freehold basis, long leasehold basis, a standard lease, a license, is there is ground rent or are there any property covenants…? Ensuring that you have a good feel for the legal tenure of what you are selling is always important and will help avoid any unnecessary delays in the sale process.
All operational policies and procedures should be well-documented – this will help create a smooth transition of ownership. Throughout a nursery’s life cycle, it will likely face some challenges such as potential Ofsted issues or parental complaints for example, but it’s important to remember that a buyer will focus less on what has happened and more on what was done to remedy the issue and stop it happening again.
Do you have the right team in place?
Selling any business can be a complex process, so seeking professional advice from the start is essential.
Working with professionals such as a specialist agent, a lawyer, and an accountant who have extensive experience in the nursery sector and truly understand operational, performance and transactional nuances is a must. They will guide you through the process, helping to make it as smooth as possible and get the best deal for you. They will make sure that you are not legally exposed after the deal has completed, and, probably most importantly, will help to ensure that the business you’ve built up over all those years goes to the right buyer.
Know your market
Talk to your agent and quiz them about the past, current and anticipated future market conditions for selling day nurseries in your area, so that you can better understand the demand, trends, and pricing dynamics.
The key is to match when you think the time is ready to sell with when the market is hot so that you can achieve the best possible price for your business!
Are there any pre-sale improvements that you could make?
First impressions count and if a nursery is in bad shape it can leave potential buyers wondering what else may not be up to scratch. Therefore, making any necessary property improvements to enhance the appeal of your nursery to potential buyers is a great start.
Do you want to sell your setting confidentially or on the open market?
It’s up to you whether you’d like to bring your setting to the open market, or if you want to keep the sale confidential.
The latter is the most popular option amongst day nursery owners, and any agent worth their salt will know this and understand how to tailor a confidential marketing package to that specific sale.
Despite this, it’s still really important to present your nursery business for sale in the very best light – using professional photos, floor plans, drone footage, internal videos and the like – for when the potential buyers have passed their initial non-disclosure agreement (NDA), ability and funding checks.
What are you looking to achieve from this sale?
Do you want the best price? Do you want a quick sale? Who do you want to buy your setting?
It’s important to work out what your priorities are and what the best outcome for you would be. Consider all the options on the table before making a final decision.
You may need to stay on post-sale
Be prepared for a transition/handover period after you complete the sale – this is to ensure continuity of the day-to-day running of the business.
In my experience, most buyers look for a handover period of a month or so, with some simply just wanting your support at the end of the phone. The length of the transition period can be negotiated and may form part of a side agreement for a remuneration package. The key is to be flexible and to be on hand to help if required.
For more information about selling your day nursery, or for a confidential chat about your options, contact Nick Brown: nick.brown@christie.com / 07764 241 316.