How to Value a Nursery?

This is an essential question for any owner of a nursery or a chain of nurseries who is considering selling on the open market.
The basic answer to the question "How do i value my nursery?" is that it is the sum of the fixed assets of the business plus the goodwill calculation.
On the first element of "fixed assets" this can be attained from your most recent set of full accounts. It comprises of all the physical items that your business owns and includes the freehold commercial value of any property that your nursery may own.
The second goodwill nursery valuation component is not as transparent or as easy to calculate as the fixed asset element to your overall nursery valuation. There are three methods that we commonly use to come to a valuation of the goodwill of your nursery. The first is based on multiples of the net profit the nursery generates, the second is a multiple of the EBITDA and the third is a multiple based on the gross turnover of your nursery.
There are also a number of other factors that need to be considered when making a goodwill valuation. These essentially assess the risk to the nursery to a purchaser and include the following issues:

  • Local reputation of the nursery
  • Fluctuations in the numbers of children attending the nursery
  • Loyalty and motivation of the staff
  • Threats from neighbouring nurseries
  • Outstanding legal claims against the nursery for any reason
  • Risk to the nursery from fluctuations in freehold/leasehold rent negotiations and break periods
  • Recent regulatory reports
  • Any other perceived risk to the nursery

You will not find a simple calculator on the internet to tell you what the value of your nursery is. The only way to come to a reasonable nursery valuation is by talking to experts within the field such as Morgan Cox. We can assess all the above factors and benchmark these against recent prices achieved for similar nurseries around the United Kingdom.
To arrange for a nursery valuation please feel free to contact one of our nursery valuation consultants on a confidential no obligation basis or fill out the form below in order to call you back at a better more confidential time.