Opportunities
Estate & Probate Firm - Holding 750 Wills
Sold
Supporting Local Clientele, Perfect for an Attorney Who Wants to be Owner-Operator
Specifications
Serving East-Central Nebraska for over 100 years, this owner-operator attorney firm assists clients in a number of different aspects. Services include estate planning/probate, business formation and corporate representation, court-appointed criminal work, real estate, and private civil litigation, with each of these representing roughly 20% of the firm’s income.
The firm does very little family law, which is an opportunity for growth and expansion, as both family law, tax advising and bankruptcy is largely referred out to other firms.
All the business is local and survives based on the local community’s endeavor to support an attorney practice. With no competition to speak of, this firm will continue to thrive under a new owner’s wing.
The ideal buyer for this business would be a practicing attorney or an investor who has an attorney in their network who could work onsite to take over the existing caseload (20-25 open files) as well as the future probate work to come from the 750 wills held in the repository.
Because the seller will remain in town under a new role, the transition period for this acquisition opportunity is incredibly flexible and will be tailored to the incoming Buyer’s situation.
Business Highlights
- Year Established: 1896; current owner since 2013
- Location: Outside of Grand Island, Nebraska
- Number of Clients: 20-25 open files; 750 wills in repository
- Services: Estate Planning/Probate, Business Formation and Corporate Representation, Court-Appointed Criminal Work, Real Estate, and Private Civil Litigation
- Reason for Selling: Seller accepted a prestigious local position
- Employees: 1 PT assistant
- Seller Training Period: Flexible; as needed for client continuity
- Growth Opportunities: Family Law and Bankruptcy; these are currently referred out
- Current Owner’s Responsibilities: Owner is sole attorney at the practice
Financial Highlights
- List Price: $142,000
- Gross Sales:
- 2017: $310,368
- 2016: $321,476
- Cash Flow:
- 2017: $183,121*
- 2016: $124,041
*This business could be owned by an existing attorney with the Cash Flow listed above. An absentee owner could profit $103,121 after paying a new attorney’s salary of $80,000.
- Assets Included in Purchase*
- Intangible Assets: Existing website, history since 1896, relationships with local community
- Will Repository: Holding 750 wills; excellent source of probate work
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | P&L Statement | Notes |
| 2017 | 2016 | ||
| GROSS SALES | $310,368 | $321,476 | |
| Net Income Shown on Financial Statement | $55,633 | $-21,668 | |
| ADDBACKS | |||
| Contributions/Donations | $1,500 | $0 | |
| Depreciation | $144 | $240 | |
| Interest | $714 | $369 | |
| Meals & Entertainment | $30 | $0 | |
| Distribution | $42,200 | $59,500 | |
| Owner's Salary | $80,800 | $82,000 | |
| Medical Reimbursements | $2,100 | $3,600 | |
| Replacement | $-80,000 | $-80,000 | Replacement Lawyer |
| TOTAL ADDBACKS | $47,488 | $65,709 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $103,121 | $44,041 | |
| Profit Margin | 33.23 % | 13.69 % |
Typical Clients
- Farmers
- Local Businesses
- Towns and Villages
- Court-Appointed Criminal Work
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Each of the following make up approximately 20% of the firm’s work:
- Estate Planning/Probate
- Business Formation and Corporate Representation
- Court-Appointed Criminal Work
- Real Estate
- Private Civil Litigation
Employees
- This practice has operated with one part-time assistant who will be relocating in the Fall of 2018, so an incoming attorney would have an opportunity to hire their own.
Growth Opportunities
- The following are areas in which the current attorney does not practice, and refers this type of work out to attorneys in nearby communities:
- Family Law (divorce, adoption)
- Tax Advisement
- Bankruptcy
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 0.78. With this information, the computation is as follows:
$183,121 x 0.78 = $142,834
The Fair Market Value found above positions the business List Price at $142,000.
Funding Example
Purchase Price: $142,000
25%Buyer Down Payment: $35,500
25%Seller Financing: $35,500
50%Bank Loan: $71,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $662.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $933.
After business expenses and loan payments, a buyer with a 25% down payment of $35,500 would retain a profit of $83,983, which results in a 237% 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 $142,000 with the terms listed above, the coverage ratio is 5.39.
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.
**The Firm Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.**
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857