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Fully-Enrolled Daycare Just Outside Omaha

CASH FLOW
$38,450

Specifications

  • Price
    $260,000

  • Cash Flow
    $38,450

  • Revenue
    $544,228

  • Equipment
    $23,117

  • Location
    15 miles outside of Omaha

  • Reason for Sale
    Moving out of state

  • Employees
    17 - including teachers & assistants

  • Down Payment
    15%

  • Intangible Assets
    Established name and reputation

Located 15 miles outside of Omaha, this fully-enrolled daycare is rapidly. With a staff of 17, growth exists in acquiring the bay next door, which would add 1,400 sq. ft. and room for an additional 40 children. In operation for 4 years, enrollment consists of 75 full-time children and 12 part-time attendees. The fastest growing segment is 2-year-old children, and the seller predicts that this will be the best area for increased sales.

The daycare is located in a 4,400-sq. ft. building and is comprised of 5 classrooms. While the space does have a kitchen, the meals are currently catered in. Attendees range from 6 weeks in age to 13-year-olds, and each age group is served by 2 full-time lead and assistant teachers.

For sale due to the owner moving out of state by the year’s end, the Assistant Director currently operates as a Director, as the owner has recently phased out of the daycare. Still completing month-end duties, the owner does see that the Assistant Director could be officially moved into the Director position, with the Closing Manager becoming the Assistant Director. A new owner could implement these changes, or decide to work in the business and take back the Director position.

Listed at $260,000, a buyer could become the owner of a successful, in-demand daycare for just $39,000.

Business Highlights

  • Year Established: 2013
  • Location: 15 miles south of Omaha
  • Demographics: Children from 6 weeks to 13 years
  • Enrollment: 87 full-time
  • Building: 4,400 sq. ft. with 5 classrooms
  • Reason for Selling: Moving out of state
  • Employees: 17 – includes teachers and assistants
  • Hours: Mon – Fri 6am to 6pm
  • Seller Training Period: 90 days
  • Growth Opportunities: Expand into bay next door – will create room for up to 40 additional kids
  • Current Owner’s Responsibilities: Owner has recently phased out of the business, with the Assistant Director handling the day-to-day responsibilities; owner does complete month end duties

Financial Highlights

  • List Price: $260,000
  • 2016 Gross Sales: $544,228
  • Cash Flow: $38,450
  • YOY Growth: 2017 is projected to gross $638,522 in sales – a 14.7% increase with no marketing
  • $23,117 in FFE included in the purchase price
    • Equipment: $2,500 in furniture and fixtures
    • $20,617 – 2015 van
  • Intangible Assets: Established name and reputation

Cash Flow Analysis

Description of Financial StatementP&L Statement
January - June
Tax ReturnNotes
20172016
GROSS SALES$319,261$544,228
Annualized$638,522
Net Income Shown on Financial Statement$35,014$12,747
ADDBACKS
Depreciation$0$4,060Non-cash item
Interest$4,648$7,997Non-onward going expense
Amortization$0$11,966Non-onward going expense
Non-Business Telephone$600$1,200$100/mo for 1 personal cell phone
Insurance Premiums for Owners: Health, Life, Auto$0$480Owner's personal insurance
TOTAL ADDBACKS$5,248$25,703
Seller's Cash Flow = Total Addbacks + Net Income$40,262$38,450
Annualized$80,524
Profit Margin12.61 %7.07 %
  • 2017 is projected to gross $638,522 in sales, a 14.7% increase from 2016 with no marketing
  • A new owner could increase cash flow by consolidating employees or acting as Director and replacing either the Assistant Director or Closing Manager.

Employees

Additional staff includes a PT Float Teacher and 4 PT helpers.

 

The current owner has phased out of the business, but still holds the title of Director. The Assistant Director handles the day-to-day duties of the Director and is essentially an Acting Director, with the seller suggesting promoting the Assistant Director to Director, and the Closing Manager to Assistant Director.  Although absentee at this point, the owner does perform month-end duties.

Growth Opportunities

  • Acquire bay next door
    • Would add an additional 1,400 sq. ft. and room for up to 40 more children
  • Demand for 2-year-olds continues to rise and adding more space would allow for additional preschool rooms and preschool enrollment
  • A new owner could take a more active role in the daycare and consolidate some of the positions
    • The current owner was more involved previously but has since phased out
Cash flow would be increased by an owner reabsorbing the Director’s duties and either eliminating some positions or scaling back some hours

Valuation Details

The Firm Business Brokerage used a Cost-to-Create methodology to value this business, determining that it would take far more time, energy and resources to recreate the same facility and reputation than to purchase it for $260,000.

 

The List Price is suggested at $260,000.

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