Return To Opportunities List

Opportunities

Lincoln Sports Bar & Restaurant Earning 1M in Sales

CASH FLOW
$268,739

Specifications

  • Price
    $575,000

  • Revenue
    $1,071,508

  • Cash Flow
    $268,739

  • Profit Margin
    25%

  • Valuation
    $752,469

  • Lease
    $6,600

  • Reason for Sale
    Retirement

  • Location
    Lincoln, NE

  • Employees
    26

Located in a higher income neighborhood in Lincoln, this family fun sports bar is a popular lunch spot and sporting event hangout.  With sales consistently over $900,000, the current owner averages a 25% profit margin.  In operation for 12 years, the food and atmosphere of the bar has made it a local mainstay.  Its proximity to schools and local businesses draws a strong lunch crowd who enjoy the “Mom and Pop” food specials on the menu.

The casual dining feel is blended with an Alpine ski lodge look, with pine booths and a large wood and stone awning around the bar.  Beer drinkers are treated to 19 drafts on tap, and 50 kegs are always kept ready in the 40x10 walk-in cooler.  Seating for 150 is spread between bar stools, booths and tables, and the 5,000-sq. ft. building feels even more spacious with the high, open ceilings.

The current owner averages 20 hours/week managing 26 employees and helping out where needed.  There is a full-time manager in place who could easily handle these duties, but a part-time person would be needed to cover her days off.

Open 7 days a week, patrons have an extensive food and spirits menu to choose from, and are quick to utilize the 40x20 outdoor patio when the weather is nice.

A buyer paying 20% down ($115,000) would net $180,980 after debts the first year, representing a 157% return.  As the only bar in the neighborhood, a new owner could easily increase profits by capitalizing on nearby sporting event traffic.

Business Highlights

  • Years in Business: 12
  • Location and Service Area: Lincoln
  • Capacity: 150
  • Lease: $6,600/mo for 5,000 sq. ft. (includes CAM and a 40x20 outdoor patio)
  • Employees: 26 – 1 FT Manager, 7 Cooks (3FT, 4PT), 11 bartenders/waiters (4FT, 7 PT)
  • Hours: Mon – Sat 11am – 10pm, Sun 12pm – 9pm
  • Reason for Selling: Retirement
  • Growth Opportunities: Capitalize on nearby sporting event traffic
  • Current Owner’s Responsibilities: 20 hrs/week managing employees and helping out where needed

Financial Highlights

  • List Price: $575,000      * Business valued at over $750,000, but the price is reduced as the seller is anxious to retire!
  • 2016 Gross Sales: $1,071,508
  • 2016 Cash Flow: $268,739
  • YOY Growth: 12% increase in sales from 2014 to 2016
  • Profit Margin: 25%
  • Assets Included in Purchase: $100,000
    • Equipment – pizza ovens, fryers, grills, walk-in coolers and freezers
      • 40x10 walk-in cooler used to hold 50 kegs to supply the 19 beers on tap
    • Intangible Assets – premium location near higher income households, high schools and businesses; years of reputation and community standing

Cash Flow Analysis

Description of Financial StatementP&L StatementP&L StatementP&L StatementNotes
201620152014
GROSS SALES$1,071,508$946,092$937,376
Net Income Shown on Financial Statement$188,581$189,820$157,440
ADDBACKS
Compensation to Owner$65,000$47,500$50,000
11% Tax on Owner's W2 Salary$7,150$5,225$5,500
Auto-Personal Use$5,233$0$4,599Non-ongoing expense
Non-Business Telephone$2,775$2,775$2,775Personal cell phones: $232/mo
TOTAL ADDBACKS$80,158$55,500$62,874
Seller's Cash Flow = Total Addbacks + Net Income$268,739$245,320$220,314
Profit Margin25.07 %25.93 %23.50 %

 

  • 25% profit margin in 2016 with an 11.7% increase in gross sales from 2015 to 2016
  • Consistent gross sales in excess of $900,000 YOY

Special Features

  • Each booth is outfitted with a TV, but there are still many big screen TV’s throughout to the bar
  • Keno is offered with 2016 Keno commissions totaling $103,064
  • Over $7,000 in beer sales during one week, with Friday the biggest day
  • Total sales from Friday to Sunday are over $14,500

  

Weekly Sales Analysis

  • Liquor and food sales comprise 61% of income on Friday, 63% on Saturday, and 66% on Sunday.
  • Friday sees the largest beer sales of the week, while Saturday sees the biggest food sales

Menu

  • Starters
    • Cheese fries, boneless wings, nachos, French fries, fried green beans, onion chips and more
  • Salads
    • Grilled chicken, shrimp, taco, chef, southwestern, and side
  • Burgers
    • Special burger, mushroom swiss, open-flame, patty melt, mini burgers
  • Pizzas
    • 7” personal pizza, 14” large, supreme
  • Sandwiches
    • Philly, prime rib, club, BLT and more

Daily dinner specials range from hot beef sandwiches with domestic beer to prime rib with 16oz shakers.  On tap are 19 draft beers, and a regular stock of 50 kegs are kept in a walk-in cooler measuring 40x10.

 

Employees

26 employees including:

1 FT Manager – handles daily operations and management of employees when owner is not around
Currently the owner works 20 hours/week, with most of these hours worked during the FT manager’s day off
A new owner could be an absentee-owner and hire a part-time manager to cover the current manager’s duties on days off

7 cooks (3 FT, 4 PT)

11 bartenders/waiters (4 FT, 7 PT)


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          Multiplier          =          Price

Cash Flow is the sum of net income plus any owner perks and non-onward going expenses.

Multiplier is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).

The Cash Flow for 2016 is $268,739, and the prescribed Multiplier is 2.8.

$268,739         x          2.8       =          $752,469

The List Price for the business is set at $575,000 to accommodate the seller’s eager desire to retire within the next six months.

Funding Example

Purchase Price:                             $575,000

20%Buyer Down Payment:             $115,000

30%Seller Financing:                      $172,500

50%Bank Loan:                                $287,500

Seller financing 5-year term at a rate of 4.5% equals a monthly loan payment of $3,216.

Bank loan 7-year term at a rate of 5.25% equals a monthly loan payment of $4,097.

After business expenses and annual loan payments of $87,759, a buyer would retain a profit of $180,980.  A 20% down payment of $115,000 results in a 157% return on investment during 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 $575,000 with the terms outlined above, the coverage ratio if 3.06.  Please note that the decision 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:

$575,000

$
%
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:
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

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.