The Short Answer
Most daycare and childcare centers sell for roughly 2.5x to 4x Seller's Discretionary Earnings (SDE) for the operating business, frequently plus real estate when the owner owns the building. A center earning $250,000 in SDE typically sells for $625,000–$1,000,000 for the business, with the property valued separately. Buyer demand in childcare is strong, and high-occupancy centers with a waitlist and a capable director command the top of the range.
Value is driven above all by enrollment relative to licensed capacity and by whether the center runs on a professional director rather than the owner personally.
Get a confidential, no-obligation valuation of your daycare based on your real numbers — not a generic online estimate.
How Daycares Are Valued
The operating business is valued on a multiple of SDE. Buyers focus on licensed capacity, current utilization (enrollment), tuition rates, and waitlist depth — a center running near capacity with families waiting has predictable, growing revenue, while an under-enrolled center carries risk and upside a buyer will want to price for themselves.
Real estate is handled separately: it can be sold with the business at appraised value or leased back to the buyer, which turns the property into ongoing income for the seller and can help the buyer's SBA financing. How the real estate is structured has a large effect on total proceeds.
Daycare Valuation Multiples by Profile
| Center profile | Typical multiple | Why |
|---|---|---|
| Owner is the director, moderate enrollment | 2x–2.75x SDE | Owner-dependent; transition risk |
| Established, licensed, stable enrollment | 2.75x–3.5x SDE | Trained staff, steady utilization |
| High occupancy with waitlist and director | 3.5x–4x SDE | Predictable revenue, transferable |
| Real estate (if owned) | Valued separately | Sold or leased back at market value |
What Drives a Daycare's Value Up or Down
What pushes the multiple up
- High enrollment relative to licensed capacity, with a waitlist
- A qualified director and low staff turnover — so the business isn't the owner
- Clean licensing history with no serious citations
- A recognized curriculum or brand and strong parent reviews
- Owned real estate in a residential, high-demand area
What drags the multiple down
- The owner is the director and primary caregiver
- Low occupancy or declining enrollment
- Staffing shortages or difficulty meeting ratio requirements
- Licensing citations or compliance problems
- A short lease or a location that limits capacity
Daycare Values in Southern California
In California, childcare centers are licensed by the Department of Social Services Community Care Licensing Division under Title 22, and buyers examine the license, capacity, staff qualifications, ratios, and citation history closely in due diligence. Southern California's dense population and high demand for quality childcare support strong valuations, and because suitable, properly zoned real estate is scarce and expensive, an owned building or a long, assignable lease adds meaningful value. Resolving any open licensing items and documenting enrollment trends before listing protects both price and timeline.
Example: Enrollment Drives the Number
A childcare center licensed for 90 children earns $250,000 in SDE. Running at 65% occupancy with the owner as director, it sells for about 2.5x — $625,000 for the business, because the buyer is taking on both transition risk and the work of filling seats. The same center at 95% occupancy with a waitlist and a salaried director who stays sells for 3.75x — roughly $940,000 — plus the real estate if owned. Utilization and transferability are the whole story.
Frequently Asked Questions
How much is a daycare worth?
Most daycare and childcare centers sell for 2.5x to 4x Seller's Discretionary Earnings (SDE) for the operating business, often plus real estate if the owner owns the building. A center earning $250,000 in SDE typically sells for $625,000 to $1,000,000, with high-occupancy centers commanding the higher multiples.
What makes a childcare center more valuable?
High enrollment relative to licensed capacity, a waitlist, a qualified director and low staff turnover, a clean licensing history, a recognized curriculum or brand, and owned real estate in a high-demand area. Enrollment and a director who runs the center are the biggest drivers.
Is the real estate included when selling a daycare?
Usually it is valued separately. The owner can sell the property with the business at appraised value or lease it back to the buyer for ongoing income. How the real estate is structured significantly affects the seller's total proceeds and the buyer's financing.
How does licensing affect a daycare sale in California?
California childcare centers are licensed under Title 22 by the Department of Social Services, and buyers scrutinize the license, capacity, staff qualifications, ratios, and citation history in due diligence. A clean licensing record supports a premium valuation, while open citations can lower the price or stall the deal.
What Is Your Childcare Business Worth?
Get a confidential valuation of your daycare, and your real estate, from a broker who understands enrollment, Title 22 licensing, and the Southern California market. No obligation.
Request a Confidential Valuation Call or text: 818-633-3254 · 365navarro.martin@gmail.com