Is Your Montessori School Ready to Sell?

Engage a CPA experienced in private education or childcare to produce reviewed financials separating tuition revenue by program level (Toddler, Primary, Lower Elementary, Upper Elementary). Buyers and SBA lenders will require this. Unreviewed tax returns alone will slow or kill a deal.

If you are drawing above-market compensation, taking personal expenses through the business, or paying family members in non-arm's-length roles, work with your CPA to document and add back these amounts to present an accurate adjusted EBITDA. A credible EBITDA figure is the foundation of your valuation.

Create a schedule showing tuition collected by payment method, any state subsidy or childcare voucher program revenue, and your collection rate history. Buyers will scrutinize receivables aging reports and want to understand what percentage of revenue depends on government programs with reimbursement risk.

Review 36 months of bank statements and credit card records to identify and reclassify personal expenses run through the school. Common examples include vehicle expenses, personal insurance premiums, travel, and home office costs. Buyers and their accountants will find these; address them proactively.

Document every tuition rate increase over the past 3–5 years by program level, including the date and percentage of increase. This demonstrates pricing power, supports projected revenue growth, and shows buyers that annual tuition increases are an accepted norm in your parent community.

Build a multi-year enrollment table showing licensed capacity, enrolled headcount, and occupancy rate by classroom and age group for each of the past 3 academic years. Buyers underwrite heavily on occupancy trends — anything above 85% signals a healthy, in-demand school.

Maintain a clean waitlist record showing the number of prospective students by program level, average time on waitlist, and your historical conversion rate from waitlist to enrolled student. An active waitlist is one of the strongest demand signals you can present to a buyer.

Pull re-enrollment data for each of the past 3 years, broken down by program level. A school with 85%+ re-enrollment demonstrates family loyalty and program stickiness — two of the highest-value signals in a Montessori acquisition. Buyers will ask for this data; have it ready.

Create a written SOP for how prospective families move from inquiry to enrolled student, including your application form, observation visit process, acceptance criteria, and enrollment agreement. This shows buyers the admissions system is not dependent on you personally to manage.

Research tuition rates at comparable Montessori and private elementary schools within a 10-mile radius. If your rates are below market, this represents upside that buyers will value. If above market, document your differentiators — accreditation, facilities, staff credentials — that justify the premium.

Pull your accreditation certificate and review your next renewal date and any outstanding requirements. If accreditation has lapsed or is expiring within 12 months, begin the renewal process immediately. Buyers underwrite accredited schools at meaningfully higher multiples than non-accredited ones.

Request your current license documentation and pull the last 3 years of state inspection reports. Resolve any open findings, corrective action plans, or violations before going to market. Buyers and their attorneys will request this in diligence, and unresolved issues are a common deal-killer.

Confirm your current classroom configurations comply with your state's required staff-to-child ratios for each age group. Document how you monitor and maintain compliance. Regulatory tightening around ratios is increasing; buyers want evidence of proactive compliance management.

Audit every employee's file to confirm current CPR/First Aid certification, required state childcare training hours, and background check clearance. Missing documentation creates liability exposure that buyers will flag in diligence and use to negotiate price reductions.

Compile your written policies for illness exclusion, medication administration, emergency evacuation, incident reporting, and mandated reporter training. Many buyers, particularly platform operators, will benchmark these policies against their own standards. Having them documented shows operational maturity.

Pull your lease agreement and identify the assignment clause. Most commercial leases require landlord consent to assign to a buyer. Start the conversation with your landlord now — before you are under LOI — to understand their requirements and timeline. Lease assignment issues are one of the most common causes of deal delays and failures.

Create a lease summary showing total remaining term, any option periods with strike rent, and annual escalation clauses. Buyers want at least 5–7 years of remaining term (including options). A lease expiring in under 2 years with no renewal option is a significant value-killer.

Owner-occupied school buildings can be sold to the buyer, retained and leased back at market rate, or structured as a separate transaction. Each approach has different tax and valuation implications. Engage a commercial real estate advisor and your CPA to model the best structure before you engage a business broker.

