Return To Opportunities List

Opportunities

Indoor Inflatable Playground

CASH FLOW
$155,249

Specifications

  • Price
    $519,000

  • Revenue
    $662,310

  • Down Payment
    10%

  • Profit Margin
    23%

  • Equipment
    $125,000

  • Inventory
    $3,000

  • Location
    Great location in the Omaha area

  • Reason for Sale
    Divestment

  • Franchise

  • Lease
    12,000 sq. ft.: Bounce rooms, party rooms, storage, lobby, restrooms, office

  • Intangible Assets
    Recognizable name, great social media reviews, many loyal customers

  • Employees
    25: General Manager (1), PT Managers (5), Party Professionals (19)

 

This indoor inflatable business has a trained GM in place, so the owner is fairly hand-off.  Please note that the cash flow does reflect a new owner being owner-operator.  This is a huge 12,000 sq. ft. building with a lobby and two birthday/private party rooms.  75% of the current business does come from birthday parties.  Hours for this business vary from day-to-day depending on the number of birthday parties and group events reserved.  Many birthday parties are held each week as well as several group rentals with open bounce filling the remaining hours. 

 

This very clean and bright facility has many inflatables for bouncing, sliding, and playing.  The typical client base for this business is children under 13, but those of all ages can find lighthearted enjoyment playing in this inflatable playground.  Birthday parties are a great source of revenue and included with celebrations are party rooms, party professionals to guide the celebrations, and jump time.  Other group events include fundraisers, school parties, field trips, and other group festivities. 

 

This facility is meticulously maintained on a weekly basis, ensuring a clean place for children to play.  The staff is responsible, flexible, and excited to maintain a fun and safe environment.  The current owner is also a daily operator, but an additional manager can be hired to decrease on-sight hours, if desired. 

 

Business Highlights

  • Year Established: 2010
  • Location: Great location in the Omaha area
  • Clients: Children and teenagers
  • Services: Open bounce, birthday parties, group rentals, fundraisers
  • Building: 12,000 sq. ft.: Bounce rooms, party rooms, storage, lobby, restrooms, office
  • Reason for Selling: Divestment
  • Employees: 25: General Manager (1), PY Managers (5), Party Professionals (19)
  • Hours: Generally: 9-6: Hours vary by day and reservation
  • Seller Training Period: 90 days transition
  • Growth Opportunities: Add unique inflatables, add interactive inflatables, increase advertising with schools, increase social media content and interaction, increase fundraisers
  • Current Owner’s Responsibilities: Owner/operator: Currently works 8:30-4:30 Monday-Friday

Financial Highlights

  • List Price: $519,000
  • Gross Sales:
    • 2017: $662,310
    • 2016: $685,935
  • Cash Flow:
    • 2017: $155,249
    • 2016: $148,204
  • Assets Included in Purchase*
    • Equipment: $125,000: Inflatables, carpet cleaner, vacuum, computers, etc.
    • Inventory:  $3,000: party supplies
    • Intangible Assets: Recognizable name, great social media reviews, many loyal customers

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnNotes
20172016
GROSS SALES$662,310$685,935
Net Income Shown on Financial Statement$-4,832$10,546
ADDBACKS
Compensation to Owner$63,000$51,500
Other unrelated Salaries$20,137$1,110Position eliminated
11% Tax on total W2 Salaries$9,145$5,787
Depreciation$19,562$21,962
Interest$18,773$24,586
Meals & Entertainment$100$83
Amortization$29,364$29,364
Non-Business Telephone$0$0$130/month (starting in 2018)
Auto-Personal Use$0$3,266
TOTAL ADDBACKS$160,081$137,658
Seller's Cash Flow = Total Addbacks + Net Income$155,249$148,204
Profit Margin23.44 %21.61 %
  • 23% profit margin in 2017

Clients and Services

Clients:

  • Children
  • Tweens
  • Teenagers

Services:

  • Open bounce
  • Birthday parties
  • Group rentals
  • Fundraisers
  • Field trips

Employees

Employees 25:

  • General Manager (1)
  • PT Managers (5)
  • Party Professionals (19)

Growth Opportunities

  • Add unique inflatables 
  • Add interactive inflatables 
  • Increase advertising with schools 
  • Increase social media content and interaction 
  • Increase fundraisers 
  • Add camps

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 3.35.  With this information, the computation is as follows:

$155,249         x          3.35     =          $520,084

The fair market value found above positions the business list price at $519,000.

Funding Example

Purchase Price:                                $519,000

10%Buyer Down Payment:               $51,900

10%Seller Financing:                        $51,900

80%Bank Loan:                                $415,200

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $968.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $5,456.

After business expenses and loan payments, a buyer with a 10% down payment of $51,900 would retain a profit of $78,162, which results in a 150% 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 $519,000 with the terms listed above, the coverage ratio is 2.01. 

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. 

Purchase Price:

$519,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

Funding Details

Business:

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: $

Loan Payments

Monthly Payment to Bank: $
Yearly Payment to Bank: $
Monthly Payment to Seller: $
Yearly Payment to Seller: $
Total Monthly Debt Service: $
Total Yearly Debt Service: $

Conclusions

Fixed Charge Coverage Ratio

The bank will require a minimum ratio of 1.5 to be lendable.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017 Cash Flow
$
Annual Debt Service: -$
NOI:

Buyer's Return on Investment (ROI)

The rate of return on the Buyer's down payment.

Down Payment: $
NOI:
ROI: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
The top 5 questions to ask any potential broker:


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.