Daycare Valuation and What a Daycare Business Is Worth From 425 Closed Sales
Enter the center's revenue and owner earnings and read a range benchmarked to what day care and child care centers actually closed at, whether you are setting an asking price or checking a daycare for sale before you make an offer.
Estimated business value
Method breakdown
What moves this number
Estimate, not a certified appraisal. Your figures are not stored.
US day care and child care centers sold across 2021 to 2025 at a median of 2.72x seller discretionary earnings, or 0.66x annual revenue, with a lower quartile of 1.94x and an upper quartile of 4.03x. The median center sold for $395,000 against a median asking price of $412,500, on median revenue of $584,126 and median owner earnings of $132,779, across 425 reported sales and a median 214 days on the market.
The median price is hard to finance for a buyer who needs a salary. On a 10 year SBA loan, the median earnings support about $289,740 at an $80,000 owner draw, 26.6 percent short of the median sale. To pay $395,000 the buyer can take at most $60,826 a year. So with a day care, what you can pay depends on whether you will run the center yourself. This is a benchmark and an estimator, not a certified appraisal.
Day care centers, median asking price against sale price
2021
2022
2023
2024
2025
$320k
0.89
$570k
0.90
$330k
0.98
$400k
0.94
$390k
1.01
BizBuySell, day care centers sold 2021 to 2025. Light bar median asking price, dark bar median sale price, average sale to ask below each year.
Closed transactions
01What day care centers actually sold for
These are 425 day care and child care centers reported sold across the five years 2021 to 2025. The source describes them as businesses caring for and educating children, typically aged 6 months to 5 years, from owner-operated programs with fewer than 10 children to early education centers with 50 or more students. Most are independent local brands; the occasional franchise unit is included. If you have been pricing from a listing site's instant estimate, our comparison of BizBuySell valuation alternatives explains what those tools leave out.
Median sale price
$395,000
What the middle day care center actually closed at, 2021 to 2025
Median asking price
$412,500
What the same sold centers were listed at
Median revenue
$584,126
Annual tuition and fees of the middle center sold
Median owner earnings (SDE)
$132,779
Seller discretionary earnings, a 22.7 percent owner margin
| Day care centers, 2021 to 2025 | Lower quartile | Median | Average | Upper quartile |
|---|---|---|---|---|
| Earnings multiple, sold | 1.94x | 2.72x | 3.27x | 4.03x |
| Earnings multiple, current listings | 2.37x | 3.42x | 4.86x | 6.15x |
| Revenue multiple, sold | 0.42x | 0.66x | 0.86x | 1.17x |
| Revenue multiple, current listings | 0.58x | 0.93x | 1.42x | 1.81x |
| Owner earnings, sold | $86,740 | $132,779 | $185,815 | $224,440 |
| Owner earnings, current listings | $101,250 | $182,856 | $248,996 | $320,242 |
| Revenue, sold | $373,391 | $584,126 | $715,360 | $858,049 |
| Revenue, current listings | $409,214 | $680,050 | $922,794 | $1,195,120 |
Source: BizBuySell day care and child care center valuation benchmarks, 425 businesses reported sold on the platform 2021 to 2025, read October 2026. Shaded rows are current and recent listings at their asking prices. Benchmarks, not quotes.
Three things stand out. First, the readings disagree, and you should know which one the other side is quoting. The median multiple is 2.72x, the median sale over the median earnings is 2.97x, and the average is 3.27x. Multiplying medians gives $361,159, 8.6 percent below the median sale; the revenue route, $584,126 at 0.66x, gives $385,523, 2.4 percent below. Averages sit above medians because a minority of large centers sell above the upper quartile.
Second, listings are a different population. Centers on the market now report median owner earnings of $182,856, 37.7 percent more than the ones that sold, and ask a median 3.42x. The centers that did sell closed close to their own asking price, at an average sale to ask of 0.95, and in 2025 the median sale and the median ask were both $390,000. A broker quoting 3.4x is quoting listings, not closings.
Third, the owner margin is thinner than in most service businesses and it fell in 2025. The five year median is 22.7 percent; in 2025 it was 20.3 percent, on higher revenue ($650,000) and lower earnings ($132,000). Payroll is set by state ratios, so when wages rise faster than tuition the margin goes first. Each point of margin on $584,126 of revenue is $5,841 of earnings, about $15,889 of value at the median multiple.
