Discovery Point Blog

July 12, 2023

Before Buying a Daycare Business Ask These 4 Questions

If your passion is working with children and you believe you have a knack for entrepreneurship, buying a daycare business may feel like a natural move for you. Of course, when it comes to making a business investment, you can’t go on your gut feeling alone. It’s necessary to put in hours of research and do in-depth due diligence to determine whether a particular investment makes sense for your personal and financial future. Asking the right questions can help you get a head start on this process and get on your way toward running a profitable daycare business.

Daycare Business Questions You Need Answers To

There are many factors to consider when making an investment, especially when that investment is a daycare business. From your own expectations and preferences to potential licensing requirements and the cost of supplies, these factors could ultimately determine whether your business is successful. 

To ensure you have all the information to make an educated decision about a potential investment, it’s crucial to pose a long list of questions to both yourself and the franchisor. Below, we’ve put together a quick overview of some of the most important questions to help you get started on your research venture.

1. What type of daycare business are you interested in purchasing?

Daycare business is a blanket term that can cover a number of different types of businesses. If you’re set on working with a franchisor, this list can be narrowed down to two business types: resale franchises and new franchise locations

Each option comes with benefits and drawbacks, depending on your personal perspective and priorities. For example, a resale franchise will have historical data concerning its previous performance, which can be a huge help for making projections about how the business will do under your ownership. However, some entrepreneurs may prefer to open a business whose history they can build themselves. This choice ultimately depends on what gives you the greatest sense of security and motivation. 

2. Where is the child care center located?

We all know that one of the golden rules of business operations is “location, location, location,” and this rule remains important for daycare businesses. You want to ensure your center is conveniently located for families in the local community, whether that’s because it’s near their home or their workplace. 

If you are buying an existing business, you’ll have a good idea of whether its location has had a positive impact on enrollment. If you choose to open a new location, you’ll need to make sure plenty of demographic research is done to form accurate projections and choose the best real estate for your future center. Note that if you work with Discovery Point, you’ll have our experienced team taking care of this research for you.

3. What types of licenses or certifications are required?

If you are considering buying a child care business, one of the first things you’ll need to do is understand the various licensing regulations that will dictate how your business operates. As these requirements can vary substantially from state to state, we won’t go into too much detail here. However, elements that are typically regulated include:

At Discovery Point, we leverage our experience with licensing in numerous states to make this process as straightforward as possible and help our franchisees acquire the appropriate license for their daycare businesses. 

4. What are the financial requirements of the business investment?

Understanding the costs of the investment can help you quickly rule out potential purchases and narrow in on those that fit your budget. Costs you’ll need to consider include the initial franchise fee, ongoing royalty payments, and marketing fees. You’ll also likely need to meet a cash requirement as well as a net worth requirement. In some instances, you may additionally be responsible for purchasing equipment and supplies, which can add up quickly. 

At Discovery Point, we include all the necessary materials, including furniture, playground equipment, and supplies in our start-up packages, meaning you won’t have to worry about this category becoming an additional expense.

Due diligence is all about asking the right questions and ensuring you apply the information you’ve gathered to your decision-making process. If you are ready to start asking questions about purchasing a daycare business from Discovery Point, simply call 770-623-1140 today to speak with our team about our exciting franchise opportunities!