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Opportunities

2 ½ Days per Week Vet Practice in Southwest Iowa

CASH FLOW
$100,050

Specifications

  • Price
    $280,000

  • Revenue
    $291,480

  • Cash Flow
    $100,050

  • Profit Margin
    34%

  • Multiplier
    2.80

  • Down Payment
    10%

  • Equipment
    $147,072

  • Lease
    $1,200

  • Valuation
    $280,140

  • Reason for Sale
    Retirement

  • Service Area
    Montgomery County, Iowa

  • Employees
    1 FT Vet, 1 FT Tech, plus additional PT Staff

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.  

Business Highlights

  • 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

Financial Highlights

  • 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 StatementP&L StatementTax ReturnTax ReturnTax ReturnNotes
2015201420132012
GROSS SALES$291,480$309,360$307,793$309,538
% Change Over Prev. Year-5.78 %0.51 %0.00 %
Net Income Shown on Financial Statement$76,424$65,923$108,844$77,048
ADDBACKS
Depreciation$0$22,590$0$3,543Non Cash Item
Contributions/Donations$8,918$0$0$0
Health Insurance$0$1,037$3,957$3,842
Non-Business Telephone$1,200$1,200$1,200$1,200$100/month for personal cell phones
Meals & Entertainment$993$0$757$0
Auto-Personal Use$6,456$7,696$7,043$7,488
Contracted Labor$13,025$19,194$25,623$29,585Labor pay to Vets when owner began traveling 40% of the time away from his office
Rent$-14,400$-14,400$-14,400$-14,400New Owner's monthly rent will be $1,200
Property Tax$7,434$0$0$0Seller maintains Real Estate - non-onward going expense
TOTAL ADDBACKS$23,626$37,317$24,180$31,258
Seller's Cash Flow = Total Addbacks + Net Income$100,050$103,240$133,024$108,306
Profit Margin34.32 %33.37 %43.22 %34.99 %
  • Over 30% profit margin consistently
  • Onward Going Rent to be $1,200/month
  •  

Valuation Details

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

Purchase Price:

$280,000

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OR
$
%
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$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

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: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2015 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2015 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

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210 N 78th St. 2nd Floor
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