Buying Another Preschool: What Every Childcare Owner Should Know

If buying another preschool is on your mind, congratulations—this can be a rewarding step for you and your community! Whether you’re hoping to build on your success or add new sites, the purchase process is about more than the numbers. Here’s a simple, friendly guide full of practical advice and things to keep in mind as you consider buying your next childcare location.

1. Financial Health: Look Beneath the Surface

Before anything else, spend time with the preschool’s financial records. Get comfortable with what’s coming in and what’s going out. Start by asking for at least three years of profit/loss statements, cash flow reports, and tax returns.

Helpful Tips:

• Compare reported profits to actual cash flow—sometimes there are hidden expenses like repairs or supplies that aren’t immediately obvious.
• Check which costs take up the biggest percentages (staff usually accounts for 45-55% of revenue).
• Look for consistent income streams: are tuition payments predictable each month, or does the center rely on occasional grants and donations?

Action Items:

• Create your own budget template. Even a simple spreadsheet lets you see rent, payroll, supplies, food, insurance, and utility costs side-by-side.
• Ask for details about tuition rates, enrollment fees, and any other income sources.

2. Licenses & Compliance: Double-Check Everything

Every region has its own licensing requirements, so digging into permits and certifications should be a top priority. Remember, preschool licenses and contracts are often non-transferable, which means you’ll probably need to reapply if you buy the business.

Helpful Tips:

• Secure a checklist for health, fire, safety, and zoning permits.
• Make sure the facility has passed recent inspections and that records are up to date.
• If the center boasts valuable certifications (like NAEYC accreditation), check if those can transfer or be renewed.

Action Items:

• Contact your local licensing authority early—get a timeline for application and what to expect during transition.
• Plan for at least 30 days’ notice to families and licensing departments.

3. Building & Safety: Walk the Property

Buying another preschool means investing in a safe, well-maintained facility. Walk through classrooms, outdoor play spaces, kitchens, and all bathrooms. Safety standards in every state matter—and little repairs add up quickly.

Helpful Tips:

• Inspect for age-appropriate furniture, outdoor fencing, working fire alarms, and functioning HVAC.
• Look for secure storage spaces for cleaning supplies and meds, plus childproofed design everywhere.

Action Items:

• Hire a licensed inspector to spot building issues.
• Document what needs updating, so your budget stays on track.

4. Enrollment & Market: Know Who You’ll Serve

A profitable preschool depends on steady enrollment and local market demand. Review class sizes, waiting lists, and retention rates. Compare these numbers to local population data—especially the number of young families moving in or out of the area.

Helpful Tips:

• Ask for historic enrollment trends—has the school grown, stayed steady, or declined?
• Find out the staff-to-child ratio and if it meets best-practice standards.

Action Items:

• Map other preschools nearby to see what competition looks like.
• Research tuition rates in your region for benchmarks.

5. Staff Quality & Retention: Meet the People

Your staff is your center’s heart. Look for qualified, committed teachers and assistants, and find out what keeps them happy (or what drives turnover, if that’s high). A strong, stable team supports enrollment and provides consistency for families.

Helpful Tips:

• Ask about professional development, health benefits, and pay rates compared to other centers.
• Check average tenure for teachers and aides.

Action Items:

• Meet current staff, if possible—listen to why they love working there and what could be improved.
• Plan to offer welcome meetings and open communication about any transition changes.

6. Reputation & Community Connections: What Do Families Say?

A preschool with a strong reputation is easier to grow. Parent reviews, social media mentions, and local partnerships tell you a lot about how the school is perceived.

Helpful Tips:

• Read online reviews for comments about curriculum, safety, communication, and kindness.
• Ask current families for their perspectives.

Action Items:

• Attend a PTA or family meeting before finalizing your purchase.
• Explore existing partnerships with nearby schools, community groups, or businesses.

7. Legal Documents and Contracts: Be Thorough

Review every contract: property deeds, vendor agreements, maintenance and supply contracts, software licenses, and insurance coverage. A careful review now prevents headaches later.

Helpful Tips:

• Double-check if there are outstanding legal issues or payment disputes.
• Confirm your coverage for liability, property, and workers’ compensation.

Action Items:

• Bring in an attorney and accountant specializing in childcare.
• Keep a digital and physical folder of every important document.

Wrapping Up: Make Buying Another Preschool a Success

This process is a lot—but taking steady, thoughtful steps ensures your investment pays off for years to come. Be curious, ask lots of questions, and lean on professionals who know the ins and outs of childcare. With strong planning, clear goals, and a little patience, buying another preschool can grow your mission and your impact!

If you need supportive financial tools or expert advice through the process, Honest Buck is here to help every step of the way.