Marketing & Brand Development for Specialty Food & Beverages
Specializing in the food and beverage marketing industry, this company offers 9 full service options for clients including print, packaging, branding, web & digital design, content marketing, video, trade shows, vendor coordinating and custom packaging design. This four-people design shop has established not only local clientele, but regional and national clients as well.
They have made a name for themselves by offering topnotch products and services. With four work stations in a 900 square foot open layout, the overhead for this business is quite low for this small yet efficient staff.
The business operates with Adobe Creative Suite and the project management system Team Work. All work stations are equipped with dual monitors and Mac Systems. The business is fully equipped with photography, videography, and lighting equipment allowing every job to be completed with ease.
A buyer is able to invest 20% down and have a return of $47,223 in year one after all debt is paid. That is an ROI of 160%.
- Year Established: 2012
- Location: Vermont
- Clients: 20% Regionally, 20% Locally, and 60% Nationally.
- Client Type: All clients are within the food & beverage industry
- Services: Packaging, Print, Branding, Web & Digital Design, Content Marketing, Video, Tradeshows, Vendor Coordinating, and Custom Packaging Design
- Lease: 3-year lease (in year 1) at $800/month for 900 square/feet within a historical building offering 3 rooms and an open layout
- Reason for Selling: Family
- Employees: 4: 1 full-time designer & illustrator, 1 part-time web programmer & designer, and 1-2 interns assisting with all facets of the business
- Seller Training Period: 90 Days
- Current Owner's Responsibilities: Project Manager
- List Price: $148,000
- Gross Sales:
- 2017: $223,794
- 2016: $279,254
- Cash Flow:
- 2017: $74,324
- Assets Included in Purchase*
- Equipment: $10,500 – 4 Work Stations complete with Mac Systems, Photography Equipment, Videography Equipment, Lighting Equipment, Scanner & Copier
- Intangible Assets: Long standing clients both locally & nationally, reputation that strives above their competitors, and a niche industry space for clients served
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$8,939||$-4,529|
|Compensation to Owner||$50,786||$48,857|
|11% Tax on total W2 Salaries||$5,586||$5,374|
|Meals & Entertainment||$1,067||$1,947|
|Profit Sharing||$2,225||$2,108||To Owner|
|Seller's Cash Flow = Total Addbacks + Net Income||$74,324||$61,282|
|Profit Margin||33.21 %||21.94 %|
- 2017 profit margin: 33%!
Typical Clients and Services
This design firm serves all types of clients within the food & beverage industry.
- Web & Digital Design
- Content Marketing
- Vendor Coordinating
- Custom Packaging Design
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Full-time designer & illustrator (1)
- Part-time web programmer & designer (1)
- Interns assisting with all facets of the business (1-2)
- All employees work at the office except one remote PT employee
- Increase video production project revenue – advertisements, stop-motion animation, and long-form features
- Specialty food businesses need unique designs to help them stand out. This company has extensive experience in designing food packaging, advertising, and more.
- Expand with the plant-based food market – This company has been approached by several plant-based food companies to complete work in this area.
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:
$74,324 x 2 = $148,648
The fair market value found above positions the business list price at $148,000.
Purchase Price: $148,000
20%Buyer Down Payment: $29,600
30%Seller Financing: $44,400
50%Bank Loan: $74,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $828.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $1,431.
After business expenses and loan payments, a buyer with a 20% down payment of $29,600 would retain a profit of $47,223, which results in a 160% 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 $148,000 with the terms listed above, the coverage ratio is 2.74.
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|
This folder is empty.
Access to this Deal Room is restricted
Would you like to access the deal room?Yes, please
Already have an account? Log in here.
Print, sign and send to:210 N 78th St. 2nd Floor
Omaha, NE 68114
Or fax to: