Opportunities
West Omaha Child Care w/ Consistent Staff
Sold
Great location near a high-traffic intersection!
Specifications
Offering high-quality childcare in a family atmosphere is what this center does best! With a dedicated focus on providing safe, loving, and educational care for children is the driving force behind this business. The environment is bright, creative, and clean. The education is engaging and entertaining. Ensuring the safety and education of the children from six weeks old to thirteen years is of utmost importance to the owners of this facility.
Providing daily care is an outstanding team of knowledgeable and experience teachers. Providing consistency of care is important to development and many teachers have been with this facility for over 4 years. The current owner is the director, but this business can certainly run smoothly as an absentee business. The assistant director is able to be promoted to director, while a teacher can be promoted to assistant director. This internal promotion will allow a new owner to cover the necessary supervision duties while keeping the increase of expenses low.
This facility has six classrooms, a kitchen, restrooms, and a large play area. The owner of the building has been supportive of expanding the footprint of the building to increase capacity, if desired.
Business Highlights
- Year Established: 2004
- Location: West Omaha
- Center Capacity: 99
- Enrollment: 105+
- Services: child care for children 6 weeks to 13 years, occasional drop-ins, summer care
- Lease: 6,000 sq. ft.: 6 classrooms, kitchen, reception, restrooms
- Reason for Selling: New career
- Employees: 21: Assistant Director (1), Teachers (20)
- Hours: M-F 6:30-6:00
- Seller Training Period: 90 days transition
- Growth Opportunities: Advertise, expand the facility, expand hours, continue to offer high-quality care to maintain enrollment
- Current Owner’s Responsibilities: Owner/operator: 20 hours/week
Financial Highlights
- List Price: $560,000
- Gross Sales:
- 2018: $846,391 Annualized
- 2017: $726,147
- 2016: $621,028
- Cash Flow:
- 2018: $249,518 Annualized
- 2017: $185,265
- 2016: $88,605
- Assets Included in Purchase*
- Equipment: Toys, tables, chairs, playground set, kitchen appliances, office items
- Intangible Assets: Family atmosphere, knowledgeable and well-trained staff who have years of tenure with the company, happy customers
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-July 10 | P&L Statement | P&L Statement | Notes |
| 2018 | 2017 | 2016 | ||
| GROSS SALES | $455,749 | $726,147 | $621,028 | |
| Annualized | $846,391 | |||
| Net Income Shown on Financial Statement | $118,006 | $108,631 | $65,294 | |
| ADDBACKS | ||||
| Compensation to Owner | $8,300 | $51,300 | $18,650 | |
| 11% Tax on total W2 Salaries | $913 | $5,643 | $2,052 | |
| Interest | $3,769 | $6,060 | $408 | |
| Auto-Personal Use | $3,150 | $13,570 | $942 | |
| Miscellaneous | $218 | $0 | $0 | |
| Gifts | $0 | $61 | $0 | |
| Maintenance | $0 | $0 | $1,259 | One-time cost for new carpet |
| TOTAL ADDBACKS | $16,350 | $76,634 | $23,311 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $134,356 | $185,265 | $88,605 | |
| Annualized | $134,356 | |||
| Profit Margin | 29.48 % | 25.51 % | 14.27 % |
- 2017 profit margin: 26%
- Anticipated 2018 profit margin: 29%
Services
Childcare
- Infants
- Six weeks to six months
- Six months to one year
- Toddlers
- One to one-and-a-half
- One-and-a-half to three
- Preschool
- Three to four
- Pre-Kindergarten
- Four to five
- School Age
- Five to thirteen
- Summer programming
- Title XX is accepted
Employees
- Assistant Director (2)
- 1FT, 1PT
- Teachers
- Infants
- Six weeks to six months (2-3)
- Six months to one year (2)
- Toddlers
- One to one-and-a-half (3)
- One-and-a-half to three (3-4)
- Preschool
- Three to four (2)
- Pre-Kindergarten
- Four to five (2)
- School Age
- Five to thirteen (3)
- Summer programming
- Infants
Growth Opportunities
- Advertise
- Expand the facility
- Expand hours
- Continue to offer high-quality care to maintain enrollment
Valuation Details
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 Prescribed Multiple = Fair Market Value
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
For this business, a 2017 Cash Flow was used with a prescribed multiple is 3. With this information, the computation is as follows:
$185,265 x 3 = $555,795
The Fair Market Value found above positions the business List Price at $560,000.
Funding Example
Purchase Price: $560,000
15% Buyer Down Payment: $84,000
15% Seller Financing: $84,000
70% Bank Loan: $392,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,566.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $5,151.
After business expenses and loan payments, a buyer with a 15% down payment of $84,000 would retain a profit of $104,656, which results in a 125% 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 $560,000 with the terms listed above, the coverage ratio is 2.3.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857