Buy a Daycare Center: Verify Paid Care, Staff Coverage and Buyer Permissions

Test attendance-to-collections evidence

Define offered ages, care programs, hours, locations, entity and the proposed transaction. Reconcile enrollment agreements, delivered service periods, invoices, discounts/scholarships, refunds, receivables and parent/subsidy receipts with consistent accounts and cash. Explain partial periods, closures, absence policies and unresolved balances appropriately; neither advertised tuition nor every enrolled place equals collected revenue.

Distinguish available/permitted capacity, enrolled children and funded ongoing staffing. Review seasonality and program mix on consistent periods instead of selecting peak attendance. Use the earnings guide to support adjustments and define owner-operator versus managed earnings. Forecast future enrollment and collection using explicit assumptions, not a universal concentration cap or earnings multiple.

Verify staff capacity and recurring costs

Reconcile director/classroom/care, administration, scheduling, enrollment, payroll and family-support work with staff schedules, benefits, substitutes, overtime and recruiting/training. Include supplies, food, insurance, software, maintenance, premises and utility costs. Match costs to delivered programs and time periods, explaining costs omitted from seller earnings.

Use the coverage worksheet to verify appropriately qualified, available people after temporary seller training. Have the responsible authorities and advisors assess staff checks/qualifications, grouping, ages, space, hours and required coverage for this program. A roster or planned manager is separate from funded capacity. Test staffing unavailability and lower collections without assuming reduced supervision is permitted.

Resolve actual licensing, site and subsidy questions

Illinois moved childcare licensing to IDEC on July 1, 2026; its overview links licensing and monitoring resources.

Review the proposed entity, buyer, services and sites with counsel and the responsible state/local agencies. Establish licensing or exemption status, applications, inspections, staff and permitted-use conditions for the specific program. Review actual subsidy/provider terms with the responsible program rather than assuming payment rights transfer with enrollment.

Use the consent register for approvals, dependencies and status. Review lease use, rent, assignment/renewal, premises/fire/building questions, vendor/software rights and any franchise conditions. Examine monitoring/inspection findings, correction evidence, complaints, claims and unresolved actions with qualified professionals. An existing operator’s permission does not clear every buyer or service.

Fund continuing care and protect family information

SBA acquisition guidance encourages review of investment and operating costs.

Model payroll, substitutes, vendor terms, receipt timing, rent, repairs, required improvements and reserves alongside price and financing. Review actual lender conditions through the financing guide. Assign who collects, performs and funds receivables, deposits, advance tuition, refunds and remaining care through the delivery guide. Treat parent renewal and future attendance as separate assumptions.

FTC security guidance addresses necessary access and protected information handling.

Use approved aggregate evidence and redacted agreements. Have privacy/legal advisors assess family/personnel records, permitted access, notices, custody/retention and migration; an NDA alone does not permit uploading identifiable child files. Agree a truthful parent-communication plan based on verified staff, hours, payment arrangements and operating conditions.