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Opportunities

Consulting & Coaching for Leaderships Teams

CASH FLOW
$313,612

Specifications

  • Price
    $1,223,000

  • Cash Flow
    $313,612

  • Revenue
    $451,889

  • Location
    Kansas City - relocatable

  • Employees
    7 Consultants, 1 Administrative Assistant

  • Service Area
    60% in Kansas City area, 40% Nationwide

  • Profit Margin
    70%

  • Intangible Assets
    Proprietary software, client relationships, reputation

  • Valuation
    $1,223,086

This is a coaching business unlike any other, with the seller operating remotely from Hawaii 50% of the time. Run as a lifestyle business in every sense of the word, the seller profits over $300,000, and lower overhead leaves the company with a 69% profit margin. Located in Kansas City, many clients are spread across the nation, and are mostly concentrated in healthcare, social services, and the arts.

Services include strategic planning, portfolio assessment, board assessment & development, leader & organization development, and coaching. They have a rich portfolio of intellectual property, owning three registered trademarks and many copyrighted internally-developed models, as well as an assortment of selected commercial tools adapted to deliver effective support to clients. The company is contracted for the length of a project, providing needed services on site, virtually and through conferencing.

While the seller does the bulk of the travel, there are 7 consultants that work with clients in the Kansas City area or remotely as needed. A buyer could choose to still take the choicest jobs while offering more travel time to the consultants.

This is a unique opportunity to take an established company and grow it by entering the private sector, hiring more consultants, or offering more seminars. A motivated buyer could leave the company as is and still profit well, or take the bull by the horns and work with more clients and markets. 

Business Highlights

  • Years in Business: 15+
  • Location: Kansas City - relocatable as seller lives in Hawaii 50% of the time
  • Service Area: 60% in Kansas City area, 40% Nationwide
  • Clients: Several hundred – mostly non-profits and government agencies
  • Industries: Healthcare, social services, professional associations, education, arts and more
  • Services: Strategic planning, portfolio assessment, board assessment & development, leadership development, organizational development, coaching, workshops, facilitation, public speaking
  • Lease: Office space is leased in a business park
  • Reason for Selling: Nearing retirement
  • Employees: 7 Consultants, 1 Administrative Assistant
  • Seller Training Period: 3 - 6 months
  • Growth Opportunities: Private sector companies. Hire more consultants. Offer more seminars. Explicit promotion in target sectors.
  • Current Owner’s Responsibilities: Most of the client services. Business development. Frequently works remotely.

Financial Highlights

  • List Price: $1,223,000
  • Gross Sales
    • 2016 - $451,889
    • 2015 - $501,971
    • 2014 - $260,323
  • Cash Flow
    • 2016 - $317,574
    • 2015 - $316,569
    • 2014 - $113,815
  • YOY Growth: 74% increase in sales between 2014 and 2016
  • Profit Margin: 70%
  • Assets Included in Purchase:
    • Equipment: Office furniture, fixtures and equipment
    • Intangible Assets: Proprietary software, client relationships, reputation

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnNotes
201620152014
GROSS SALES$451,889$501,971$260,323
Net Income Shown on Financial Statement$-7,131$20,484$4,597
ADDBACKS
Compensation to Owner$226,990$210,000$54,211
11% Tax on total W2 Salaries$24,969$23,100$5,963
Depreciation$0$2,699$204Non-cash item
Interest$0$3,461$7,602Non-onward going expense
Rent$21,600$21,600$25,200Rent for owner's KC apartment - $2100/mo in 2014, $1800/month in 2015/2016
Employee Benefit Plan$5,374$3,579$2,488Owner's health insurance
Pension/Profit Sharing$29,000$29,000$13,550Owner's 401K
Mileage Reimbursement$2,462$2,646$0
Travel$10,348$0$0Travel for owner when consulting from Hawaii
TOTAL ADDBACKS$320,743$296,085$109,218
Seller's Cash Flow = Total Addbacks + Net Income$313,612$316,569$113,815
Profit Margin69.40 %63.07 %43.72 %

 

  • While sales were $50,000 less in 2016, the profit margin was higher and the seller took a higher salary as well
  • Sales grew by 74% between 2014 and 2016

Services

 

Strategic Planning Board Assessment & Development
  • Clarify an organization’s vision, mission and values
  • SWOT Analysis
  • Identification of critical issues
  • Programs & services assessment
  • Development of strategic initiatives
  • Development of goals, objectives and action plans
  • Key performance measurements
  • 3 to 5-year staffing plan and budget
  • In-depth board assessment processes
  • Customized board development processes and workshops
  • Board retreat facilitation
  • Support in development of board policies and procedures

