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Opportunities

Comprehensive Grant Services With 50% Profit Margin

CASH FLOW
$921,839

Specifications

  • Revenue
    $1,855,658

  • Profit Margin
    50%

  • Employees
    (7) Employees, (13) 1099 Contractors

  • Intangible Assets
    Positive company culture, excellent reputation, consistent record, highly organized and reliable standardized process

  • Equipment
    $107,000

  • Price
    $4,050,000

  • Down Payment
    15%

  • Location
    Remote

  • Service Area
    California (90%), Texas (10%), National potential

When local governments in California and Texas are looking for comprehensive grant consulting, they know that this business will offer superior, affordable, and dependable services. This company has developed a strong reputation for being consistent and reliable as a result of their standardized process for their three main areas of service: grant research, grant writing, and grant management.  Not a single grant proposal deadline has been missed in the company’s history.  All manuals, training, and procedures are in place for a smooth continuation of operations.  Utilizing a blended rate and annual contracts, this consulting firm has steady work and income.

 

Currently employing 7 individuals and 13 contractors, this business hires highly skilled writers and managers to ensure consistency and quality across all services.  With very low overhead, this company is entirely cloud-based with employees who work remotely.  The sales of this business also includes unique proprietary PC grant management software to streamline and manage grant awards.  this software is currently in phase 2 of 5, with all future phases planned with phase 3 likely resulting in cash return.   

 

Growth can be found by hiring additional qualified employees, expanding the service area, and making additional contacts with local governing bodies.  This business can be easily relocated anywhere in the country.

Business Highlights

  • Year Established:  2000
  • Location:  Work is done remotely
  • Services:  Grant research, writing, and management
  • Service Area:   California (90%), Texas (10%)
  • Contract Length:  1-5 years
  • Clients: Municipal governments, counties, water districts, transportation agencies, schools
  • Clients:  51
  • Reason for Selling:  Capital for other ventures
  • Employees: (7) Employees, (13) 1099 Contractors
  • Seller Training Period: 3-6 Months, Negotiable
  • Growth Opportunities:  Hire additional highly qualified staff, expand service area, make additional contacts with local governing bodies, advertise
  • Current Owner’s Responsibilities:   
    • Owner 1: Billing, back office, oversees external partners for IT, insurance, accounting, payroll, and legal services   
    • Owner 2: Review proposals, quality assurance, quotes
    • All duties could be absorbed by current staff with the exception of back office work

Financial Highlights

  • List Price: $4,050,000
  • Gross Sales:
    • 2017: $1,855,658
    • 2016: $1,982,478
    • 2015: $1,499,193
    • 2014: $937,425
  • Cash Flow:
    • 2017: $921,839
    • 2016: $850,736
    • 2015: $632,605
    • 2014: $304,099
  • Assets Included in Purchase*
    • Intangible Assets:  Positive company culture, excellent reputation, consistent record, highly organized and reliable standardized process
    • Software:   $107,000
    • A/R:  $295,000
    • Secured 2018 Contracts:  $2,000,000+

*amounts may vary

Clients

  • Municipal Governments
  • Counties
  • Water Districts
  • Transportation Agencies
  • Schools

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Grant Research
    • Track local, regional, state, and federal grant opportunities
    • Maintain comprehensive library of all funding opportunities
    • Review grant solicitations and determine value in applying
    • Prepare and distribute Fact Sheets and notify clients about funding opportunity  
    • Assist clients in making go/no decision
    • Attend workshops and liaise with staff from funding agencies 
  • Grant Writing
    • Develop grant writing estimate detailing total cost to develop grant proposal
    • Develop timeline and checklist to guide development of entire grant writing process
    • Develop grant proposal, including budget, schedule, scope of work, support letters, visuals/graphics
    • Conduct quality control and submit grant proposal on time 
  • Grant Management
    • Organize files and grant tracking activities
    • Ensure compliance with complex state and federal regulations
    • Complete reports, financial reports, payment requests
    • Provide on-call assistance
    • Liaise with grantors or state/federal officials
    • Modify and amend scope of work, schedules, and budget
    • Prepare close-out reports and final funding reimbursements
    • Provide audit preparation and records retention

** Average contract size is $60,000.

**For every $1 a client spends on the services offered by this business, they are returned $25 - $75 in awarded grant money.

**This company has an 80% award rate.

Employees

  • Directors (4)
    • Client Management and Grant Writing 
  • Grant Managers (1) 
  • Research Analyst (2)
    • Grant Research 
  • Associate (10)
    • Client Management and Grant Writing 
  • Management Associate (3)
    • Grant Management

Growth Opportunities

  • Hire additional highly qualified staff 
  • Expand service area 
  • Make additional contacts with local governing bodies 
  • Currently this company does not advertise as 95% of growth is attributed to word-of-mouth referrals from current and former clients.  Advertising could potentially bring in additional business.

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          Prescribed Multiple     =          Fair Market Value

Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.

For this business, a 2017 Cash Flow was used with a prescribed multiple is 4.4.  With this information, the computation is as follows:

$921,839         x          4.4       =          $4,056,091

The Fair Market Value found above positions the business List Price at $4,050,000.

Funding Example

Purchase Price:                    $4,050,000

15%Buyer Down Payment:   $607,500

75%Bank Loan:                   $3,442,500

Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $45,239.

After business expenses and loan payments, a buyer would retain a profit of $378,967, which results in a 62% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $4,050,000 with the terms listed above, the coverage ratio is 1.7. 

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

Purchase Price:

$4,050,000

$
%
OR
$
%
OR
$
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:
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

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
Omaha, NE 68114

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The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.