How to Buy a Daycare Business

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A daycare is a place where parents leave their babies and small children while they work. Daycare workers and owners make sure that infants, toddlers and young children have their physical and emotional needs met while their parents are away. A daycare may be part of a larger chain, or it may be a small center owned by a single person. The decision to purchase a daycare will usually involve several factors.

  • Decide what kind of facility you want to purchase. Are you interested in taking over a small local business with just a few children, or would you prefer to be part of a national chain? A local business may offer a loyal client base and have a business model you could easily adapt or revise. Larger businesses may have access to more resources but require compliance with more rigid rules.

  • Carefully examine the financial records of the daycare business. Records should include expenses such as daily food costs, electricity and employee hourly wages. Wages should also include social security costs. Profits should be calculated on monthly as well as yearly basis. This can help you determine if you should keep your center open during certain months of the year, such as July, when people are more likely to take vacations.

  • Talk to current clients. Any daycare that has been in operation for a prolonged period should have records of clients. Clients can help you pinpoint what the previous owner did well and what can be improved upon. This is valuable knowledge as you attempt to increase the profitability of the business.

  • Decide what role you want to have in the daycare. Would you prefer to be involved in all aspects of your business or play a more administrative role? Either way, a degree in early-childhood education serves you well for owning a business that caters to the needs of small children and their parents.

  • Talk to employees. Daycare staff members can help you understand the needs of the business firsthand and how best to run it. Do not hesitate to ask questions about workers' background, salaries and hourly work schedule.

  • Make sure that the center is in compliance with all state requirements. State laws governing daycares vary. Many states require a certain number of staffers per child. Make sure that the business meets all such requirements.

  • Make sure that you have all licenses required to operate a daycare.

  • Obtain financing and sign contracts to purchase the business. Financing can be in the form of your own savings, a bank loan or co-ownership with someone else. Consider all aspects of each form of financing before purchasing the business.

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