Compile records of major facility repairs, HVAC servicing, roof condition, fire suppression inspection, and playground safety inspections. Buyers will conduct a physical inspection; having organized records demonstrates proactive facility management and reduces the risk of post-close repair demands.

Confirm your facility's current zoning classification permits childcare or private school use and that your certificate of occupancy reflects your current licensed capacity. Zoning discrepancies can create significant closing delays or require expensive remediation.

Build a formal org chart that includes your Head of School or Director, Lead Teachers by classroom, administrative staff, and any support roles. This chart should make it visually clear that the school has a functioning leadership and instructional team that does not rely on you to operate day to day.

If you are the primary relationship manager for parents — leading tours, handling complaints, running parent education nights — begin transitioning these responsibilities to your administrative director or lead teachers at least 12 months before going to market. Buyers will test this in reference calls with parents.

Create a staff matrix showing each teacher's AMS or AMI credential level, years at your school, total years of Montessori experience, and any continuing education investment you have funded. Tenured, credentialed teachers are a primary value driver buyers underwrite in Montessori acquisitions.

Benchmark your teacher and administrator salaries against comparable private schools and childcare providers in your market. If you are significantly below market, consider strategic compensation adjustments before sale to reduce post-close turnover risk — a common concern for buyers inheriting a new team.

Before going to market, have private conversations with your most critical team members — your administrative director and lead teachers — to understand their career intentions. While you cannot disclose a pending sale, gauging stability helps you address retention risks proactively and informs your transition planning.

Assemble your written curriculum guides, Montessori scope and sequence materials by age group, lesson record-keeping systems, and any proprietary curriculum enhancements you have developed. Buyers want to see that the instructional program exists as a documented system, not just in the heads of your teachers.

Document your processes for enrollment intake, tuition billing and collection, parent communication, staff onboarding, scheduling, and state licensing renewal. These SOPs are evidence that your school runs as a system, not a personality — the fundamental question every buyer is trying to answer.

Build a structured virtual data room (using Dropbox, Google Drive, or a platform like Firmex) containing financial statements, tax returns, enrollment data, lease documents, accreditation certificates, licensing records, staff files, insurance policies, and all corporate formation documents. A well-organized data room accelerates diligence and signals seller sophistication.

Gather your current parent handbook, signed enrollment agreements (or template), tuition payment policies, refund policies, and any family communication records. These documents define the contractual relationship with your enrolled families and will be reviewed carefully by buyer's counsel.

Summarize how new families find your school — referral networks, website, open house events, local preschool partnerships, or social media. Quantify lead volume and conversion rates if possible. This shows buyers that enrollment generation is a repeatable system, not dependent on the founder's personal network.

Create a formal document outlining how you will introduce a new owner to parents, staff, and the community; what operational knowledge you will transfer and on what timeline; and what your post-close availability commitment looks like. Buyers, particularly educators new to ownership, will weight this heavily in their acquisition decision.

Retain an advisor with demonstrable experience selling Montessori schools or private childcare businesses in the $1M–$5M revenue range. They will prepare your Confidential Information Memorandum (CIM), run a structured process, qualify buyers, and negotiate deal terms that protect both your financial and mission interests.

Before going to market, align with your CPA and attorney on your preferred structure — asset sale vs. stock sale, acceptable seller note terms, earnout triggers you would accept, and minimum upfront cash requirement. Entering negotiations with clear parameters prevents emotional decision-making under offer pressure.

Work with your advisor to script the announcement of new ownership for both staff and parents, timed to occur after the deal is signed and closing conditions are largely satisfied. A carefully managed communication preserves enrollment continuity and staff stability through the transition period.

Commission a pre-sale quality of earnings (QoE) analysis from your accountant before going to market. This mirrors what a buyer's financial advisor will produce in diligence and allows you to identify and address any financial presentation issues on your timeline rather than theirs — preventing last-minute price renegotiations.