Opportunities
Healthcare Focused Interpretation
Sold
Steady growth since 2013!
Specifications
This dynamic and expanding company provides services for clients in different industries throughout the Midwest. Most services are scheduled in advance during normal business hours, but there is 24/7 availability if needed. The interpretation services can be provided at client location or via phone. A growth opportunity would be adding more interpreters in TN, AL, GA, FL, MN, and many other States throughout the Midwest and other States, client transportation services to and from the location (for example, transporting client to the doctor’s office). The current Owner is exploring this opportunity.
With no official office of its own, this business is run remotely with automated appointment and billing management driven by a custom software program. The current owner is responsible for oversight and does not perform any interpreting work. With the automated system, administrative work is minimal and can be handled by one person. There is a pool of 300 service providers (paid via 1099) but the network can support up to 1,000+.
Clients are billed for a minimum 2 hours of service. Invoices are sent every 2 weeks on NET 15 payment terms. Prices for contracted clients are based on a negotiated book rate and after a certain number of appointments that rate can be renegotiated.
Interpretation services are in high demand, and with a 99.5% service completion rate, this business has been keeping pace since 2013. A 10% down payment of $49,000 returns $51,291 in the first year after debt payments!
Business Highlights
- Year Established: 2013
- Service Area: Predominantly Midwest based clients but not limited to nationwide
- Clients: 149 total clients of which 50 are repeat
- Services: Interpretation and translation (interpretation is about 85% of work); can support most languages; 99.5% completed service success rate
- Reason for Selling: New business opportunities
- Employees: 300 interpreters (paid via 1099)
- Seller Training Period: 90 days
- Growth Opportunities: Add transportation to services and more interpreters in other States.
- Current Owner’s Responsibilities: Management – Owner does not perform interpreting work
Financial Highlights
- List Price: $480,000
- Gross Sales:
- 2018: $681,639 Annualized
- 2017: $418,471
- Cash Flow:
- 2018: $228,639 Annualized
- 2017: $130,972
- Assets Included in Purchase*
- A/R: Invoices sent every 2 weeks on NET 15 payment
- Intangible Assets: Website, computer software, established client contracts
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-Nov | P&L Statement | P&L Statement | P&L Statement | P&L Statement | Notes |
| 2018 | 2017 | 2016 | 2015 | 2014 | ||
| GROSS SALES | $624,836 | $418,471 | $222,828 | $88,107 | $26,091 | |
| Annualized | $681,639 | |||||
| Net Income Shown on Financial Statement | $171,422 | $71,026 | $45,293 | $13,026 | $309 | |
| ADDBACKS | ||||||
| Compensation to Owner | $25,000 | $45,000 | $24,000 | $12,000 | $8,000 | |
| 11% Tax on total W2 Salaries | $2,750 | $4,950 | $2,640 | $1,320 | $880 | |
| Non-Business Telephone | $1,700 | $650 | $450 | $200 | $200 | Personal expense |
| Insurance Premiums for Owners: Health, Life, Auto | $650 | $346 | $346 | $0 | $0 | Personal expense |
| Rent | $6,000 | $6,500 | $2,400 | $2,400 | $1,200 | Paid to Owner |
| Website Maintenance | $1,500 | $2,500 | $500 | $250 | $250 | Paid to Owner |
| TOTAL ADDBACKS | $37,600 | $59,946 | $30,336 | $16,170 | $10,530 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $209,022 | $130,972 | $75,629 | $29,196 | $10,839 | |
| Annualized | $209,022 | |||||
| Profit Margin | 33.45 % | 31.30 % | 33.94 % | 33.14 % | 41.54 % |
- 85% growth since 2015!
- Office is home based, so rent is paid to the business owner.
Typical Clients
There are 149 current clients, of which approximately 50 are repeat. One client makes up 70% of income. Typical clients include
- Government offices
- Hospitals and health care providers
- Law firms
- Schools
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
95% of services provided are interpretation based. Languages supported include:
- Spanish
- Somalia
- Vietnamese
- Chinese
- Tagalog
- Korean
- French
- German
- Russian
- Arabic
- Japanese
- Hindi
- Polish
- Italian
- Portuguese
- Laotian
- Hmong
- Thai
- African languages
Services are confidential and compliant with existing NDAs, HIPPA or other applicable regulations.
Employees
There are 300 interpreters/translators paid via 1099 (no W2). The network has a capacity of 1,000.
Growth Opportunities
- Business does not currently provide client transportation to services. Adding this could increase revenues.
- Increase number of contracts
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 3.66. With this information, the computation is as follows:
$130,972 x 3.66 = $479,358
The fair market value found above positions the business list price at $480,000.
Funding Example
Purchase Price: $480,000
15%Buyer Down Payment: $72,000
35%Seller Financing: $168,000
50%Bank Loan: $240,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,132.
Bank loan 7-year term at a rate of 6% equals a monthly loan payment of $3,506.
After business expenses and loan payments, a buyer with a 15% down payment of $72,000 would retain a profit of $51,315 which results in a 71% 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 $480,000 with the terms listed above, the coverage ratio is 1.64.
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.
Attachments
- Business Summary
- Identifies important business information in an organized, quick-reference format
- Cash Flow Analysis
- The owner’s profit is the sum of business net income, any owner’s perks, & any non-onward going expenses (cash flow)
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857