What Is My Daycare or Child Care Center Worth?

Child care centers have become a serious acquisition target. Demand for quality care far exceeds supply in most markets, regulatory barriers protect incumbents, and the revenue model is highly recurring. PE firms and regional operators are actively consolidating the industry.

Here's how to understand what your daycare or child care center is worth.

Typical Valuation Ranges

Most single-location child care centers sell for 2x to 4x SDE. Multi-location operators with management teams and $1M+ EBITDA can attract PE buyers paying 5x to 7x EBITDA.

Factors that push toward the higher end:

• Licensed capacity fully enrolled or waitlisted
• Multi-location operation with centralized management
• Accreditation (NAEYC or equivalent)
• Revenue above $1M with stable enrollment
• Strong staff retention (low turnover)
• Long-term lease or owned facility
• Subsidy and private-pay mix

Factors that push toward the lower end:

• Below 80% enrollment utilization
• Owner is the primary caregiver/director
• High staff turnover
• Regulatory compliance issues or violations
• Aging facility needing capital improvements
• Short remaining lease

Why Child Care Is Attractive to Buyers

Supply-demand imbalance. There aren't enough licensed child care slots in most markets. Waitlists are common. This dynamic protects revenue.

Regulatory moat. Licensing requirements, staff-to-child ratios, and facility standards create real barriers to entry. You can't just open a daycare overnight.

Recurring revenue. Families enroll for years — infants through pre-K. Monthly tuition payments are predictable and sticky.

Essential service. Working parents need child care. Demand is resilient across economic cycles.

Fragmented market. Most child care is provided by independent operators. Consolidation is still in early innings.

Key Metrics Buyers Evaluate

Enrollment Utilization

Buyers want to see 85%+ enrollment relative to licensed capacity. A center licensed for 120 children running at 100+ enrollment is strong. Persistent under-enrollment raises questions.

Revenue Per Child

This metric varies by market and age group, but buyers compare your tuition rates to local market rates. Pricing power — the ability to raise rates without losing families — is a sign of quality and demand.

Staff-to-Child Ratios

Operating at required ratios is table stakes. Operating efficiently without excess staffing drives margins. Buyers evaluate your labor cost as a percentage of revenue — 50–60% is typical for the industry.

Staff Retention

Qualified early childhood educators are hard to find. Centers that retain their teachers have a significant operational advantage. High turnover disrupts classrooms and concerns parents.

Parent Satisfaction

Reviews, referral rates, and waitlist length are proxies for parent satisfaction. Strong word-of-mouth and a waitlist signal a center that families trust.

How to Increase Your Daycare's Value

1. Fill your enrollment. Marketing, community partnerships, and employer programs can close any capacity gap.
2. Retain your staff. Competitive wages, benefits, and professional development keep teachers. This is your biggest operational challenge and biggest value driver.
3. Pursue accreditation. NAEYC or state-level quality ratings differentiate your center and support premium pricing.
4. Document your curriculum and processes. A transferable program — not one that lives in the director's head — is what buyers need.
5. Secure your lease. 10+ years remaining with controlled rent escalations. Location matters enormously for child care.
6. Clean up your books. Separate personal expenses, track enrollment and revenue by classroom, maintain accurate financial records.

Ready to Find Out What Your Child Care Center Is Worth?

Browse the valuation multiples guide for current industry data, or schedule a free call for a confidential assessment.