Contract Screen Printer Including Licensed Merchandise Clients
- Year Established: 1987
- Location: Arizona with local and national clientele
- Services: Wholesale imprinting of textiles, including licensed merchandise
- Building: 3,200 sq. ft.: Office (30%), Warehouse (70%)
- Reason for Selling: New ventures
- Employees: 11 FT: General manager (1), Office Manager (1), Artist (1), Shipping Clerk (1), Press Operators (3), QA Technicians (1), PT Bookkeeper (1), General Labor (2)
- Seller Training Period: 90 days transition
- Growth Opportunities: Expand client base, expand into new markets, targeted advertising
- Current Owner’s Responsibilities: Day-to-day oversight, owner does not print
- List Price: $1,129,000
- Gross Sales:
- 2017: $971,021
- 2016: $883,222
- 2015: $791,366
- 2014: $642,677
- Cash Flow:
- 2017: $268,801
- 2016: $169,109
- 2015: $85,810
- 2014: $83,654
- Assets Included in Purchase*
- Equipment: Printing presses, dryers
- Inventory: Ink
- A/R: $30,000 with 15-day turnaround, as of 5.18
- Intangible Assets: Long-term relationships with clients, knowledgeable staff, confidentiality
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$93,467||$55,625||$6,436||$40,196|
|Compensation to Owner||$84,000||$41,000||$0||$0|
|Tax on total W2 Salaries||$14,335||$4,510||$0||$0|
|Non-Business Telephone||$3,120||$3,120||$3,120||$3,120||$260/month for personal lines|
|Insurance Premiums for Owners: Health||$4,320||$4,320||$4,320||$4,320||Personal expense|
|Auto-Personal Use||$14,161||$985||$1,726||$1,050||10% is personal|
|Gifts||$7,895||$5,634||$5,838||$8,652||Non-onward going expense|
|Dump Trailer||$7,990||$0||$0||$0||Personal expense|
|Seller's Cash Flow = Total Addbacks + Net Income||$268,801||$169,109||$85,810||$83,654|
|Profit Margin||27.68 %||19.15 %||10.84 %||13.02 %|
- 50% growth since 2014!
- Ad specialty businesses
- Promotional products distributors
- Smaller screen printers
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Contracted screen printing
- Wholesale clients
- Licensed merchandise printing
- Art services to prepare for printing
- Printing on any type of textile item
- And many more items!
- Printing in any color
- Custom color mixing
- Plastinol-based inks
- Pantone matching system
- Specialty inks
- Printing on textiles
- 100% cotton
- 50/50 poly blends
- 9 FTE
- General manager (1)
- Office Manager (1)
- Artist (1)
- Shipping Clerk (1)
- Press Operators (3)
- QA Technicians (1)
- General Labor (2)
- 1 PTE
- PT Bookkeeper (1)
- Expand client base
- Expand into new markets
- Targeted advertising to other ad specialty businesses
- Attend additional trade shows/workshops
- Move to a larger location to accommodate additional employees and equipment
- Add equipment to increase production
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 4.25. With this information, the computation is as follows:
$268,801 x 4.25 = $1,129,922
The Fair Market Value found above positions the business List Price at $1,129,000.
Purchase Price: $1,129,000
12.5% Buyer Down Payment: $141,125
12.5% Seller Financing: $141,125
75% Bank Loan: $846,750
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $2,631.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $11,128.
After business expenses and loan payments, a buyer with a 12.5% down payment of $141,125 would retain a profit of $103,699, which results in a 73% 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 $1,129,000 with the terms listed above, the coverage ratio is 1.63.
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.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
This folder is empty.
Access to this Deal Room is restricted
Would you like to access the deal room?Yes, please
Already have an account? Log in here.
Print, sign and send to:210 N 78th St. 2nd Floor
Omaha, NE 68114
Or fax to: