What should I ask about a test prep centre’s referrals from school counsellors?
Ask how many families arrive through counsellors, how those relationships began and who holds them. If the owner personally maintains each contact, the referrals may not follow the business to a new owner. Ask for names only if the seller is comfortable sharing them.
Begin by asking for the source of every new enrolment, tracked across a long enough stretch to show a pattern. Counsellor referrals should appear as their own line next to word of mouth, search and advertising. If the seller has no record, treat the claim as unproven.
Then ask who the contact is. A referral that depends on friendship with one owner is fragile. A referral that rests on the centre’s reputation, a shared event or a regular information night is easier to pass on. Ask whether the counsellors are paid or given any benefit, and whether the centre has written guidelines about that. Ask also whether referrals dropped when a counsellor retired or changed schools. How the centre handled that loss shows how durable the connection really was, and whether a new owner could rebuild it.
Consider the risk of concentration. If a handful of schools send most of the families, losing one changes the picture quickly. Ask which schools those are and how long each has sent students. Finally, ask the seller to introduce you before closing, and agree what help they will give afterwards. Plan how you will keep those relationships warm in your first term.
Key takeaways
- Ask for enrolments grouped by source, with counsellor referrals shown separately.
- Find out whether the relationship belongs to the owner or the centre.
- Ask which schools send the most families and for how long.
- Ask what happened to referrals when a counsellor moved on.
Related reading
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
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