If you are working out how to calculate SDE for the center in front of you, check the payroll against the roster before anything else. A center running rooms below ratio, or paying family members off the books, shows earnings a buyer cannot keep. Set a market rent if the owner holds the building, then find your row in section 05.
| Year | Median sale | Median ask | Sale to ask | Average SDE multiple | Average revenue multiple | Median revenue | Median SDE | Margin |
|---|---|---|---|---|---|---|---|---|
| 2021 | $320,000 | $374,500 | 0.89 | 3.18x | 0.84x | $510,649 | $127,473 | 25.0% |
| 2022 | $570,000 | $699,000 | 0.90 | 4.01x | 1.17x | $657,086 | $172,000 | 26.2% |
| 2023 | $330,000 | $350,000 | 0.98 | 2.88x | 0.74x | $520,000 | $125,564 | 24.1% |
| 2024 | $400,000 | $425,000 | 0.94 | 3.14x | 0.85x | $561,715 | $149,271 | 26.6% |
| 2025 | $390,000 | $390,000 | 1.01 | 3.40x | 0.81x | $650,000 | $132,000 | 20.3% |
Source: BizBuySell, same page. The median sale price rose 22 percent from 2021 to 2025. The 2022 jump to $570,000 came from a small number of larger centers selling that year, per the source.
Our calculation
02The median day care finances only if the buyer runs it for a modest salary
A center at this size is usually bought by someone who will work in it as director, often with an SBA 7(a) loan, or by an operator adding a site. What a financed buyer can borrow sets a practical ceiling on the price. The table runs a loan at 10.5 percent, 1.25x debt service coverage and a 10 percent injection against the median $132,779 of owner earnings, first as a business only loan on 10 years, then with half the price in real estate on a separate 25 year loan. Everything in it is computed here, not quoted.
SBA-supportable price at an $80,000 draw, against the median sale
Scale $0 to $500,000
$289,740
What $132,779 supports as a business only loan on 10 years.
$340,925
With half the price in real estate on 25 years.
$395,000
What the median day care center sold for.
| Owner draw the buyer takes | Left for debt service | Supportable price, business only, 10 years | Supportable price, half in real estate on 25 years |
|---|---|---|---|
| $0 (buyer takes no salary) | $132,779 | $728,914 | $857,683 |
| $40,000 | $92,779 | $509,327 | $599,304 |
| $60,826 (the most a buyer can draw at $395,000, business only) | $71,953 | $395,000 | $464,780 |
| $80,000 | $52,779 | $289,740 | $340,925 |
| $100,000 | $32,779 | $179,946 | $211,735 |
Computed here. Annual loan constant 0.16192 for 10 years and 0.11330 for 25 years at 10.5 percent. Supportable price is (SDE minus draw) divided by 1.25, divided by the loan constant, divided by 0.90. The real estate column weights the two constants equally. Illustrative arithmetic, not a loan offer or a credit decision.
Work it backwards and a buyer paying the median price on a business only loan can draw $60,826 a year, a little above the BLS median pay for a center director, or needs $151,953 of earnings to draw $80,000. That is the practical meaning of the 2.72x median: a day care is priced so that the buyer earns roughly a director's salary in the first years, plus the equity built as the loan is repaid. SBA SOP 50 10 8.1, effective October 1, 2026, caps a change of ownership loan at a 10 year amortization, though when the purchase includes real estate, the real estate portion may run up to 25 years.
Cash to close on the median day care
$47,499
A $395,000 purchase at 10 percent down is a $39,500 injection and a $355,500 loan. The guaranteed portion is $266,625, so the 3 percent SBA guaranty fee is $7,999. Debt service is about $57,563 a year, covered 2.31 times by $132,779, which leaves $75,216 before the owner is paid. Working capital for the first payroll, licensing fees and legal costs come on top.
The lower quartile day care
$37,000
That is all a lender can support on lower quartile earnings of $86,740 if the buyer draws $80,000. At the lower quartile multiple the same center is priced at $168,276, so a small center is bought by an owner who takes much less than $80,000 or brings far more equity. Small programs are priced by what they pay the person running them.
