Gwinnett: Long-Established Daycare with Potential – Price: $250,000 – Cash Flow: $74,000

This Childcare center is located in Northeast metro Atlanta. The current Owner has always kept the Center’s prices to be the lowest of ALL competitors. This business is well located on a main street with high traffic count and good access.

Licensed Capacity: 118, Total Enrolled: 59 (including full-day (35 kids) and after-school (24 kids)). Rates for infants: $155, Rates for 3-year-olds: $135. Has one GA Pre-K classroom and the food program.

Real Estate was acquired by the current owner in 1999 for $425,000. The value of the Furniture, Fixtures, & Bus is $50,000. Square feet of facility: 6,000, six classrooms, ¾ of an acre of land, one large bus with a capacity of 36 passengers. Building was first used as a childcare center in 1975. Center has 10 employees plus owners.

Since 2006, the average Adjusted Cash Flow to the Owner is $94,000 with a yearly high of $114k (2006) and a yearly low of $74k (2011). This Childcare center has always produced positive Cash Flows over many years. The current owner (husband and wife who are both in their 70’s) have owned the center since 1999 and are ready to retire. The Owners may have semi-retired this last year because the Center’s lowest revenue during the last decade was 2011. Revenue has been: 2008: $304k, 2009: $279k, 2010: $263k, and 2012: $258k. Adjusted Cash Flow to the Owners has been: 2008: $92k, 2009: $101k, 2010: $88k, and 2011: $74k. Adjusted Cash Flow for 2012 and 2013 was around $74k.

With the addition of just a few more children, this center has the ability to return the profits to what it has been fairly consistently over the years. The Seller believes that with a more motivated owner (like they were in the past), the center could easily produce yearly profits of +$94k,… which is why the owner is willing to provide some seller financing.

This center needs a new coat of paint and updated playground equipment to make it sparkle with potential new parents/customers. An owner with the energy to refocus on marketing (the center does not have a website) and enrollment has a wonderful upside to look forward to. With just 25 more children enrolled, the weekly gross could increase by $3,400 which would drive profits up. This business has excellent potential. This is an extremely low cost entrance into a daycare business. A buyer experienced with childcare can buy this center with only $80k equity down payment in combination with seller financing and bank financing.

A new financial qualified Buyer will likely have yearly debt service payments of $29k, which, using the current Cash Flow, will allow the Buyer to put $45k in her/his pocket each year in addition to reducing the principle of the debt by an additional $10k. Buyer will also get the real estate at a 50% discount from what it was worth per-recession.

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