Do you own a Preschool or Childcare business in California?

The best time to sell is when your enrollment is strong, your staff is stable, and the business runs without you managing every classroom and parent relationship personally. Preschool and childcare businesses attract consistent buyer interest — particularly experienced operators looking to add locations and first-time buyers drawn to the recession-resistant nature of childcare demand. Owners who prepare in advance consistently get better outcomes.

Most transactions take 6 to 9 months from engagement to close. Our Lisa's Lil Tikes transaction went under contract in under 60 days and sold above asking price — a result of strong preparation and a competitive process. The businesses that close fastest are well-documented, fully enrolled, and operationally clean before they go to market.

Your enrollment roster, subsidy contracts, and family relationships are among the most sensitive assets in your business — and we treat them that way. That information is never shared during the marketing process. It is only released to a single buyer, after an offer has been accepted and the deal has entered due diligence. To learn more about how we control the flow of confidential information, see our Information Release Timeline.

The childcare license is issued to the individual or entity, not the business itself, which means the buyer will need to obtain their own license from the California Department of Social Services. This process takes time and needs to be planned for well in advance of close. CBA works through the licensing transition timeline with buyers and sellers early in the process so there are no surprises at the closing table.

Enrollment is the single biggest driver of value in a preschool or childcare deal. A facility operating at or near licensed capacity with a waitlist will command a meaningfully higher multiple than one with open spots. Buyers model their return on the revenue the business is actually generating — not on theoretical capacity. If your enrollment has room to grow, that's worth addressing before you go to market.

Owning the real estate gives you options. You can sell the real estate together with the business as a combined package — which appeals to buyers who want to own the whole asset — or you can retain the property and lease it back to the new owner, creating an ongoing income stream post-close. Both structures work and each has different tax and financial implications worth discussing with your advisor early in the process.

The most active buyers in this space are experienced childcare operators looking to add locations — buyers who already understand the regulatory environment, the staffing model, and how to run an enrolled facility. First-time buyers with an early childhood education background are also common, particularly for single-site operations. Multi-site businesses with a replicable model attract more sophisticated operators and occasionally PE-backed platforms looking to build regional scale. CBA maintains active relationships across all of these buyer categories.

It's worth considering but comes with real tradeoffs. Internal buyers rarely have the capital to close without seller financing or SBA debt — which means you're carrying more risk and often accepting a lower price than the open market would deliver. The right move is to run a proper competitive process first and see what the market actually offers before committing to an inside deal. Learn how our confidential auction process works.

California's expansion of Transitional Kindergarten through the public school system has pulled some 4-year-olds out of private preschools — and that's a real conversation buyers will have with you. The impact varies significantly depending on your enrollment mix, the age ranges you serve, and how your local public school district has implemented TK. Businesses that serve infants, toddlers, and younger preschool-age children are less exposed. Those heavily dependent on 4-year-old enrollment in districts with strong TK adoption have felt more pressure. The honest answer is that TK is a market reality, not a deal killer — buyers factor it in when they underwrite. The businesses that have adapted by focusing on younger age groups, extended care hours, or curriculum differentiation that public TK can't replicate are well-positioned. If TK has affected your enrollment, it's worth getting ahead of that conversation with your advisor before you go to market.