The lender may value it in house
Under SOP 50 10 8.1 the lender may do its own valuation when the purchase price is $350,000 or less and buyer and seller are not closely related. The median $395,000 center is above that line, so the lender orders an independent valuation, and any amount paid above the value it supports has to come from equity.
The license has to be yours by closing
Where a license does not transfer, the center cannot legally operate under you without your own. Lenders and sellers plan the closing around the licensing agency's timeline, so start the application, the background checks and the inspection as soon as the letter of intent is signed.
The lease has to outlast the loan
Most day cares rent their building. A 10 year loan on a center with three years left on its lease is a risk the lender will price or refuse. Ask the landlord for an assignment and options that run past the loan term, and read any clause that lets the landlord reset rent on a sale.
Sources: SBA SOP 50 10 8.1, effective October 1, 2026, Appendix 15 (changes of ownership: maturity, valuation). FY2026 guaranty fee tiers. A summary for pricing, not legal or lending advice.
What makes day care different
03You buy a roster, a staff and a license you have to earn again
A day care sale is the purchase of relationships held in place by a license. The families are there for the teachers, the teachers are there for the director, and the whole operation runs on a license that may not come with it. Each needs its own evidence before you agree a price.
The license
A child care license is usually tied to the operator, not the building. In Texas a license "is not transferable and applies only to the operator stated in the license application," and "a change in ownership automatically revokes a license" (Human Resources Code 42.048). The new owner applies before closing, not after.
The enrollment
Revenue is enrolled children times weekly tuition, so the roster is the asset. Ask for licensed capacity, enrollment by age room by month for three years, the waitlist, and how many families left in each of the last twelve months.
The staff
State rules set how many children each adult may supervise in each age room, so payroll is mostly fixed by the roster. Teachers who stay are what keeps families. Ask for the staff list with hire dates and pay, and who among them holds the director qualification.
Same margin, different multiple, illustrative
$181,850
Under $400k revenue
about 2x on $90,925
$395,000
Median center
sold, 2.97x on $132,779
$772,862
$850k revenue
about 4x on $193,215
Computed here. Earnings at the median 22.7 percent owner margin, multiples from BizBuySell's size statement (near 4 at $850k of sales, closer to 2 below $400k). Revenue a little more than doubles; value more than quadruples.
Read the attendance records like a balance sheet
Ask for enrollment by room and month for three years, the tuition schedule by age, the families on subsidy and the waitlist with dates. Compare paid enrollment with what the state inspection reports show for licensed capacity. A center that bills for 70 and is licensed for 72 has no room to grow, and a center billing for 45 of 72 needs a reason.
Read the inspection history before the financials
State licensing agencies inspect centers and many publish the results. Serious or repeated violations travel with the building and the staff even when the license does not, and they affect enrollment, insurance and the new owner's own application. Pull the last three years of reports yourself rather than relying on the seller's summary.
Older buildings carry a renovation rule
Under the EPA Renovation, Repair and Painting rule, a pre-1978 building that a child under six visits regularly (at least 3 hours a day, 6 hours a week and 60 hours a year) is a child-occupied facility, and paid work that disturbs paint there has to follow lead-safe practices by a certified firm. Price any planned remodel accordingly.
Sources: Texas Human Resources Code 42.048(e); EPA Renovation, Repair and Painting rule, 40 CFR Part 745. A summary for pricing, not legal advice. Licensing, ratio and inspection rules are set by each state.
Our calculation
04What the day care is worth if you will not be the director
Seller discretionary earnings include the owner's pay, and in most small centers the owner is the director who enrolls families, schedules staff, handles the licensing agency and covers a classroom when someone calls in sick. A buyer who will not do that job has to pay someone who will. The rows below use the Bureau of Labor Statistics national median wages for May 2025, plus employer FICA.
