By Brian Duprey
Finding the Perfect Location for Your Next Child Care Center
Expanding your child care business is exciting—but it’s also a high-stakes decision. Your next location could become a thriving, profitable part of your legacy… or a costly mistake. Choosing well requires more than browsing “daycares for sale” and hoping for the best.
The most successful owners approach location-hunting like seasoned entrepreneurs. They remove limiting beliefs, think strategically, and take proactive steps to uncover opportunities before competitors even know they exist.
Here’s a step-by-step guide to help you find—and secure—your perfect next location.
Step 1: Eliminate Your Paradigms
Most owners approach expansion through the lens of what they already know. If your current school has 200 children, you may assume your next one must be the same size. If you don’t take subsidy now, you may automatically rule it out for the future.
These “paradigms” limit your options and blind you to profitable opportunities.
Instead, start with a blank slate. In the early stages, every option is on the table. Evaluate each possibility on its own merits before ruling it out.
Step 2: Adopt the Warrior Mindset
In business, there are two types of owners:
- Those who wait for opportunities to appear
- Those who actively create them
A warrior doesn’t wait for a ship to come in—they swim out to meet it. In child care terms, this means you don’t just scan listings for centers that are for sale. You identify your target locations, build relationships with owners, and position yourself as the buyer they call when they’re ready to sell—before a broker gets involved.
Step 3: Define Your Expansion Sweet Spot
For most owners, the ideal range for expansion is within a 45-minute drive of your existing school. Draw a circle on a map with your current center at the center point. This is your expansion sweet spot—close enough for oversight and staff sharing, but far enough to tap into a new market.
Once you open a new school, draw a fresh circle around each location and repeat the process. Over time, these overlapping circles can create a “network” effect, where your brand dominates the area and resources are shared efficiently.
Step 4: Choose Your Expansion Path
There are three main ways to grow:
- Buy an Existing School
Pros:
- Generates profit quickly (kids and staff are already in place)
- Existing reputation and systems
- Usually faster to license
Cons:
- Staff pay rates may be higher than you’d like
- Possible toxic culture or weak leadership
- May require a turnaround plan if enrollment or reputation is poor
Example: One owner acquired a struggling center with zero purchase price and turned it profitable within 30 days through targeted marketing and operational changes.
- Lease or Buy a Building and Start from Scratch
Pros:
- Often less expensive than buying an existing school
- Can train staff your way from day one
- Flexibility to design the space for your program
- Can purchase used equipment to save costs
Cons:
- No enrollment at launch—you must build from zero
- Requires more marketing to establish reputation
- All new staff starting together can create chaos without careful onboarding
- Ground-Up Build
Pros:
- Custom-designed, energy-efficient space
- Brand-new everything
- In a true “child care desert,” can fill quickly
Cons:
- Very high cost and long timeline
- High break-even enrollment requirement
- Vulnerable to supply chain delays
Tip: Use childcaredeserts.org to verify whether your chosen area has unmet demand. Opening in a saturated market often means pulling children away from competitors, which can depress tuition rates and increase hiring challenges.
Step 5: Decide Whether to Buy or Lease
Leasing can be the smarter move when interest rates are high or cash is tight. You can always purchase the property later. Many successful owners lease in the early years, build cash reserves, and then buy when the market conditions are favorable.
Creative options include:
- Lease purchase
- Rent-to-own
- Owner financing
Step 6: Build Your Target List
Once you’ve drawn your 45-minute circle, list every center that fits your parameters:
- Licensed for 50+ children
- Not a franchise or non-profit
- At least 2 miles from your existing location
Aim for 100–200 centers in your initial research. Narrow this list to your top 25 by evaluating:
- Google reviews and reputation
- Tuition rates
- Physical condition and curb appeal
- Traffic flow and parking
- Safety of surrounding area
Step 7: Swim Out to the Ship
With your refined list, reach out before those centers hit the market. One proven approach is a professional acquisition letter mailed directly to the owner (marked “Confidential – Eyes Only”), along with a magnetic business card they can keep handy.
Follow up every 60 days with those who don’t respond. Persistence pays off—many owners who say “not now” will call you months later.
Step 8: Handle the First Meeting Strategically
When an owner calls, don’t rush to make an offer. Your goal in the first meeting is to:
- Build rapport and trust
- Gather key information
- Establish yourself as the one in control of the process
Questions to ask:
- Do you own the building? Is there a mortgage?
- Any outstanding business loans?
- Tell me about your leadership team.
- What’s your tuition structure?
- How soon are you looking to sell?
Request two years of corporate tax returns, the current year’s profit and loss statement, and a balance sheet. Have your CPA review the numbers before making an offer.
Step 9: Make a Smart Offer
A common starting point is 1.5–2 times net profit plus the value of furniture, fixtures, and equipment (FFE)—adjusted for market conditions. The goal is to pay below market value so your cash flow remains strong, even in a downturn.
Step 10: Keep All Options Open
While pursuing acquisition targets, also look for:
- Empty commercial buildings of 5,000+ sq. ft.
- Land suitable for a build
- Unused properties in your target circle
Not every option works every time, but exploring multiple avenues increases your odds of finding the right fit.
Final Thought
Expansion isn’t about luck—it’s about strategy. The owners who dominate their markets aren’t waiting for the perfect listing to appear. They’re out there building relationships, studying their markets, and taking the first step before anyone else knows it’s there.
Be the warrior who swims out to the ship. Your next location—and the growth of your legacy—depends on it.
Thinking about expansion, but have questions or need advice? Let’s chat! Book a free call with one of our Child Care Genius coaches here: https://childcaregenius.com/free-coaching-call/