10 Easy Steps to buying a Childcare Centre with ASL Real Estate
1. Talk to a Lender about Finance
If you need to arrange finance, you must speak to a lender before requesting information about centres. Obtaining a loan for a business or commercial property is very different to buying a house. Of course we don’t expect you to have pre-approval but you should find out how much the bank is prepared to loan you based on your personal circumstances.
There are many expenses you need to consider if you proceed to making an offer on a centre. You will need to accompany the offer with a deposit of 10% and you should check the lease of the centre you are buying as there will usually be a bond payable to the landlord and this is sometimes three months’ rent. You should also consider how much working capital you will need to run the centre and if you intend to make any improvements. Engage a lawyer to complete your transaction and if you are new to the industry, it is a good idea to engage a consultant to help you with your licence application.
2. Research the industry
Find out all about what you need to know about running a centre. The best place to start is here;
3. Finding out what is for sale?
You will notice that our listings on the internet or on our regular updates provide very little information about the centre. Selling a child care business is highly confidential in order to protect the families, children and the staff who work at the centre. At ASL Real Estate, we will ask you some questions before giving out information about a centre:
• Do you own any other centres?
• Do you currently work in child care?
• Will you be working in the centre?
• Have you run a business before?
• What size centre are you seeking?
• What type of centre do you want to own?
• Where do you live? Is it important to be within a certain radius of the centre you buy?
• If you are obtaining finance, have you spoken to a lender?
These are just some of the things we need to know about you before we disclose information about the centres we have for sale. Our vendors have entrusted us with the sale of their precious asset. We must be satisfied that the centre is a good match for you.
4. Sign a confidentiality agreement
Australian Sales & Leasing require that intending purchasers sign a Confidentiality Agreement before supplying you with the location of the business and the owner’s financial information.
We stress the importance that you keep EVERY detail regarding the centre strictly confidential, including names & locations of the centres. If you have a partner for business dealings, they must also sign an agreement. You should take great care when discussing your plans for buying a centre that you do not inadvertently identify a centre that is for sale to any person.
You may naturally, seek the advice of your accountant or legal adviser regarding the purchase of your business. There is provision for this under the terms of the confidentiality agreement.
5. Receiving information about the centre
After you have signed a confidentiality agreement, you will receive an information memorandum about the centre. Some of the information may include:
• Profit & Loss
• Plan and photos of the centre
• Occupancy details
• Lease schedule
• List of toys, equipment & chattels (sometimes provided at a later stage)
• Copy of Licence
• Staff Roster and Wages Summary
• Copy of Council certificates
6. Visiting the Centre
You should only visit the centre by making prior arrangements with ASL Real Estate. Appointments are made on a case by case basis and may be during operating hours or after hours.
7. Making an Offer
Now that you are ready to buy, you can make an offer to buy the business. Terms will be negotiated and agreed to by both parties, a 10% deposit paid, contracts will be prepared and signed and you can make your formal loan application.
8. Making your Licence Application
To ensure that your application is processed in a timely manner, make sure that you have submitted all forms and requirements at the same time. If this is your first centre, sometimes it is worthwhile to engage professional help! Ask our agents for advice about this!
9. Your Licence has been approved!
The old owner will advise the staff and families that the business has been sold, solicitors will arrange the settlement date and then after settlement, you are ready to start running your new centre.