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Opportunities

Corporate Mine Safety Instruction

CASH FLOW
$99,233

Specifications

  • Price
    $345,000

  • Revenue
    $286,764

  • Intangible Assets
    Long-standing community business, positive reputation, comprehensive approach, family atmosphere, returning clients

  • Employees
    4: Owner-Operators (2), Part-time Instructors (2)

  • Profit Margin
    35%

  • Down Payment
    10%

This is a growing and dynamic miner safety business for sale.  Located near leading gold mining companies in a leading gold mining state, this operation has the best interests of their customers at heart.   Providing comprehensive services for miners gives this business an advantage over their very few competitors.  With the addition of staff, the growth potential for this business is great. 

 

Services include surface and underground miner safety classes, respirator and spirometer fit testing, audiometric testing, as well as first aid and CPR instruction.  Mine related services account for 90% of overall income. With a focus on ease, convenience, and miner needs, 75% of business is from returning loyal customers. 

 

Classes are offered in 12 hour shifts to accommodate the typical mining schedule.  Around 40% of students have testing done while in class.  This company also accommodates group instruction and testing by contract with large mining corporations.  

 

Instructors of the mine safety classes must be a current or former miner.  The current owners are also sole operators, with the exception of 2 part-time staff brought on for large contract work.  The owners’ responsibilities can be assumed by a qualified teaching candidate and an administrative hire.   Owner 1 is an instructor and owner 2 handles all administrative tasks as well as industrial hygiene testing.    All curriculum is in place for the new buyer.

Business Highlights

  • Year Established:  1996
  • Location and Service Area: In a leading gold mining state serving local and international clients
  • Clients:  Miners, those working on mining sites, mining companies
  • Services:  New miner training, OSHA classes, industrial hygiene testing (spirometer and respirator)
  • Building:  3,800 sq. ft.
  • Reason for Selling:  Focus on family
  • Employees:  4: Owners (2) are operators, but all duties can be taken over by additional qualified staff, 2 part-time teachers for large contract work
  • Seller Training Period: 90 days transition
  • Growth Opportunities:  Add staff to increase capacity, increase hours of operation, expand OSHA classes, expand safety consulting services, seek out additional annual contracts from local large mines
  • Current Owner’s Responsibilities:  Owners are operators, but all duties can be taken over by additional qualified staff

Financial Highlights

  • List Price: $345,000
  • Gross Sales:
    • 2017: $286,764
    • 2016: $215,849
    • 2015: $226,149
    • 2014: $171,438
  • Cash Flow:
    • 2017: $99,233
    • 2016: $71,741
    • 2015: $97,561
    • 2014: $61,148
  • Assets Included in Purchase*
    • Intangible Assets: Long-standing community business, positive reputation, comprehensive approach, family atmosphere, returning clients

*amounts may vary

Cash Flow

Description of Financial StatementTax ReturnTax ReturnTax ReturnTax ReturnNotes
2017201620152014
GROSS SALES$286,764$215,849$226,149$171,438
Net Income Shown on Financial Statement$21,485$26,025$18,709$-5,480
ADDBACKS
Compensation to Owner$24,000$31,200$31,200$31,200Owner 1
11% Tax on total W2 Salaries$2,640$3,432$3,432$3,432
Interest$34,294$0$11,669$17,864
Depreciation$10,035$7,919$27,560$11,146
Meals & Entertainment$1,931$1,996$1,670$700
Contributions/Donations$0$0$873$0
Travel$3,167$320$2,142$2,28640% personal
Auto-Personal Use$1,681$849$306$010% personal
TOTAL ADDBACKS$77,748$45,716$78,852$66,628
Seller's Cash Flow = Total Addbacks + Net Income$99,233$71,741$97,561$61,148
Profit Margin34.60 %33.24 %43.14 %35.67 %
Profit Margin is 36%

Clients

  • Individual miners
  • Those that work on mining sites
  • Drillers that work on mine
  • Mining corporations

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

Services

  • New miner surface training
  • New miner underground training
  • Surface and underground refresher courses
  • OSHA courses
  • Respirator fit testing
  • Spirometer fir testing
  • Audiometric fit testing
  • CPR/First Aid/AED

Employees

  • Owners are operators
  • Owner 1: Miner class instructor
  • Owner 2: Administrative duties and testing 
  • Part-time employees (2)
    • These individuals are brought on as instructors for large contracted instruction and testing work

Growth Opportunities

  • Add staff to increase capacity 
  • Increase hours of operation 
  • Expand OSHA classes 
  • Expand safety consulting services 
  • Seek out additional annual contracts from local large mines

 

There is ample customer demand for services.  This company could experience significant growth if additional staff were hired and services were expanded.  This can be done in the current facility without additional modifications. 

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 3.35.  With this information, the computation is as follows:

$99,233           x          3.48     =          $345,331

The Fair Market Value found above positions the business List Price at $345,000.

Funding Example

Purchase Price:                       $345,000

10% Buyer Down Payment:     $34,500

10% Seller Financing:               $34,500

80% Bank Loan:                      $276,000

Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $643.

Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $4,032.

After business expenses and loan payments, a buyer with a 10% down payment of $34,500 would retain a profit of $43,131, which results in a 125% 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 $345,000 with the terms listed above, the coverage ratio is 1.77. 

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:

$345,000

$
%
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:
2017 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 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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