The same $395,000 price
2.97x
to an owner who directs the center
4.31x
owner directs, adds a lead teacher
5.73x
with a director hired
| Who does the owner work | Earnings left | Price as a multiple | SBA, $80,000 draw, business only | SBA, $80,000 draw, half real estate |
|---|---|---|---|---|
| Owner runs the center as director | $132,779 | 2.97x | $289,740 | $340,925 |
| Center director hired ($63,836) | $68,943 | 5.73x | $378,472 at no owner draw | $445,333 at no owner draw |
| Owner directs, one lead teacher added ($41,058) | $91,721 | 4.31x | $64,346 | $75,713 |
Computed here. BLS Occupational Employment and Wage Statistics, national estimates for May 2025: education and childcare administrators, preschool and daycare (SOC 11-9031), median $59,300 a year, 73,660 jobs; preschool teachers (SOC 25-2011), median $38,140, 478,780 jobs; childcare workers (SOC 39-9011), median $34,980, 518,910 jobs. Plus 7.65 percent employer FICA. The hired director row shows the price an investor who takes no draw could finance.
To an owner who directs the center, $395,000 is 2.97x earnings, inside the middle half of sales. With a director hired at the median wage, the earnings fall to $68,943 and the same price is 5.73x, well above the upper quartile, and even an investor who takes nothing out can finance only about $378,472. That is why the natural buyer for a single center is someone who will run it, often a director or lead teacher already working there, and why absentee owners usually buy larger centers or several at once, where one director's salary is spread over more children.
Find your row
05What a day care at your earnings is worth
Each row takes an earnings level and prices it at the lower quartile, median and upper quartile multiple, next to what an SBA buyer drawing $80,000 a year could finance as a business only loan and with half the price in real estate.
| Owner earnings (SDE) | At 1.94x | At 2.72x | At 4.03x | SBA, business only | SBA, half real estate |
|---|---|---|---|---|---|
| $86,740 (lower quartile sold) | $168,276 | $235,933 | $349,562 | $37,000 | $43,537 |
| $100,000 | $194,000 | $272,000 | $403,000 | $109,794 | $129,190 |
| $132,779 (median sold) | $257,591 | $361,159 | $535,099 | $289,740 | $340,925 |
| $150,000 | $291,000 | $408,000 | $604,500 | $384,278 | $452,164 |
| $185,815 (average sold) | $360,481 | $505,417 | $748,834 | $580,890 | $683,510 |
| $224,440 (upper quartile sold) | $435,414 | $610,477 | $904,493 | $792,929 | $933,007 |
Computed here. SBA columns on the same terms as section 02, at an $80,000 owner draw, before working capital. Illustrative arithmetic, not a loan offer.
Below about $150,000 of earnings, the $80,000 draw eats most of what a lender can count, and the business only loan stays under the median multiple price. At $150,000 it comes close, $384,278 against $408,000 at 2.72x, and at the average earnings of $185,815 it reaches $580,890, above the median multiple price of $505,417. Only at the upper quartile does the loan come close to the upper quartile price. If your numbers sit between rows, the estimator at the top of the page will place them.
Value drivers
06What moves a day care between the quartiles
The distance between the lower and upper quartile multiple is 1.94x to 4.03x, which on $132,779 of earnings is the difference between $257,591 and $535,099. The scale shows where the published readings fall.
Day care earnings multiples on one scale
0x to 5x seller discretionary earnings
1.94x
Lower quartile
2.72x
Median multiple
2.97x
Median sale over median SDE
3.27x
Average multiple
4.03x
Upper quartile
BizBuySell day care benchmarks, 2021 to 2025. Dark band, 1.94x to 4.03x, the middle half of sales. The 2.97x reading (median sale over median earnings) is computed here.
Revenue and size
BizBuySell states that a child care center with sales of $850k annually may sell for an earnings multiple near 4, while a smaller day care with sales below $400k may sell for an earnings multiple closer to 2 or less. Those thresholds sit close to the sold revenue quartiles of $373,391 and $858,049.
Utilization of licensed capacity
A center licensed for 80 children with 60 enrolled is earning on three quarters of its rooms. Empty spots are upside for a buyer and a reason for a lower multiple from the seller's side, so agree on the number from the attendance records, not the brochure.
Age mix
Infant and toddler rooms need more adults per child than preschool rooms under every state's ratios, so they cost more to run per child even when tuition is higher. Read the margin by room before you pay for a roster weighted toward infants.
Subsidy share
Many centers take state child care subsidy payments funded in part by the federal Child Care and Development Fund. Subsidy revenue fills seats, but rates and payment timing are set by the state. Ask what share of revenue is subsidy and how it has been paid over the last two years.
