IT Staffing and Placement with H1B
Contracted placements are typically over one year or longer and clients often request 5-10 placements at a time. Employees relocate to the business location and fully integrate into the technology team on site. This business also works with H1B visa recipients to place highly-trained individuals into U.S. companies. Enticing employees to temporary contracted positions, this business offers health, dental, vision, and life insurance benefits.
Operating from a building that is available for continued lease, it may also potentially be available for sale outside the sale of the business. The current owner is fully involved in the day-to-day operations, but the company runs well without daily oversight.
- Year Established: 2012
- Location: Central Illinois
- Service Area: Employing individuals in 24 states
- Clients: Private and public sectors: Retail, healthcare, government, hospitality, and much more!
- Services: Long-term IT staffing
- Building: 2,600 sq. ft.: Private offices (3), conference room, kitchen, server room, oversized cubes (13); the building is available for continued lease or potentially for sale outside the sale of the business
- Reason for Selling: The business is successful, and the owner would like to shift gears
- Employees: Sales (3), Recruiters (6), HR (1), Bookkeeping (2), Networking (1 PT)
- Hours: M-F 8-5
- Seller Training Period: 6 months
- Growth Opportunities: Increase recruiting efforts, build placement contracts, increase service area
- Current Owner’s Responsibilities: Oversight
- List Price: $11,300,000
- Gross Sales:
- 2018: $31,006,044
- 2017: $23,169,790
- 2016: $23,518,850
- 2015: $15,409,854
- Cash Flow:
- 2018: 2,507,436
- 2017: $2,237,664
- 2016: $1,219,566
- Assets Included in Purchase*
- Intangible Assets: Wide service area, few competitors in the area, long-term client relationships, excellent network for finding talent
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||P&L Statement||P&L Statement||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$2,248,282||$1,929,296||$1,062,696||$2,227,105|
|Compensation to Owner||$100,000||$100,003||$67,502||$0||Owner|
|Other unrelated Salaries||$90,003||$90,003||$41,250||$0||Owner's wife|
|11% Tax on total W2 Salaries||$20,901||$20,901||$11,963||$0|
|Meals & Entertainment||$0||$0||$1,300||$1,196|
|Seller's Cash Flow = Total Addbacks + Net Income||$2,507,433||$2,237,664||$1,219,566||$2,278,818|
|Profit Margin||8.09 %||9.66 %||5.19 %||14.79 %|
- Continued sales growth year over year!
Typical Clients and Services
- Private and public sectors
- Health care
- Long-term IT staffing
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Sales (3)
- Recruiters (6)
- HR (1)
- Bookkeeping (2)
- Networking (1 PT)
- Educated professionals
- Recent graduates
- H1B visa holders
- Increase recruiting efforts
- Build placement contacts
- Increase service area
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 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, 2018 cash flow was used with a prescribed multiple is 4.5. With this information, the computation is as follows:
$2,507,436 x 4.5 = $11,283,462
The fair market value found above positions the business list price at $11,300,000.
15%Buyer Down Payment: $1,695,000
15%Seller Financing: $1,695,000
70%Bank Loan: $7,910,000
Seller financing 7-year term at a rate of 4.50% equals a monthly loan payment of $23,561.
Bank loan 10-year term at a rate of 5.50% equals a monthly loan payment of $85,844.
After business expenses and loan payments, a buyer with a 15% down payment of $1,695,000 would retain a profit of $1,356,695 which results in a 80.04% return on investment in the first year.
A lender is required to have a minimum 2.03 coverage ratio for any business loans extended. At a proposed purchase price of $11,300,000 with the terms listed above, the coverage ratio is 2.03.
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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