Opportunities
Flower Delivery in Denver
Sold
In business since 1948!
Specifications
In business since 1948, this Denver floral shop serves the entire Denver metropolitan area. Sales break down is 10% weddings, 20% funerals and 70% other sales, including FTD and Teleflora orders. The shop also carries a selection of vases, greeting cards, containers, balloons, and other related items.
There are 10-15 employees on the payroll during normal times, using an average of 5-8 on a normal day; 3-4 FT designers, 3-4 PT designers, 3 FT drivers, 2-3 PT drivers, 1-3 PT sales/computer entry/general floral helpers. Additional 1099 drivers are used during the busier holiday seasons. Several of the floral designers have been with the business for 7 years or more. The current owner is looking to retire, and focuses her time on employee management, ordering and delivery routing.
Sales have consistently been over $800K for the past 4 years, with a 13% profit margin for 2017. Assets included in the purchase are five delivery vans, work tables, displays, furniture, computers and inventory.
Growth opportunities include increased marketing and social media presence, relationships with wedding vendors and funeral homes and participating in local/neighborhood events. The shop is located on a busy street, but increasing neighborhood visibility may increase an already steady stream of business.
Business Highlights
- Year Established: 1948; current owner 35 years
- Location: Denver
- Service & Delivery Area: Denver Metropolitan Area
- Sales Breakdown: 10% weddings, 20% funerals, 70% other sales (which includes FTD and Teleflora)
- Lease: 2,500 sq. ft. for $4,500/mo.
- Reason for Selling: Retirement
- Employees: 10-15 employees on the payroll during normal times, using an average of 5-8 on a normal day; 3-4 FT designers, 3-4 PT designers, 3 FT drivers, 2-3 PT drivers, 1-3 PT sales/computer entry/general floral helpers. Additional 1099 drivers are used during the busier holiday seasons
- Seller Training Period: 90 Days
- Growth Opportunities: Increased marketing & social media presence; participate in local/neighborhood events; relationships with wedding vendors and funeral homes
- Current Owner’s Responsibilities: Employee management, ordering, delivery routing
Financials
- List Price: $240,000
- Gross Sales:
- 2017: $881,912
- 2016: $848,483
- Cash Flow:
- 2017: $111,036
- 2016: $86,507
- Assets Included in Purchase*
- Furniture $ Equipment: $93,528
- 5 Delivery Vans: $30,800
- Intangible Assets: Website, reputation from 70 years in business
- A/R: $112,017
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2017 | 2016 | 2015 | 2014 | ||
| GROSS SALES | $881,912 | $848,483 | $907,749 | $803,266 | |
| Net Income Shown on Financial Statement | $112,038 | $87,601 | $102,102 | $84,428 | |
| ADDBACKS | |||||
| Compensation to Owner | $19,200 | $19,200 | $19,200 | $19,269 | |
| 11% Tax on total W2 Salaries | $2,112 | $2,112 | $2,112 | $2,120 | |
| Depreciation | $4,836 | $3,281 | $633 | $0 | Non-cash item |
| Insurance Premiums for Owners: Health, Life, Auto | $3,600 | $3,600 | $3,300 | $3,000 | |
| Meals & Entertainment | $0 | $48 | $64 | $0 | Owner personal expense |
| Rent | $-29,900 | $-29,335 | $-30,000 | $-29,000 | Rent would be $4,500/mo ongoing |
| TOTAL ADDBACKS | $-152 | $-1,094 | $-4,691 | $-4,611 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $111,886 | $86,507 | $97,411 | $79,817 | |
| Profit Margin | 12.68 % | 10.20 % | 10.73 % | 9.94 % |
- 13% profit margin
- Sales of over $800K for the past 4 years
Employees
10-15 employees on the payroll during normal times, using an average of 5-8 on a normal day
- 3-4 FT floral designers
- 3-4 PT designers
- 3 FT drivers
- 2-3 PT drivers
- 4 PT delivery drivers
- 1-3 PT sales/ computer entry/ general floral helpers
Growth Opportunities
- Increased marketing and social media presence
- Participate in more local/neighborhood events
- Relationships with wedding vendors and funeral homes
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 2.17. With this information, the computation is as follows:
$111,886 x 2.17 = $240,948
The Fair Market Value found above positions the business List Price at $240,000.
Funding Example
Purchase Price: $240,000
10% Buyer Down Payment: $24,000
10% Seller Financing: $24,000
80% Bank Loan: $192,000
Seller Financing 5-year term at a rate of 5% equals a monthly loan payment of $453.
Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $2,805.
After business expenses and loan payments, a buyer with a 10% down payment of $24,000 would retain a profit of $71,943, which results in a 300% 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 $240,000 with the terms listed above, the coverage ratio is 2.84.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857