Staff tenure and the director
Families stay for teachers they know. A center where the lead teachers have years in the building and a qualified director stays on after the sale protects the enrollment you are paying for. A center where the owner is also the only qualified director is worth less to anyone who will not do that job.
The building
Owned real estate changes the deal and the financing. A leased center needs a lease that runs well past the loan term with an assignment the landlord has approved. In a building put up before 1978, renovations that disturb paint in rooms young children use regularly fall under the EPA lead renovation rule for child-occupied facilities (40 CFR 745).
Against preschools and schools
07Day care centers against other education and child care businesses
Day care centers carry the highest average earnings multiple of the group, 3.27x, and the highest median sale over median earnings, 2.97x, with the thinnest owner margin, 22.7 percent. Preschools sell for more in dollars, $435,000, because they earn more, $170,689, yet at a lower 2.55x on the medians. BizBuySell's reading of the group is that the larger the business, the more students and the lower the churn, the more it is worth relative to its earnings. SDE multiples by industry shows the whole market.
| Category | Median revenue | Median SDE | Average SDE multiple | Median sale over median SDE | Owner margin | Median sale | Sale to ask |
|---|---|---|---|---|---|---|---|
| Day care and child care centers | $584,126 | $132,779 | 3.27x | 2.97x | 22.7% | $395,000 | 0.95 |
| Preschools | $612,000 | $170,689 | 3.12x | 2.55x | 27.9% | $435,000 | 0.90 |
| Schools | $430,272 | $134,743 | 2.58x | 2.23x | 31.3% | $300,000 | 0.95 |
| Other education and child related | $449,058 | $123,395 | 2.31x | 2.03x | 27.5% | $250,000 | 0.92 |
Source: BizBuySell education and child care comparisons, 2021 to 2025. Owner margin and median sale over median SDE computed here.
Against the wider service market the day care median of $395,000 sits between property management companies at $397,500 and cleaning businesses at $260,000, and above the $250,000 of laundromats, which earn far less per dollar of price but need no license holder on site.
Methods
08The five ways a day care gets valued
You will meet most of them in one sale. The lender counts earnings after the owner's salary, the appraiser it hires reconciles several methods, a real estate appraiser values any building, and an operator looking to add a site counts enrolled children and open seats. Knowing which one the other side is using is most of the negotiation.
Seller discretionary earnings multiple
The primary method for an owner-run center and the one an SBA lender underwrites. Normalized SDE times a multiple, where half of all sales landed between 1.94x and 4.03x. Normalize first: family members on payroll, the owner's own children enrolled at no charge, a vehicle used for personal trips, and rent the owner pays to a property company he or she also owns.
Revenue multiple
Centers sold at a median 0.66x revenue and an average 0.86x. Use it as a cross-check only. Two centers with the same tuition income can keep very different shares of it, depending on rent, the infant share of the roster and how well rooms are filled against the ratios.
Real estate appraisal
When the center owns its building, the property is appraised on its own and priced at a fair market rent inside the business valuation. BizBuySell names whether real estate is owned or leased as the other major factor in a center's multiple, after size.
EBITDA multiple
Multi-site operators and larger groups price on EBITDA after a market salary for a director at every site. That figure is lower than SDE, so an EBITDA multiple is never comparable with the SDE multiples on this page.
Enrollment and capacity review
Industry buyers look at utilization (enrolled children against licensed capacity), the age mix, the subsidy share of revenue and tuition rates against competing centers. A full center with a waitlist and room to raise rates supports the upper half of the range.
Our guide to business valuation for an SBA loan lists what the lender and its appraiser will ask for, and business valuation cost shows what each kind of report costs.
Questions
Daycare valuation questions, answered against the sold record
How much is a daycare worth?
The median US day care and child care center sold between 2021 and 2025 went for $395,000, on median revenue of $584,126 and median owner earnings of $132,779. Half of all sales landed between 1.94x and 4.03x owner earnings, which on $132,779 is $257,591 to $535,099. Size, enrollment against capacity, staff and the building decide where a center lands.
How do you value a daycare business?
Normalize the owner earnings first, then apply a multiple between about 1.94x and 4.03x, higher for centers above roughly $850,000 of revenue with full rooms and long-tenured staff. Check the result against revenue at 0.42x to 1.17x, value any owned building separately at a fair rent, and test what an SBA lender would finance.
