Business Overview

Excellent opportunity to own an established and reputable daycare center that has been serving the Anne Arundel County market for over 30 years. The center is situated in Western Annapolis and in close proximity to Route 50. There is an adequate number of classrooms in the center allowing for individualized attention and an ideal pupil to teacher ratio. The center offers programs for infants (starting at 6 weeks) up to children through age 5 with a maximum capacity of just over 80 children in total with the ability to increase capacity to 134 children. The center is registered in the Maryland Excels Program and is a Level 1 facility – a new owner can go through the steps to obtain a higher Excels level which will be beneficial to the new owner, the current owner just hasn’t taken the time to do so.

The center benefits from its long-standing reputation in the area and has been a well-known center in the market for decades. Due to COVID, the center was operating at at reduced capacity for much of 2020 which impacted the full year revenue and cash flow numbers. As of the January 2022, enrollment stands at 79 children, so almost 100% capacity which has shown the center has rebounded nicely from the pandemic. The business has otherwise shown stable revenue and cash flow numbers in recent years along with compliant licensing reports. There is ample parking along with nicely equipped outdoor play areas.

The owner currently has a director in place therefore allowing them to spend a limited amount of time each week at the center where they largely focus on general business management, organization, bookkeeping, and payroll. This represents an excellent opportunity to take over a well-run business with strong historical profitability that is run on a near absentee basis. The next owner could easily take on an active day-to-day management role if desired where they would benefit from the cash flow claimed from being an owner operating director. The childcare industry has seen significant and sustained growth in the area in recent years, so don’t miss out on the chance to own a well-known center in a growing part of Anne Arundel County!

*Please note, the revenue and cash flow claimed is based on 2021 projections as an active owner operator. The asking price of the business was based on historic and current performance of the center where we have received a pre-qualification from an SBA Lender for the full asking price.

Financial

  • Asking Price: $800,000
  • Cash Flow: $397,682
  • Gross Revenue: $1,170,000
  • EBITDA: N/A
  • FF&E: $150,000
  • Inventory: $2,000
  • Inventory Included: Yes
  • Established: 1989

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:6,491
  • Lot Size:N/A
  • Total Number of Employees:21
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The center occupies a 6,491 square foot space located in an office park setting just off Route 50 in Western Annapolis and is leased for approx. $12,778 per month. The center is situated in a mixed-use area surrounded by residential and commercial developments. There are an adequate number of classrooms, two offices, a lounge, and 2 fenced-in outdoor activity areas/playgrounds and ample storage space throughout the building. Childcare Center Info: Current Enrollment: 79 (as of January 2022) Maximum Capacity: Just over 80 children Managing Director (Is the Business Owner the Director or is there an Employed Director): There is currently an active director in place Is the center part of any state Subsidy Program (Yes/No): No If yes, what is the % of parent pay vs state subsidy?: N/A Is the center part of any state Food Program (Yes/No): No

Is Support & Training Included:

Owner will provide necessary training and support.

Purpose For Selling:

Owner is retiring.

Pros and Cons:

There is standard competition for the industry and market, but this center has been established for over 30 years and has a built up a good reputation in the area.

Opportunities and Growth:

The business has historically operated near full capacity, but enrollment numbers were down in 2020 due to COVID. The owners and staff have been working to bring the number of pupils back up to pre-COVID levels and the current enrollment level is very close to 100% capacity. This presents the future owner with the ability to grow and expand the business based on current figures and can be done by taking over adjoining space which will allow for an additional 53 kids. The landlord has offered to participate in the construction costs of $50K and to provide some rent abatement.

Additional Info

The company was established in 1989, making the business 33 years old.
The deal does include inventory valued at $2,000, which is included in the asking price.

The company has 21 employees and is situated in a building with estimated square footage of 6,491 sq ft.
The building is leased by the business for $12,778 per Month

Why is the Current Owner Selling The Business?

There are all types of reasons why people resolve to sell businesses. Nonetheless, the genuine factor and the one they tell you may be 2 completely different things. For instance, they might claim "I have way too many various obligations" or "I am retiring". For numerous sellers, these reasons are valid. But also, for some, these might just be excuses to try to hide the reality of altering demographics, increased competition, current reduction in earnings, or a range of various other factors. This is why it is extremely crucial that you not depend totally on a seller's word, yet rather, make use of the vendor's answer together with your total due diligence. This will paint a much more realistic picture of the business's current scenario.

Existing Debts and Future Obligations

If the current business is in debt, which many companies are, then you will certainly have reason to consider this when valuating/preparing your offer. Many companies finance loans with the purpose of covering points such as stock, payroll, accounts payable, so on and so forth. Bear in mind that in some cases this can suggest that profit margins are too small. Numerous businesses fall into a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may additionally be future commitments to think about. There may be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with suppliers that have to be fulfilled or may result in fines if canceled early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the location bring in new customers? Most times, businesses have repeat clients, which develop the core of their everyday profits. Particular factors such as brand-new competition sprouting up around the area, roadway construction, as well as personnel turnover can impact repeat customers and also negatively impact future incomes. One essential thing to consider is the placement of the business. Is it in an extremely trafficked shopping center, or is it concealed from the highway? Certainly, the more individuals that see the business often, the higher the possibility to develop a returning customer base. A final thought is the basic area demographics. Is the business placed in a densely inhabited city, or is it situated on the outside border of town? Exactly how might the local median house income influence future revenue potential?