Last week, I was on the private equity and investor activity panel at the CECU Executive Summit in Vancouver. The room was packed with U.S. and Canadian investors, lenders, and career college operators—all discussing where capital is flowing, what buyers will actually pay for, and why some colleges sell for strong multiples while others struggle to close at all.
The message I kept hearing from every serious buyer in that room: sell from strength, not stress.
That means treating transaction readiness as a deliberate project you start years before you go to market. Not six panicked months after a buyer shows interest (or an unplanned personal situation arises).
If you own a private career college and you're thinking about an exit in the next 2-3 years, this checklist will show you exactly where you stand—and what needs fixing before you let buyers look under the hood.
1. Get Clear On Your Objectives And Timeline
Before you worry about valuation multiples, you need to answer some more complex questions about what you actually want.
Are you looking for a full exit where you walk away at closing? Or do you want to roll equity and stay involved in growth? How many more years do you really want to work? Do you need a strategic buyer who understands your programs, or are you comfortable with a private equity fund that will install its own management team?
Your answers drive everything: the type of buyer you target, the deal structure you'll see, and when you should actually go to market. A college that's 2-3 years from sale has time to fix problems and invest in real value drivers. A college that's six months out has to live with whatever track record it's built.
I've watched owners rush to market with no clear plan, only to discover they hated every offer structure they received. Don't be that person.
2. Know What Your College Is Actually Worth
Most owners carry a valuation number in their head that has zero connection to the market. I can't tell you how many times I've had a first call where someone says, "I think it's worth $8 million," and the trailing financials support maybe $4 million on a good day.
Buyers don't pay for sentiment. They pay for cash flow, growth potential, and risk-adjusted returns.
Start with reality. Pull 3-5 years of financial statements, enrollment data, and student outcomes. Calculate your actual EBITDA—not "net income" after you've run personal expenses through the business. Then look at what comparable career colleges in your sector and region are actually selling for.
Understand the difference between what your trailing twelve months support and what you hope the business could be worth if everything goes perfectly. That gap is called risk, and buyers price it accordingly.
Going to market with fantasy numbers wastes everyone's time and damages your credibility with the serious buyers you actually want.
3. Get Your Financial House In Order
On the CECU panel, I made the point that buyers will forgive a lot of things. They'll forgive aging facilities. They'll forgive turnover in admissions staff. They'll even forgive some enrollment softness if you can explain it.
But they will not forgive messy financials.
I watched a deal blow up because the owner couldn't reconcile cash receipts to reported tuition revenue. The buyer's accountants identified a gap and assumed it was fraud. It wasn't fraud—it was just sloppy bookkeeping. But the deal died anyway.
Your college needs to survive a full audit-style review. That means clean, reconciled financials for at least 3-5 years. Clear separation of business and personal expenses. Proper recognition of tuition revenue, refunds, and deferrals. Transparent treatment of owner compensation, related-party rent, and any management fees flowing to entities you control.
You also need a clean bridge from your "as reported" financials to "normalized" EBITDA so buyers can see what the business actually earns without your personal spending running through it.
If your statements are six months late, full of unexplained adjustments, or prepared by your nephew who "knows QuickBooks," you will either lose buyers or get heavily discounted offers. Fix this first.
4. Prove Compliance, Outcomes, And Program Quality
In today's environment, buyers are paying for regulatory discipline and student outcomes—not just enrollment growth. The days of buying a revenue stream and hoping for the best are over.
You need to be able to demonstrate current licenses and approvals in good standing, a track record of clean audits and timely filings, accurate student records and refund practices, and program-level outcomes, including completion rates, licensure pass rates, and job placement data, where applicable.
One of my clients had 94% completion rates across three flagship programs. Exceptional performance. But they couldn't produce the underlying documentation because their student information system was a mess. During due diligence, the buyer assumed the numbers were inflated and walked. We eventually found another buyer, but it took another six months.
You should be able to answer any compliance or outcomes question with "two clicks to truth." That level of preparedness reduces perceived risk and can add half a turn to your multiple.
5. Build A Credible Growth Story
Your valuation is based on the trailing twelve months, but buyers are paying for future cash flow. That means your program mix and revenue model really matter.
Buyers want to see flagship programs aligned with durable employer demand—especially in healthcare, skilled trades, and technology. They get nervous when 60% of your revenue comes from a single program or funding source. They love seeing a credible pipeline of new programs or campus expansions that are actually underwritten, not just wishful thinking.
Last year, I worked with a college that had been flat for five years: solid business, strong outcomes, but no growth story. We helped them document their expansion strategy into a second campus and pilot a new program. That narrative added $600K to the final purchase price because the buyer could model future growth with confidence.
A well-diversified program portfolio with clear employer partnerships and clinical capacity will attract better buyers and better terms.
6. Strengthen Leadership And Reduce Key-Person Risk
Buyers do not want to purchase a one-person show. They want an institution that can run without the founder having to answer every question and a turn-key operation.
If your answer to "who runs the college if you take six months off" is "no one," that's a serious problem. It will either kill the deal or force you into a heavy earn-out structure, locking you in for years at terms you may not like.