What is the multiple for a daycare business?
Day care centers sold at a median 2.72 times seller discretionary earnings and an average of 3.27x across 2021 to 2025, with a lower quartile of 1.94x and an upper quartile of 4.03x. On revenue the median was 0.66x and the average 0.86x. In 2025 alone the average earnings multiple was 3.40x.
How much does a daycare owner make?
The median center sold between 2021 and 2025 produced $132,779 of owner earnings on $584,126 of revenue, a 22.7 percent owner margin. The lower quartile earned $86,740 and the upper quartile $224,440. Those earnings include the pay of an owner who usually works as the center director.
Is a daycare a good business to buy?
It can be, on the right terms. BizBuySell calls day care one of the more consistently profitable sectors in its data, and the average earnings multiple of 3.27x is the highest in its education and child care group. The catch is the price against the earnings, which leaves little room for an owner salary on a financed purchase.
How much does it cost to buy a daycare?
The median day care center sold for $395,000. Financed with an SBA 7(a) loan at 10 percent down, that is a $39,500 injection plus a $7,999 guaranty fee, about $47,499 of cash at closing before working capital, licensing and closing costs.
Can you get an SBA loan to buy a daycare?
Yes, child care centers are eligible, but the earnings limit the price. On a 10 year loan at 10.5 percent, the median $132,779 of earnings supports about $289,740 if the buyer draws $80,000 a year, 26.6 percent short of the median sale. To pay $395,000 the buyer can draw at most $60,826.
Does a daycare license transfer to a new owner?
Usually not. In Texas a child care license is not transferable, applies only to the operator named in the application, and a change in ownership automatically revokes it. Other states run their own rules, so apply with your state licensing agency early enough that the new license is in place on the closing date.
How long does it take to sell a daycare?
BizBuySell reports a median of 214 days on the market for day care centers that sold, about seven months from listing to an accepted deal. Lender review, the business valuation, the new owner's license application and any landlord consent usually add another two to three months before closing.
How much does a business valuation cost for a daycare?
A formal valuation commonly runs $1,500 to $8,000 for a calculation engagement and $5,000 to $15,000 for a full conclusion of value, which is 0.38 to 2.03 percent and 1.27 to 3.80 percent of a $395,000 sale. For an SBA purchase above $350,000 the lender orders an independent valuation.
Asked another way
What day care owners and buyers ask when they are deciding
These come up once the numbers are understood and the decision is the real problem, whether that is answering a listing, buying without running the center yourself or deciding what the building is worth to the deal. Answered against the same sold record.
Is a daycare listed at 4 times earnings a fair price?
Only for a large, full center. Sold day cares closed at a median 2.72x and an upper quartile of 4.03x, and BizBuySell ties a multiple near 4 to centers with about $850,000 of revenue. On a $450,000 center, 4x needs full rooms, a waitlist and staff who stay to hold up.
Why do daycare listings ask so much more than they sell for?
Partly because the listings are bigger. Current listings show median owner earnings of $182,856, 37.7 percent above the centers that sold, and ask a median 3.42x against 2.72x paid. The sold centers themselves closed close to their own asking prices, an average sale to ask of 0.95 and 1.01 in 2025.
Can I buy a daycare without running it myself?
Only with more equity or a smaller price. On the median center, a director at the BLS median wage plus payroll tax costs $63,836, which takes earnings to $68,943 and makes a $395,000 price 5.73 times earnings, above the upper quartile. Even with no owner draw the loan reaches about $378,472.
Does owning the building make a daycare worth more?
It makes the deal bigger and easier to finance, not the business itself more valuable. The building is appraised on its own and the business is priced at a fair rent. With half the price in real estate on a 25 year term, the median earnings at an $80,000 draw support about $340,925 instead of $289,740.
Do I need a formal appraisal or is an estimate enough?
An estimate is enough to set an asking range or decide whether a listing deserves an offer. For an SBA purchase above $350,000, the lender orders an independent valuation, and the loan cannot exceed what it supports. Know the range before you pay for that report.
Benchmarks behind the estimate
Buying or selling a service business
Know the range before the lender's appraiser does
Enter revenue and owner earnings, for your own day care or for a center you are considering, and read a value range against real day care sales. An estimate in a few minutes, before you pay a broker or an appraiser.