Childcare Near Immanuel Hospital
This childcare center on the north side of Omaha has great expansion opportunities with minimal costs. Licensed for 56, the center has 63 FT & PT enrollees and sees an average of 42 children daily. The center sets itself apart by offering healthy meal planning, with all food prepared in-house by the center’s Cook. Due to this effort, the daycare exceeds Nebraska’s state minimum for healthy food requirements!
On staff are 5 full-time teachers (1 Lead Preschool, 2 Toddler, 2 Infant), 2 part-time Floaters, 1 Administrative Assistant and 1 Cook. The center is located in a 4,000-sq. ft. space with dedicated rooms for toddlers, infants and school-aged children, as well as a kitchen for food preparation. Outside is a fenced-in playground.
Growth exists in changing the daycare over to infants and toddlers only. This will boost daily attendance and increase sales. The daycare is also licensed for late night hours, and a buyer could explore the option of extending current hours to cover a 2nd shift. With permits in place, a buyer could knock down some walls within the center to accommodate for enrollments.
Listed at a great price, this is a highly-rated center in a well-trafficked part of Omaha that can easily continue to grow. This would be perfect for an existing daycare looking for a second location, or for an educational professional interested in owning a business.
- Location: Sorensen Parkway, north side of Omaha
- Enrollment: 63 (FT & PT) – licensed for 56 per day
- Average of 42 on a daily basis
- 24 are school age
- 95% Title XX, 5% Private
- Services: Healthy meal planning (all food is prepared on site by the center’s Cook), Step Up Program, Summer Fitness Program
- Lease: 4,000 sq. ft. / $2,600/month on a 5-year lease
- Reason for Selling: Spend more time with family
- Employees: 5 FT Teachers, 2 PT Floaters, 1 FT Administrative Assistant, 1 Cook
- Hours: Mon – Fri 6:30am to 7:30pm
- Seller Training Period: 90 days
- Growth Opportunities: With light remodeling, center could expand to add 10+ enrollments. Change daycare to only infants and toddlers. Daycare licensed for extended hours, but does not currently utilize them.
- Current Owner’s Responsibilities: Director, has a quality Assistant Director positioned to assure Director role
- List Price: $335,000
- Gross Sales
- 2017: $505,294
- Owner Profit/Cash Flow
- 2017: $104,727
- Profit Margin: 27%
- Assets Included in Purchase:
- Equipment: Standard office furniture, cribs, tables, chairs and more
- Vehicles: 1 Van
- Intangible Assets: Excellent reputation, strong Facebook presence
Cash Flow Analysis
|Description of Financial Statement||Tax Return||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$51,182||$61,773||$74,059||$56,678|
|Compensation to Owner||$42,000||$48,970||$41,823||$17,100||Selling as Owner/Operator|
|11% Tax on total W2 Salaries||$4,620||$5,387||$4,601||$1,881|
|Business Investment||$2,440||$0||$0||$0||Not business related|
|Gifts & Contributions||$4,485||$5,079||$1,534||$0||50% personal|
|Seller's Cash Flow = Total Addbacks + Net Income||$104,727||$121,209||$122,017||$76,600|
|Profit Margin||20.73 %||22.92 %||28.01 %||33.68 %|
- 21% increase in sales between 2015 and 2016
- 3-year average profit margin of 26%
- 1 Lead Preschool Teacher
- 2 Toddler Teachers
- 2 Infant Teachers
- 1 Floater (School Children)
- 1 Floater (Preschool)
- 1 Administrative Assistant (monitors day-to-day needs, reviews curriculum, general administrative duties)
- 1 Cook
Seller is the center’s Director.
- Light remodeling for expansion
- The center has the ability to knock down a wall to expand the current facility, and to accommodate 10+ enrollments
- Change daycare to only infants and toddlers
- Profits and full-time enrollment would increase if only infants and toddlers were enrolled
- School-aged children are PT and hold spots that could be better used by younger children
- Saturday services
- The daycare is licensed for Saturday services
- Depending on demand, the center could be open for extra hours on Saturday
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business. The formula used is as follows:
Cash Flow x Multiplier = Price
“Cash flow” is the sum of net income plus any owner perks and non-onward going expenses.
“Multiplier” is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).
The Cash Flow for 2017 is $104,727, and the prescribed multiplier is 3.2.
With this information, the computation result follows:
$104,727 x 3.2 = $335,126
The List Price for the business is set at $335,000.
Purchase Price: $349,000
15% Buyer Down Payment: $52,350
15% Seller Financing: $52,350
70% Bank Loan: $244,300
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $976.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $3,210.
After business expenses and loan payments, a buyer with a down payment of $52,350 would retain a profit of $54,490, which results in a 104% return on investment in the first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $349,000 with the terms listed above, the coverage ratio is 2.08.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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