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Lighting Distribution with Layout Design



  • Price

  • Revenue

  • Equipment

  • Account Receivable

  • Location
    Ohio and Indiana with local and national customers

  • Service Area
    Local and national customers

  • Intangible Assets
    Positive name recognition, diverse client base, good staff tenure, room for growth

  • Employees
    11: Office Manager (2), Office Administrator (1), Sales (6), PT delivery drivers (2)

  • Reason for Sale

Double location with $2MM in sales, this lighting distribution, retrofitting, and design are top services for this growing lighting company. Working with commercial, industrial, and manufacturing clients, this business brings quality customer service and effective lighting solutions to the forefront.  The company is also fully staffed with 11 employees.  There are 2 office managers, an office administrator, 6 total sales people, and 2 delivery drivers.  The owner currently acts in an oversight capacity.  There is plenty of space to be utilized here – one location has 5,500 sq. ft. and the second has 11,000 sq. ft.  

With a specialization in retrofitting old fixtures with new, energy efficient illumination, this company helps its customers reduce expenses, improve brightness, and decrease energy use.  This company can also guide a customer through their many options and help layout and design lighting systems that best address a customer’s needs.  Operating as an ESCO business, this company is well-positioned to work with green customers looking to be mindful of their energy use.  

This lighting company maintains two business locations, each with plenty of private offices and ample warehouse space.  This company could be condensed, if desired, to reduce expenses.  The merger would reduce the overhead significantly, yet a buyer could easily maintain sales staff in the area without a physical location.  Solid management is in place, employees are well-trained, and many have good tenure with this company. 

Business Highlights

  • Year Established:   2004
  • Location and Service Area:   Ohio and Indiana with local and national customers
  • Clients: Commercial, industrial, and manufacturing clients large to small
  • Services: Distribution, retrofits, lighting design
  • Lease: Location 1: 5,500 sq. ft. with 1,500sq. ft.  office space, remaining is warehouse (rack and open); Location 2: 11,000 sq. ft. with 1,500 sq. ft. office space, remaining is warehouse (rack and open)
  • Reason for Selling:  Divestment
  • Employees: 11: Office Manager (2), Office Administrator (1), Sales (6), PT delivery drivers (2)
  • Hours: M-F 8-5
  • Seller Training Period: 6  months 
  • Growth Opportunities: Increase online sales and interface, bring labor in-house, increase small clients
  • Current Owner’s Responsibilities: Oversight

Financial Highlights

  • List Price: $1,375,000
  • Gross Sales:
    • 2018: $2,082,315
    • 2017: $2,135,934
    • 2016: $1,778,161
    • 2015: $1,753,418
  • Cash Flow:
    • 2018: $333,404
    • 2017: $379,486
    • 2016: $297,671
    • 2015: $255,385
  • Assets Included in Purchase*
    • Equipment: $350,000: forklift, tools, etc.
    • Vehicles:  $25,000: 3 vehicles
    • A/R: $200,000
    • Secured Work:  $400,000
    • Intangible Assets: Positive name recognition, diverse client base, good staff tenure, room for growth

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
December - November
Tax Return
December - November
Tax Return
December - November
Tax Return
December - November
GROSS SALES$2,082,315$2,135,934$1,778,161$1,753,418
Net Income Shown on Financial Statement$21,533$-31,133$-107,043$-201,931
Compensation to Owner$90,108$81,195$80,404$150,669
11% Tax on total W2 Salaries$6,229$8,931$8,844$16,574
Internet$3,236$1,800$1,800$1,800Personal expense
Non-Business Telephone$0$4,405$5,103$4,253
Health Insurance$0$0$20,000$18,000Personal expense, on wife's plan in FY 2016
Meals & Entertainment & Travel$0$1,481$5,852$8,82275% is for personal expense
Auto-Personal Use$2,918$3,000$3,000$3,000Personal expense
Reimbursement$0$55$55$912Non-onward going espense
Vacation$0$0$5,000$0Personal expense
Columbus Office$3,931$0$0$0Columbus office expense - current owner recommends closing
TOTAL ADDBACKS$311,871$410,619$404,714$457,316
Seller's Cash Flow = Total Addbacks + Net Income$333,404$379,486$297,671$255,385
Profit Margin16.01 %17.77 %16.74 %14.56 %


Typical Clients

  • Commercial 
  • Industrial 
  • Manufacturing 
  • Churches 
  • Small Business 
  • Large to small clients 
  • Well-diversified client base

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.


  • Lighting distribution 
  • Lighting retrofits 
  • Lighting design 
  • Energy consultation


Location 1:

  • Office Manager (1)
  • Office Administrator (1)
  • Sales (4)
  • PT Delivery Driver (2)

Location 2:

  • Sales (2)
  • Office Manager/Marketing (1)

Growth Opportunities

  • Increase online sales and interface 
  • Bring labor in-house 
  • Increase number of small-business clients 
  • Increase sales in other parts of the country 
  • Increase capital to order larger inventory to reduce costs

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 2-year average cash flow was used with a prescribed multiple is 3.86.  With this information, the computation is as follows:

$356,445         x          3.86     =          $1,375,878

The fair market value found above positions the business list price at $1,375,000.

Funding Example

Purchase Price:                             $1,375,000

15% Buyer Down Payment:             $206,250

15% Seller Financing:                      $206,250

70% Bank Loan:                                $962,500

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $3,845.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $12,649.

After business expenses and loan payments, a buyer with a 15% down payment of $206,250 would retain a profit of $181,561, which results in an 88% 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 $1,375,000 with the terms listed above, the coverage ratio is 1.92. 

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:



Bank Loan Needed: $


Funding Details


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: $


Fixed Charge Coverage Ratio

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

Cash Flow:
2-Year Average Cash Flow
Annual Debt Service: $

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2-Year Average Cash Flow
Annual Debt Service: -$

Buyer's Return on Investment (ROI)

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

Down Payment: $
ROI: %


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

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