What Are the Initial Questions I Should Ask About an Early Education Company If I’m Interested in Buying It?  

The Initial Questions have only one goal. Determine whether a company is interesting to you or a waste of your time as quickly as possible. While the questions won’t be exactly the same for everyone, the following should cover most if not all of your first look.

  1. Location
  2. Annual Revenue
  3. Annual Cash Flow. Specifically, EBITDA and EBITDAR. It is important to closely define “cash flow” as many people have very loose definitions for this term. A misunderstanding here can cost you time and money.
  4. Current appraised value of any real estate included in the deal.
  5. The original cost or current market value of any furniture, fixtures and equipment (FF&E) included in the transaction.
  6. The market value of the business component and how that market value was determined.
  7. The total asking price.
  8. Whether the company is properly licensed and in good standing with regulators.

You’ll certainly have other questions, but these first few can save you time, energy and money when you’re trying to identify the right candidate.

As always, we hope it helps.

Best to you…

Brad Barnett, President BFS®

BFS® is the Largest Non-Governmental Provider of FREE Resources to the Early Education Industry. If you have questions on a topic, watch a quick video by going to our YouTube Channel or access information by clicking on the Instant Q & A tab at the top of this page.

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