Deciding to sell your school can be an emotional decision as well as one of the most important financial transactions a school owner will ever make. As part of their business plan, every school owner should have an "exit" strategy that can be put into effect when the time is right. Changed or unforeseen life circumstances, illness, death, marital dissolution, and wanting to retire are among the reasons that can accelerate the decision-making process.
When the time is right, it is important to work with a professional advisor/intermediary who specializes in the career school industry. This is crucial to the confidentiality, marketing and ultimate success of the transaction. A for-profit career school, with its unique characteristics, is also a business and should be handled as such.
When is the best time to sell?
The best time to sell is when the school is operating successfully. It’s not necessary to wait until business has peaked. Almost every school can be sold even if it is not doing too well. Timing and professionalism in handling the transaction correctly will yield results.
How much is my school worth?
When one removes the emotional factors from the equation, the value of a school is dependent on many considerations, including but not limited to:
Obtaining a professional third-party valuation report prepared by a profession valuator with knowledge of the school industry can mean a considerable difference in the ultimate pricing, marketing and transaction structure strategy.
What is the best organization to sell my school?
Selling a business is a specialized function. The knowledge of selling a private career school requires even more specialization. The process of pricing, marketing, qualifying potential buyers, negotiating and managing the transaction is different than other commercial business transactions. A school owner may be tempted to try to sell their school themselves or through local business brokers. In most cases the seller’s effort is futile. The frustration, expense and time involved if successful does not yield a cost savings. It is difficult for an owner to work directly with a buyer, maintain confidentiality and remain emotionally unattached. It is natural for a seller to be concerned with their needs. However it is also important to understand the needs and concerns of the buyer.
After the potential sale is agreed to, the buyer will have an opportunity to complete their "due diligence" or review of the financial and operational records, learning materials, regulatory correspondence, educational statistics, personnel records and more.
A qualified professional intermediary is needed to supervise this due diligence process and work with the seller’s attorney and accountant. The intermediary manages the movement of the transaction and the ultimate structuring, financing and closing of the transaction that will meet the test of time.