Listing ID: 67593
Excellent opportunity to own a beautiful piece of Real Estate with a prime location with an operating, established and reputable daycare center that has been serving the Calvert County market for over 25 years. The center is situated just off a primary thoroughfare and conveniently located in close proximity to several prominent towns. There are a total of 8 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 including before and after school programs for children up to 15 years old with a maximum capacity of 112 children in total. The center is registered in the Maryland Excels Program and is a Level 3 facility.
The center benefits from its long-standing status in the area and currently has a waiting list for children aged 6 weeks to 3 years old as well as school aged kids. Due to COVID-19, the center was operating at a reduced capacity for a number of months in 2020 which impacted the full year revenue and cash flow numbers. As of February 2022, enrollment stands at roughly 77% of the full capacity and close to the pre-COVID enrollment numbers with 86 kids. The business has had stable revenue and cash flow growth over the last three years prior to COVID-19 (2017-2019) with compliant licensing reports. The center is 100% privately paid. There is ample parking along with nicely equipped outdoor play areas.
After a decade of operating the business, the owner has decided to sell the Real Estate and essentially give the operating business away for FREE after relocating out of the area. The owner currently spends a limited amount of time each week largely focusing 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 future owner could easily take on an active day-to-day management role if desired. The childcare industry has seen significant and sustained recent growth, COVID-19 did have an impact but business is rebounding, so don’t miss out on the chance to own a center with real estate that is a staple in the southern Maryland market.
*Please note, the Revenue claimed above is the average from 2017-2019. Average Cash Flow for an active owner operator from 2017-2019 is $154,264. If the buyer wanted to keep the business operating with the director the average cash flow would be approx. $40k less to compensate the director. Revenues/Owner Operated Cash Flow from the past 5 years are as follows; 2021: $707,642/$3,438; 2020: $693,361/$2,290; 2019: $975,939/$151,668; 2018: $889,189/$149,863; 2017; $865,958/$161,260. Prior to COVID-19, based on historical performance the business itself is worth a minimum of $375k and it is FREE with the Real Estate Purchase of $1,300,000 – Don’t let this opportunity pass you by!
- Asking Price: $1,300,000
- Cash Flow: N/A
- Gross Revenue: $910,362
- EBITDA: N/A
- FF&E: $15,000
- Inventory: $3,000
- Inventory Included: Yes
- Established: 1994
- Property Owned or Leased:Own
- Property Included:Yes
- Building Square Footage:7,290
- Lot Size:N/A
- Total Number of Employees:23
- Furniture, Fixtures and Equipment:N/A
The center occupies a 7,290 square foot standalone building situated just off a main thoroughfare in Calvert County, MD with excellent street visibility. The building sits on a 1.06 acre lot with an outdoor activity area/playground located just off the main building. There are 8 classrooms along with a full kitchen. Childcare Center Info: Total Enrollment Capacity: 112 Current Enrollment: 86 Average Pre-Covid Enrollment: 90-95 Number of Rooms: 8 Managing Director (Is the Business Owner the Director or is there an Employed Director): There is currently an active director in place as well as an assistant director, but the cash flow claimed is based on an owner operator being the director. Is the center part of any state Subsidy Program (Yes/No): Yes If yes, what is the % of parent pay vs state subsidy?: 0% Is the center part of any state Food Program (Yes/No): No
Seller will provide necessary training and support.
Owner has relocated out of the area.
Standard competition in the marketplace, but the name, reputation, and size of the center has made this center stand out above its competition.
The business has historically operated near full capacity, but enrollment numbers were down in 2020 due to COVID-19. The owners and staff have been working to bring the number of pupils back up to pre-COVID levels and the current enrollment level sits at roughly two-thirds of full capacity. This presents the future owner with the ability to grow and expand the business based on current figures.
The business was established in 1994, making the business 28 years old.
The deal does include inventory valued at $3,000, which is included in the suggested price.
The company has 23 employees and is situated in a building with approx. square footage of 7,290 sq ft.
Why is the Current Owner Selling The Business?
There are all kinds of reasons people decide to sell companies. Nonetheless, the true reason vs the one they say to you may be 2 totally different things. For instance, they might state "I have a lot of various commitments" or "I am retiring". For numerous sellers, these reasons are valid. But, for some, these may just be excuses to try to conceal the reality of transforming demographics, increased competition, current decrease in profits, or a variety of other reasons. This is why it is really crucial that you not depend entirely on a seller's word, yet instead, utilize the seller's answer together with your overall due diligence. This will paint an extra realistic image of the business's present situation.
Existing Debts and Future Obligations
If the current entity is in debt, which numerous companies are, then you will have reason to consider this when valuating/preparing your deal. Numerous companies borrow money so as to cover things like inventory, payroll, accounts payable, and so on. Bear in mind that sometimes this can imply that earnings margins are too small. Many companies fall into a revolving door of taking loans as a way to pay back other loans. Along with debts, there may additionally be future commitments to take into consideration. There may be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with vendors that need to be satisfied or may result in charges if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do operating businesses in the area attract new clients? Most times, companies have repeat clients, which develop the core of their everyday revenues. Particular elements such as new competition sprouting up around the area, road construction, as well as personnel turnover can influence repeat clients and adversely impact future revenues. One crucial thing to consider is the location of the business. Is it in a very trafficked shopping mall, or is it concealed from the highway? Clearly, the more individuals that see the business on a regular basis, the greater the chance to construct a returning consumer base. A final idea is the basic area demographics. Is the business located in a densely populated city, or is it located on the outskirts of town? Exactly how might the regional average home income effect future earnings prospects?