A question that I’m often asked by a wide range of buyers is; how can I expand my business? With the ever-increasing demand for high-quality childcare assets, finding the perfect business within your buying criteria can be tough. Even then, once a suitable business has been identified, you need to be able to secure the business, which could mean competing against any other potential buyers.
At Redwoods Dowling Kerr, we work alongside all types of buyers, from first-time entrants to local operators, regional operators, overseas investors and corporate operators. With each of these buyers comes an understanding that they have their own unique buying criteria.
The first step when looking to expand is to determine what your buying criteria are. Predominately, we see most buying criteria split into four main sections:
- Location
- Capacity
- Tenure
- EBITDA/Profitability
Once you have determined your criteria, it is then essential that you contact your business agent so that you can discuss them with you. This will ensure that you are aware of all the suitable opportunities that are currently on the market, or those that are due to come to market soon that fit your criteria.
In order to put yourself in the best possible buying position, we suggest you also have available proof of funds. This is used to prove to the vendor (business owner) that you are a credible buyer, which will aid you when requesting to view a business opportunity.
When reviewing any opportunity, it is important to conduct your own due-diligence:
- Location – This will always be of utmost It is imperative that you research and gain insight, in particular; the demographics of the surrounding area, an in-depth understanding of the competitors within the local area, fee rates, transport links etc. All of these factors can play a huge role in determining whether or not the business is a suitable acquisition for you.
- Financials – You will want to have a true understanding of the previous, current and future trade of the business. We would highly advise you to review the previous, current and future accounting information, along with details of the occupancy.
- Tenure – You will need to find out if the opportunity is based on a freehold or leasehold property. If leasehold, you will want to review the current lease to confirm that the current terms are acceptable to
- Staffing – As we know, a strong, robust and experienced workforce is essential in the nursery sector. Depending on your particular experience within the industry, the availability of staff and their organisation and structure will be of great importance.
A small selection of the key groups that RDK has worked alongside:
- Alpha Nurseries – recently announced as of the UK’s largest nursery chains due to their impressive expansion plans: “The Alpha Group has again worked successfully with Redwoods Dowling Kerr to complete the purchase; the team were on hand to deal with any issues allowing a successful completion. Their service was as we have come to expect – professional. We look forward to working with them again.”
- All About Children – recently announced to be the 16th largest nursery chain in the UK: “Jenna and the team come highly recommended. Buying or selling a business is a big event and can be tricky. Maintaining trust and confidence between buyer and seller is important. The team does a great job in all respects, but particularly in getting deals over the line.”
- SAI Childcare – Group Operator, London and Birmingham: “As a group, I have been involved in purchasing five nurseries via Redwoods Dowling Kerr. As always, they have made the purchase easy and impartial. Karrina has been fantastic with all our purchases from start to finish.”
- Brightstart Day Nursery Group – Group of six nurseries: “Working with Redwoods Dowling Kerr was straightforward; regular updates were provided. The team were helpful and showed a genuine desire to smooth the sales process.”
If you are actively looking to expand please contact us.
By Jenna Caldwell
