Indoor Inflatable Playground
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.
- 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
- 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: $3,000: party supplies
- Intangible Assets: Recognizable name, great social media reviews, many loyal customers
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$-4,832||$10,546|
|Compensation to Owner||$63,000||$51,500|
|Other unrelated Salaries||$20,137||$1,110||Position eliminated|
|11% Tax on total W2 Salaries||$9,145||$5,787|
|Meals & Entertainment||$100||$83|
|Non-Business Telephone||$0||$0||$130/month (starting in 2018)|
|Seller's Cash Flow = Total Addbacks + Net Income||$155,249||$148,204|
|Profit Margin||23.44 %||21.61 %|
- 23% profit margin in 2017
Clients and Services
- Open bounce
- Birthday parties
- Group rentals
- Field trips
- General Manager (1)
- PT Managers (5)
- Party Professionals (19)
- Add unique inflatables
- Add interactive inflatables
- Increase advertising with schools
- Increase social media content and interaction
- Increase fundraisers
- Add camps
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.
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.
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.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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Omaha, NE 68114
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