Selling Your Nursery? Don’t Go It Alone
Get the best price and find the purchaser who is the best fit for your business
During the course of a year, many thousands of people sell their businesses. The great majority use a specialist business agent, but while those who ‘go it alone’ and succeed in closing the sale might celebrate saving themselves an agents’ fee, there’s no guarantee they will have achieved the best price or found the purchaser who is the best fit for their business.
Going it alone means that an owner, and indeed their solicitor, will be lacking the comparative insight of knowing whether they have managed to negotiate the most preferential terms in the share purchase or asset purchase agreement. When it comes to selling a business, particularly in respect of ‘value’, you simply cannot judge the worth of a day nursery by comparing it with one up the road. No two nursery businesses are alike.
Expert advice
Others put the sale of their business in the hands of their accountant – again, this may not necessarily facilitate the best possible outcome. An accountant will have a comprehensive understanding of the financial performance of a business, but as the owners of most small to medium-sized businesses tend to use the services of a local accountancy practice, in the event of being appointed to seek a buyer, the accountant will have to rely on their ingenuity, rather than detailed knowledge of prevailing market conditions, the impact of market sentiment on value, an in-depth knowledge of the childcare market or the most suitable, and most likely, buyers.
An accountant won’t have access to a national database of potential buyers, whereas a specialist adviser will have a maintained list of potential buyers, and prior knowledge of those buyers – their funding position, appetite to acquire, transactional behaviour and desire to actually close a deal. It is always worth looking for an agent who has the ability to match make to ensure the right business is connected to the right buyer, as alongside the price, the success of a sale is equally driven by the relationship which develops during the deal between the vendor and the buyer.
A price worth paying?
A further advantage you should look for in a specialist adviser is their network of offices.
At Christie & Co, for example, we have 15 offices across the UK, a further 16 in Europe and a dedicated Asia desk, so we are able to offer both a local, national and indeed global service, thus meeting the needs of all owners be they the proprietor of a 30-place ‘pack away’ setting in Sheffield, or the owner of a multi-site portfolio in Singapore.
Other benefits of dealing with a specialist adviser include access to national and local market knowledge;
day nursery sector specialists, including agents and chartered valuation surveyors regulated and accredited by the Royal Institution of Chartered Surveyors (RICS). RICS is a professional body that accredits and regulates professionals within the land, property and construction sectors worldwide. Supporting 125,000 RICS global members, I am a technical author for the RICS Isurv portal, which provides guidance to less-experienced surveyors on the valuation of children’s day nurseries;
assistance with the settlement of any outstanding rent reviews, lease extensions and business rates appeals – all of which could favourably impact on the value of your business and the price a buyer would be willing to pay; and a personal service.
Expertise and services, of course, cost money and there lies the justification for specialist agents’ fees. Selling privately or via a deal set up through your accountant – assuming it works – may be cheaper. But is it worth the risk, the time involved and the danger of not achieving full market value? We are convinced that it’s not.
Courteney Donaldson MRICS is Head of Childcare at Christie + Co.
Christie + Co has provided valuable advice to clients within its specialist sectors for over 80 years. The business was established in London in 1935 and has successfully expanded to provide professional brokerage and advisory services throughout the UK and across Europe. As well as deal brokerage, structuring and financing, its professional services include: valuations, consultancy, insolvency services, investment guidance, feasibility studies and advice on rent reviews, building surveying, dispute resolution, rating and development.