 

Leadership & Organizational Development

High staff performance High performing teams
  • Individual leadership/"lead from where you stand"
  • Understanding the big picture for the organization
  • Clear understanding of individual roles and responsibilities toward accomplishment of plan
  • Conflict resolution
  • Team performance assessment
  • Identify symptoms of destructive and counterproductive activity
  • Prescribe and initiate actions to move the team toward high performance
  • Enhancing employee performance management/support
High-impact leadership
  • Leadership skills/impact assessment
  • Understanding of change management process
  • Creating a culture of leadership development
  • Effective communication and leadership skills
  • Maximizing the power of acknowledgement

 

Coaching

Goal Process
  • Enhance leadership skills based on needs
  • Enhance emotional intelligence through self-awareness and individual coaching
  • Enhance performance of team through more effective leadership
  • Broad feedback to leaders regarding their skills, leadership qualities and behaviors using The Leadership Circle Profile 360 assessment tool
  • Develop individualized coaching goals
  • Series of coaching sessions

 

Strategic Planning Tool

  • The company has developed a proprietary online planning tool to help organizations streamline their strategic planning processes and manage ongoing implementation and progress reporting
  • This is an intuitive tool designed to help drive a plan’s implementation and management

The software offers:

  • Flexible, time-saving features for enhanced plan development
    • Centralizes strategic plan content so that when one area of the plan is updated, the change is made everywhere and accessible to all users
  • Simple, efficient cooperation
    • Allows users to suggest, review and comment on changes
  • Assessments and reports
    • At-a-glance information about efforts moving forward and any roadblocks
  • Ties individual performance to the strategic plan
    • Create individual performance plans for all team members
    • Set and track individual goals that align with the strategic plan
  • Ongoing plan implementation and scorecards
  • Full training and support from the company

Notable Past Clients

Below is a small sampling of the many clients this company has worked with over the 15+ years:

Foundations
  • American Pharmacists Association Foundation – Washington, D.C.
  • Care Foundation – Northwest Arkansas – Springdale, AR
  • Johnson County Library Foundation
Healthcare
  • Sedgwick County Health Department – Wichita, KS
  • Center for Medical Technology Policy – Baltimore, MD
  • Kaiser Permanente – Los Angeles, CA
Education
  • Benton County Sunshine School – Bentonville, AR
  • LULAC National Education Service Centers
  • Wildwood Outdoor Education Center
Social Services
  • Dakota Boys & Girls Ranch
  • The Family Conservancy
  • Nemaha County Training Center – Seneca, KS
Arts & Culture
  • Kansas City Ballet
  • Folly Theater
  • Long Island Children’s Museum – Long Island, NY
Public Sector
  • Center for Disease Control – Atlanta, GA
  • Food & Drug Administration – Silver Spring, MD
  • Johnson County Department of Health & Environment

Employees

  • 7 Consultants
    • 2 specialize in Strategic Planning
    • 1 is knowledgeable in piloting and assisting with the company’s online tool
    • 3 Coaches
    • 1 Researcher/Analyst
  • 1 PT Administrative Assistant

Growth Opportunities

  • Private sector companies
    • Currently the business focuses mostly on non-profits and government agencies, although they have in the past and are currently working with some for-profit clients as well
    • A buyer wanting to grow the client base could consider branching out by working with private sector businesses, and use targeted promotion in an existing market of already deep experience
  • Hire more consultants
    • There are currently 7 consultants; 5 that work mostly in the Kansas City area
    • Recruiting consultants in other cities/markets as well as locally can increase client reach
  • Offer more seminars
    • With the right resources in place, a buyer could look into offering more seminars and workshops to increase name recognition and secure a client base
  • Explicit promotion
    • Conduct more explicit promotional activities in targeted sectors, capitalizing on successes

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, the 2016 Cash Flow was used with a prescribed multiple of 3.9.  With this information, the computation is as follows:

$313,612         x          3.9       =          $1,223,086

The Fair Market Value found above positions the business List Price at $1,223,000.

Funding Example

Purchase Price:                    $1,223,000

15%Buyer Down Payment:   $183,450

20%Seller Financing:             $244,600

65%Bank Loan:                      $794,950

Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $4,560.

Bank Loan 8-year term at a rate of 5.25% equals a monthly loan payment of $10,159.

After business expenses and loan payments, a buyer with a 15% down payment of $183,450 would retain a profit of $136,984, which results in a 74% 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 $1,223,000 with the terms listed above, the coverage ratio is 1.78. 

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:

$1,223,000

$
%
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:
2016 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2016 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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