How Do You Value A School For Sale?

Selling your private school, be a K-12 independent school, career college, or university, is one of the most crucial financial decisions in an owner’s life. You have put in the time to build your school business, developing a solid reputation in your market. Whether your reason is to move on to other opportunities or retire or move, selling your private school is one of the most significant decisions you will make. Now that you are ready to sell, you want to maximize your value, accomplish your exit targets, and ensure a seamless transition

Earning Everything Your School is Worth

This is an essential question for every school owner that is considering the sale of their institution. What is your school worth? Determining a school’s value is a complex process — part science, part art. Complicating matters is the fact that many owners may have an overly optimistic view of how much their business is worth. Multiple factors come into play to assess the school’s sellability and market value. Many of today’s buyers are international investors, equity firms, family offices, or school operators looking for opportunities to invest in or expand their portfolio. They may be strategic or financial buyers with different needs and drivers for business value. Our breadth of experience in the private school market will ensure maximum value is achieved.

Capturing Your School's True Value

You will not find a simple calculator or formula to determine the economic worth of your business. The basic answer to the question, “How do I value my school?” is based on various factors within your business’ finances and fixed assets.

There are multiple rule-of-thumb approaches to value a school, but they may not be consistent or the most accurate in your circumstances. If the school sells at a value estimated by a rule-of-thumb method that is too low, you will be giving up money. If the school is marketed at too high a price, the school will not sell unless it sells for just the value of the fixed assets. School businesses in financial trouble will frequently sell for just the value of their fixed assets or debt and no goodwill.

Bear in mind that the proposed asking price is just a guideline for how to approach negotiations in the sale. Owners need to go beyond just financial formulas and not just base the assessment of the business’s value on number crunching. The final transaction price is often different and influenced by many factors — the owner’s eagerness to sell, the buyer’s strategic interests or expected synergies, available financing, due diligence, program type, reputation, competition, location, liabilities, accreditation, supply, and demand, financial/enrolment performance, and difficulty of entry into the market due to high start-up costs and regulatory conditions.

This is where Halladay Education Group comes in. Our veteran team combines decades of experience across a wide range of private school sectors delivering customized services critical to the successful sale. The reason for our success is simple – we understand our clients’ expectations and exceed them. We work with a range of online and on-ground for-profit and non-profit schools in Canada, the USA, and internationally. These range from K-12 private schools (e.g., prep, special needs, Montessori), boarding high schools, ESL schools, private career colleges, and universities.

Next Step To Selling Your Private School

If you would like to find out more about HEG’s M&A services regarding buying or selling a private school or to find out more about your school’s value, please contact us directly at info@halladayeducationgroup.com or our toll-free, confidential number at 1.800.687.1492. Contact us today for our free valuation and 30-minute one-on-one consultation. You can also click on the following link for additional information on schools we work with www.buyingandsellingschools.com/schools-for-sale.