Buying a child care center in Florida

A child care center looks after infants through preschoolers during the workday, and many add before- and after-school care and summer camp for older kids. Parents pay weekly or monthly tuition, often on autopay. Many also get public money from two programs, paid through the local early learning coalition. Voluntary Prekindergarten (VPK) is Florida's free pre-K for four-year-olds. School Readiness helps lower-income working families pay for care.

Once rooms are full, income is fairly predictable, with a reset each August when the oldest children leave for kindergarten. The business comes down to two things: filling the spots you're licensed for, and labor. Florida law sets staff-to-child ratios by age, starting at one adult for every four infants, so infant and toddler rooms cost far more to staff than preschool rooms. Payroll is the largest expense by far. A typical center has a director, an assistant director, a lead teacher and assistants for each room, a cook, and sometimes a van driver.

• Rooms full or nearly full, with a waitlist, especially preschool rooms, where each teacher can look after more children.
• A credentialed director who isn't the owner and plans to stay.
• Several years of clean inspections.
• A healthy mix of private tuition and VPK, so the center doesn't depend on state rates.
• Teachers who have been there for years, and pay that keeps them.
• Accreditation and the state's Gold Seal Quality Care designation, which brings higher School Readiness payment rates.
• A building, playground and kitchen in good shape, with a long lease or owned property.
• Tuition collected on time by autopay, with little owed by families who have left.

A child care center needs a license, renewed every year (section 402.308, Florida Statutes). The Department of Children and Families (DCF) licenses centers everywhere except Broward, Palm Beach, Pinellas and Sarasota counties, which use their own local agencies. The license doesn't pass to a buyer: the center must apply again and be licensed before the new owner takes over, and the law gives DCF 45 days to decide (ask county agencies about theirs). Plan your closing around it.

Owners get the same level 2 fingerprint screening as staff, and an operator must be at least 21. Staff need a 40-hour introductory course and 10 hours of yearly training. Directors need a state credential, and for every 20 children, one staff member must hold a child development associate credential or equivalent (sections 402.302 and 402.305).

VPK and School Readiness contracts don't transfer. For each, the seller must give the early learning coalition at least 30 days' notice, and the coalition has up to 30 days to accept or decline your new contract (rules 6M-8.301 and 6M-4.610). The Gold Seal is issued in the provider's legal name and depends on accreditation, so ask the accreditor and the Division of Early Learning how to keep it.

• Inspection reports. Read several years of them, and ask how each finding was fixed. Serious violations can also cost a center its Gold Seal.
• Enrollment. Compare each room's enrollment with its licensed capacity and actual attendance, and check unpaid tuition.
• Public funding. The state and the coalition set VPK and School Readiness rates, not you. Know how much revenue depends on them.
• Credentials. Find out who holds the director and staff credentials. If those people leave at the sale, you may be out of compliance on day one.
• Insurance and incidents. Review liability coverage (including abuse coverage, and vehicle coverage if the center transports children) and any claims or complaints.
• The building. The license is tied to the location. Check fire inspections, zoning, the playground and the lease term.
• Storms. Ask whether families kept paying through past hurricane closures, and what happened to VPK and School Readiness payments.

• How full is each room today, and how long is the waitlist?
• Who holds the director credential, and are your credentialed teachers planning to stay?
• What has come up in inspections over the last few years, and how did you fix it?
• How much of your revenue comes from VPK and School Readiness, and how much from private tuition?
• When did you last raise tuition, and how do your rates compare with centers nearby?
• How often do teachers leave, and how do you find new ones?
• Have there been any incidents, parent complaints or insurance claims involving children?