You need a capable management team that can operate day to day without you. Clear roles and responsibilities. A realistic succession plan for senior leaders. Thoughtful retention and incentive plans so your key people don't leave the moment the deal closes.
I've seen deals where the buyer insisted the owner stay for three years post-close because no one else could run the business. The owner wanted to retire. The buyer needed operational continuity. The deal happened, but the owner spent three miserable years working for someone else.
Start building your team now, even if it feels expensive. It will pay off in purchase price and deal flexibility.
7. Address Tax And Deal-Structure Questions Early
On the CECU panel, we discussed how much value is lost through poor tax planning or rushed decisions on deal structure. This is where getting early advice pays for itself ten times over.
Should you structure it as an asset sale or a share sale (also dependent on regulatory requirements)? How will you manage capital gains, recapture, and other tax exposures? Are there pre-sale reorganizations that could protect value or simplify the transaction?
I had a client who could have saved considerable tax dollars with a simple pre-sale reorganization. But they didn't start the planning until after they had an LOI in hand, and by then it was too late. They paid the full tax bill because they missed the window.
Don't wait until you have an offer to think about structure. By then, your negotiating leverage is gone. Talk to your tax advisor now.
8. Decide What Kind Of Exit You Actually Want
Strategic buyers, private equity funds, and management buyouts each involve different trade-offs. There's no universal "right answer"—there's only the right answer for your situation.
Do you want a full exit at close, or are you willing to roll 20-30% equity and stay involved? Do you prefer a strategic operator who already runs schools, or a financial sponsor who will bring in their own team? What's your appetite for earn-outs, earn-ups, seller financing, or other contingent structures?
And what about the non-financial considerations? What happens to your staff? Does the buyer respect the mission and brand you've built? Are they going to gut the business for cost savings or actually invest in growth?
I've worked with owners who turned down higher offers because the buyer's reputation was terrible. I've also worked with owners who took lower offers because they trusted the buyer to protect their legacy. Both made the right call for their priorities.
Figure out what matters to you before you start taking meetings.
9. Build Your Data Room And Marketing Materials Now
Serious buyers will put your college under a microscope during due diligence. Transaction-ready sellers anticipate this and organize everything in advance.
You need clean financial, legal, HR, and compliance documentation. Program-by-program enrollment and outcomes history. Clear student journey data showing inquiries, starts, withdrawals, completions, and refunds. Lease documents, vendor contracts, and partnership agreements. A draft information memorandum that tells your story coherently and positions the opportunity for growth.
You also need a plan for marketing the college confidentially, screening buyers under NDA, and managing multiple interested parties without disrupting daily operations or spooking your staff.
Last year, I worked with a college that had its entire data room organized before we ever went to market. We closed in 90 days with zero surprises. Compare that to another deal where we spent four months in due diligence hell because the seller couldn't find basic documents. The buyer re-traded twice, and the deal almost died.
Preparation drives speed, certainty, and price. This is where an experienced M&A advisor earns their fee.
10. Plan For Life After The Sale
A transaction doesn't end at closing. How you manage the transition will affect staff morale, student experience, regulatory approvals—and your own satisfaction with the deal.
You need a clear communication plan for staff, students, regulators, and accreditation bodies. A realistic view of how long you'll stay on and in what capacity. And a personal plan for what you'll actually do after the sale closes.
I've seen owners who sold for life-changing money and were miserable six months later because they had no plan for the next chapter. I've also seen owners who structured thoughtful transitions, handed off successfully, and walked into retirement with zero regrets.
Think about this early. A financially successful deal that leaves you feeling empty is not a win.
Why You Need To Start Today
The best career college sales happen when owners give themselves 2-3 years to prepare. That window gives you time to clean up your financials, resolve compliance issues, strengthen leadership, pilot new programs, and work through tax planning without the pressure of an active deal.
Owners who wait until the last minute end up accepting heavier earn-outs, more seller financing, lower certainty—or worse, they go to market and discover they're not ready to sell at all.
The colleges that command premium valuations and attract top-tier buyers are those that began preparing years in advance.
Let's Talk About Where Your College Stands
We've spent over 30 years advising career college owners across North America on sales, mergers, and acquisitions. We work with the same private equity funds and strategic buyers who were in the room at the CECU Summit—the ones who actually have capital to deploy and know how to close deals.
If you're within 2-3 years of a potential exit, now is the time to get an honest assessment.
Here's what we can do for you:
- Complete a confidential sell-side readiness review to identify gaps before buyers find them.
- Benchmark your valuation range against real market comparables.
- Build a clear roadmap from where you are today to be fully transaction-ready
- Connect you with the right buyers when the timing is right
The first conversation is confidential and costs you nothing.
Call me, Doug Halladay, directly at 1.800.687.1492 or reach me on WhatsApp at 604.868.0002 (WeChat: dhalladay).
You can also visit halladayeducationgroup.com or buyingandsellingschools.com for more resources on career college M&A.
A serious sale starts with preparation. If you do the work now, you'll have far more control over who you sell to, when you sell, and on what terms.
Don't wait until a buyer shows up at your door. By then, it's too late to fix what's broken.