The right business broker can be very valuable to a childcare center owner in many ways. When selecting a Business Broker, childcare center owners should consider if the broker has the experience, services, and the right philosophy to meet their needs. Some questions to ask, and why they are important:
- How many years of Business Broker experience? Of the 135 Business Brokers in the Georgia Association of Business Brokers, 70 of them have less than two years of experience in the industry. There has been a 400% turnover in the profession in the last 10 years. It takes an average of six to twelve months to sell a childcare center once the marketing starts. Some childcare center owners may start talking to a business broker a few years before they are interested in selling because the owner wants to find out what their center will likely sell for… which is helpful for retirement planning purposes. So, an inexperienced Business Broker may leave the industry before your center sells, and therefore may not be the best match with the childcare owner’s needs.
- Do you co-broker with other Business Brokers? The willingness to co-broker is important. Think about it in relationship to selling your house. How quickly would you sell if your agent only showed your house to potential buyers he or she sourced, and did not allow other agents to show your home. One large business broker who specializes in childcare centers does not co-broker. We do co-broker.
- What type of businesses does the Business Broker specialize in and what level of sophistication of the buyers do they feel comfortable dealing with? A Business Broker that works mostly with convenience stores, dry cleaners, and restaurants would not be able to provide the higher level service an experienced childcare brokers can provide. Business Broker in other industries would not have the buyer contacts to sell a childcare center.
- Does the Business Broker use a consultative approach? If so, the Business Broker might recommend delaying a sale until the timing is right to maximize the sales price rather than selling now to get the commission. Does the Business Broker consult with Certified Financial Planners (CFPs) and Certified Public Accountants (CPAs) before the business sale on structuring the transaction to maximize the after tax wealth from the sale and to minimize taxes on the estate? (i.e. Once the Letter of Intent is in hand, many of the client’s tax reduction planning strategies disappear.)
The average Business Broker sells just 25% to 33% of his or her listings – often because of problems with the business, poor documentation prepared by the broker, or the business is priced too high. Top-notch brokers will sell 75% or more of their listings.