Design Team of 28 with $3MM in Sales
This dynamic and comprehensive public relations firm has 28 employees and is currently operating in two locations (one in Bethesda and one in Baltimore)! With nearly $3MM earned in 2018, long-term clients return again and again contributing to the projected $2.6MM in current and upcoming work for 2019. Offering services from web design and social media campaigns to brand development and reputation management, the technologies needed to complete multi-media projects are in place. A new owner could seek to absorb the company, co-market services, or build on the momentum already established. One vice president who can assume many duties is currently in place and this individual would like to remain a part of them team, benefiting a buyer by maintaining institutional knowledge and experience.
Specializing in public relations with a mindful and journalistic approach, the team can tackle requests for crisis and media management as well as prudent company positioning for optimum messaging. Multi-media services such as podcasts, videos, blogs, editorial writing, graphic design, and brand development are carried out by a creative team that is well-educated and well-versed in current trends. Leadership development is a unique focus of this firm and includes thought leadership, social profile development for executives, content strategy development, speech writing, messaging coaching, analysis/reporting, and additional c-suite trainings.
With operations headquartered in Bethesda and a second location in Baltimore, team members often work remotely as well. All work is done in the Mid-Atlantic region, and day trips are the most frequent form of travel.
- Year Established: 2004
- Locations: Bethesda and Baltimore, Maryland
- Service Area: Mid-Atlantic area customers with a national audience
- Services: Media relations, web design, digital marketing, social media, digital and tangible creative design
- Clients: Health and Science, Education, Transportation, Government, and more!
- Spaces: Bethesda: 3,000 sq. ft.: Private offices, conference room, work room, kitchenette; Bethesda: currently utilizing a co-working space
- Reason for Selling: Seeking strategic partner
- Employees: 25: PT (5), FT (10), 1099 contractors (10): 1 GM oversees the creative staff
- Hours: M-F 9-5
- Seller Training Period: Owner would like to remain a part of the team and would available for continued counsel as needed
- Growth Opportunities: Increase Federal work; work with state, local, and municipalities more often; much room for growth with corporations and associations
- Current Owner’s Responsibilities: 50% Billable, 80% operations
- List Price: $1,190,000
- Gross Sales:
- 2018: $2,960,142
- 2017: $2,372,848
- 2016: $1,926,316
- Cash Flow:
- 2018: $385,090
- 2017: $315,995
- 2016: $228,271
- Assets Included in Purchase*
- Equipment: $30,000: Computers, digital video and photo recording equipment and remote gear, electronics, furniture, fixtures, equipment
- Pipeline and Current Work: $2.6MM
- A/R: $445,000 as of 9.2018
- Intangible Assets: Positive name recognition, extensive experience, reduceable overhead, great sales expertise, long-term clients, pricing options
*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||$260,310||$136,858||$43,371||$543,993|
|Compensation to Owner||$153,000||$199,500||$205,346||$207,692|
|Other unrelated Salaries||$0||$0||$0||$0|
|11% Tax on total W2 Salaries||$16,830||$21,945||$22,588||$22,846|
|Cell Phone||$2,950||$2,950||$2,950||$2,950||Personal Expense|
|Owner's Continuing Salary||$-48,000||$-48,000||$-48,000||$-48,000|
|Seller's Cash Flow = Total Addbacks + Net Income||$385,090||$315,995||$228,271||$736,808|
|Profit Margin||13.01 %||13.32 %||11.85 %||27.41 %|
- Cash flow accounts for $48,000 continuing part-time salary for the current owner to stay on.
- 2014-2015 peak pipeline of intense, project-based work for two large clients concluded.
- Health and Science
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Public relations consultancy
- Media relations
- Web design
- Digital marketing
- Social media
- Graphic design
- Video production
- Community engagement
- And more!
Total Employees 25:
- Managing Partner (1)*
- Vice President (1)
- Vice President (1)*
- Account Coordinator (1)
- Account Executive (1)
- Account Executive (1)*
- Operations (1 PT)
- Financial Manager (1 PT)
- Administrative (1 PT)
- Financial Consultant (1PT)
- Accounting (1PT)
- 1099 contractors
- Ad Buyer (1 PT)
- Creative Director (1)
- Graphic Designer (1)
- High-End Videographer (1)
- IT Support (1)
- Web Support (1)
- Ad Buyer (1 PT)
- Intern (2)
* Located in Baltimore
- Increase US Federal Government work
- Work with state, local, and municipal governments more often
- Much room for growth with corporations and associations
- Continue to build national association client base
- Divert additional resources to marketing and client acquisition
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 2018 cash flow was used with a prescribed multiple is 3.1. With this information, the computation is as follows:
$385,090 x 3.1 = $1,193,779
The fair market value found above positions the business list price at $1,190,000.
Purchase Price: $1,190,000
10% Buyer Down Payment: $119,000
20% Seller Financing: $238,000
70% Bank Loan: $833,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,778.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $10,947.
After business expenses and loan payments, a buyer with a 10% down payment of $119,000 would retain a profit of $208,392, which results in an 175% 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 $1,190,000 with the terms listed above, the coverage ratio is 2.18.
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.
2018 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2018 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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