Consulting & Coaching for Leaderships Teams
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.
- 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.
- 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 - $113,815
- YOY Growth: 74% increase in sales between 2014 and 2016
- Profit Margin: 70%
- Assets Included in Purchase:
- Equipment: Office furniture, fixtures and equipment
- Intangible Assets: Proprietary software, client relationships, reputation
Cash Flow Analysis
|Description of Financial Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$-7,131||$20,484||$4,597|
|Compensation to Owner||$226,990||$210,000||$54,211|
|11% Tax on total W2 Salaries||$24,969||$23,100||$5,963|
|Interest||$0||$3,461||$7,602||Non-onward going expense|
|Rent||$21,600||$21,600||$25,200||Rent for owner's KC apartment - $2100/mo in 2014, $1800/month in 2015/2016|
|Employee Benefit Plan||$5,374||$3,579||$2,488||Owner's health insurance|
|Pension/Profit Sharing||$29,000||$29,000||$13,550||Owner's 401K|
|Travel||$10,348||$0||$0||Travel for owner when consulting from Hawaii|
|Seller's Cash Flow = Total Addbacks + Net Income||$313,612||$316,569||$113,815|
|Profit Margin||69.40 %||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
|Strategic Planning||Board Assessment & Development|
Leadership & Organizational Development
|High staff performance||High performing teams|
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 ||Healthcare |
|Education ||Social Services |
|Arts & Culture||Public Sector |
- 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
- 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
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.
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.
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.
2016 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2016 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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