2 ½ Days per Week Vet Practice in Southwest Iowa
Turnkey operation with huge growth potential. The current DVM works only about 2 ½ days per week and is selling this fully staffed clinic in order to retire. Established in 1970 in Montgomery County, Iowa, this vet practice is fully furnished with all necessary furniture, fixtures, and equipment (this is a value of $147,072) for day to day operations.
Occupying a 1,502 square foot facility, with 2 offices, 1 lab, and 1 operation room – a Buyer would only pay $1,200/month in rent. This has been accounted for in the Cash Flow/Owner Profit amounts annually.
The facility is staffed with 1 FT Vet, 1 FT Tech, plus additional PT Staff. Seller will train and transition for up to 6 months post-close if Buyer desires.
A Buyer would receive a Net Operating Income (NOI) of $55,477 in year one after all expenses and loan payments were made. This results in a 198% Return on the Buyer’s initial investment of $28,000.
- Year Established: 1970
- Location & Service Area: Montgomery County, Iowa
- Lease: Only $1,200/month for 1,520 sq./ft. including 2 offices, 1 lab, and 1 operation room
- Reason for Selling: Retirement
- Employees: 1 FT Vet, 1 FT Tech, plus additional PT Staff
- Hours: Clinic is open 7 days a week
- Growth Opportunities: Current DVM owner works on average 2 ½ days per week, expand to full time hours
- Seller Training Period: Seller will train and transition for up to 6 months - if Buyer desires
- List Price: $280,000
- Gross Sales
- 2015: $291,480
- 2014: $309,360
- 2013: $307,793
- 2012: $309,538
- Owner Profit/Cash Flow
- 2015: $100,050
- 2014: $103,240
- 2013: $133,024
- 2012: $108,306
- Profit Margin: 34%
- Multiple: 2.8
Recasted Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|% Change Over Prev. Year||-5.78 %||0.51 %||0.00 %|
|Net Income Shown on Financial Statement||$76,424||$65,923||$108,844||$77,048|
|Depreciation||$0||$22,590||$0||$3,543||Non Cash Item|
|Non-Business Telephone||$1,200||$1,200||$1,200||$1,200||$100/month for personal cell phones|
|Meals & Entertainment||$993||$0||$757||$0|
|Contracted Labor||$13,025||$19,194||$25,623||$29,585||Labor pay to Vets when owner began traveling 40% of the time away from his office|
|Rent||$-14,400||$-14,400||$-14,400||$-14,400||New Owner's monthly rent will be $1,200|
|Property Tax||$7,434||$0||$0||$0||Seller maintains Real Estate - non-onward going expense|
|Seller's Cash Flow = Total Addbacks + Net Income||$100,050||$103,240||$133,024||$108,306|
|Profit Margin||34.32 %||33.37 %||43.22 %||34.99 %|
- Over 30% profit margin consistently
- Onward Going Rent to be $1,200/month
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business. The formula used is as follows:
Cash Flow x Multiplier = Price
"Cash flow" is the sum of net income plus any owner perks and non-onward going expenses.
"Multiplier" is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).
The Cash Flow for 2015 is $100,050. The prescribed multiplier is 2.8
With this information, the computation result follows:
$100,050 x 2.8 = $280,140
The List Price for the business is set at $280,000
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2015 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2015 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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