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Opportunities

Los Angeles County Relocation & Storage

CASH FLOW
$177,405

Specifications

  • Price
    $175,000

  • Revenue
    $1,795,813

  • Equipment
    $250,000

  • Location
    Los Angeles, CA area

  • Service Area
    Local, statewide, and national

  • Reason for Sale
    Retirement planning

  • Valuation
    $354,210

  • Lease
    22,000 total sq. ft - standalone building with fenced area. 1,976 sq. ft office space, 3 dock doors, 24’ clear height, ESFR sprinkler system, 60 rack spaces, 144 vaults, 26 smart move containers.

  • Intangible Assets
    Long-term client relationships, diversified service list, fully immersed in the industry by offering both storage and transport to clients from all sectors

This absentee-owned company offers a full spectrum of relocation services. Transportation at any distance paired with an array of unique storage solutions has ensured loyal customers for over 30 years. This business comes well equipped with a day cab tractor, 3 straight trucks, 3 trailers, 2 forklifts, and 2 flatbeds along with specialized gear to facilitate expert transition services. Working with both residential and commercial clients, office relocation is an area of specialty for this company. From large hotels to fine art galleries, this company can move and store items for a renovation, relocation, or new construction project.

 

This business is one of only a few approved providers of moving services for Active Duty service members and federal employees. For those being deployed or relocated, this company is at the front of the line to garner that business and facilitate base to base or overseas transitions. The standalone 22,000 sq. ft. building with fenced area includes 60 rack spaces, 26 smart move containers, and 144 storage vaults. Three large dock doors are both grade and dock high with 24’ clear height to facilitate efficient operations.

 

Increased marketing for storage services would be a great way to grow this business. Along with developing relationships with relocation companies and realtors to increase national exposure. The absentee owner is ready for retirement and has priced this company well below market value to expedite that goal.

Business Highlights

  • Established: 30+ years
  • Location: Los Angeles, CA area
  • Service Area: Local, statewide, and national
  • Clients: Corporations, military, national accounts, those moving independently
  • Services: Moving, packing, crating, shipment tracking, and storage (short or long-term)
  • Lease: 22,000 total sq. ft - standalone building with fenced area. 1,976 sq. ft office space, 3 dock doors, 24’ clear height, ESFR sprinkler system, 60 rack spaces, 144 vaults, 26 smart move containers.
  • Reason for Selling: Retirement planning
  • Hours: M-F 7-5
  • Seller Training Period: 90 days transition
  • Growth Opportunities: Expand marketing for office storage and moving, build relationships with relocation companies
  • Current Owner’s Responsibilities: Absentee Owned

Business Highlights

  • List Price: $175,000
  • Gross Sales:
    • 2017: $1,795,813
    • 2016: $1,783,520
    • 2015: $1,137,417
  • Cash Flow:
    • 2017: $177,405
  • Assets Included in Purchase*
    • Equipment: Moving; 4 wheel dollies, 2 wheel hand trucks, e-carts, 3 panel carts, 10 speed packs, 4 pallet jacks, approx. 600 furniture pads, 1 kickback cart. Office; full suite of office furniture, copy machine, IT equipment, laptops, iPads, and telephones.
    • Vehicles: Day cab tractor, 3 straight trucks, 3 trailers, 2 flatbeds, 2 forklifts
    • Intangible Assets: Long-term client relationships, diversified service list, fully immersed in the industry by offering both storage and transport to clients from all sectors

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnNotes
201720162015
GROSS SALES$1,795,813$1,783,520$1,137,417
Annualized
Net Income Shown on Financial Statement$-87,528$-195,106$68,345
ADDBACKS
Depreciation$1,089$1,815$5,675
Interest$0$675$4,025
Management Fees$263,210$180,921$106,827
Meals & Entertainment$34$262$1,565
Amortization$600$600$600
TOTAL ADDBACKS$264,933$184,273$118,692
Seller's Cash Flow = Total Addbacks + Net Income$177,405$-10,833$187,037
Annualized
Profit Margin9.88 %-0.61 %16.44 %
 

Typical Clients

  • Military
  • Corporations
  • National accounts
  • Independent residential

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

Services

  • Moving
  • Packing
  • Crating
  • Shipment tracking
  • Storage
    • Long-term
    • Short-term

Growth Opportunites

  • Expand marketing of storage services
  • Build relationships with those in similar industries
    • Relocation companies
    • Realtors

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

$177,405         x          2          =          $354,810

The fair market value found above positions the recommended business list price at $355,000.

«  The owner of this business is motivated to sell; this is a FIRE SALE with the business list price of $175,000.

Funding Example

Purchase Price:                       $175,000

10%  Buyer Down Payment:     $17,500

10%  Seller Financing:               $17,500

80%  Bank Loan:                      $140,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $326.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $1,840.

After business expenses and loan payments, a buyer with a 10% down payment of $17,500 would retain a profit of $151,412, which results in a 865% 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 $175,000 with the terms listed above, the coverage ratio is 6.83. 

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. 

 

**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.**

Purchase Price:

$175,000

$
%
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: %

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210 N 78th St. 2nd Floor
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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.