Marketing & Media with a Virtual Office
As the PR industry is changing, this adaptable company has embraced creative approaches for their clients including script writing, building relationships with web development companies to create an online presence, digital marketing, and writing award applications for executives and their companies.
The team of 10 professionals work remotely from across the state, making this business easily relocatable. Utilizing cloud-based project management and time tracking systems to manage projects seamlessly, employees can easily communicate with their co-workers and the owner can oversee projects with ease from start to finish. Bringing on additional part-time employees could expand this firm’s capacity and additional growth can potentially be found in increasing social media management services as well as capitalizing on content development for websites.
- Year Established: 1999
- Location: Detroit, Michigan area home office - relocatable
- Service Area: Michigan (80%), National (20%)
- Services: Marketing, media relations, and writing
- Clients: Small to mid-sized businesses from diverse industries: Restaurants, hospitality, multi-family housing, incentive marketing, security services
- Building: Home office, easily relocatable
- Reason for Selling: Owner portfolio diversification
- Employees: 10: Graphic Designer (1), Consultants (4), Marketing (1), Writer (1), Public Relations (1), Administrations (1), Bookkeeper (1)
- Hours: M-F 9:00-5:30
- Seller Training Period: 6-9 Months to ensure client transition
- Growth Opportunities: Expand the strategic relationship with a web development company, market 3 new service offering packages, continue expanding media and digital marketing services, online reputation management
- Current Owner’s Responsibilities: Oversight
- List Price: $360,000
- Gross Sales:
- 2018: $262,836
- 2017: $255,709
- 2016: $206,719
- 2015: $220,112
- Cash Flow:
- 2018: $135,728
- 2017: $134,518
- 2016: $89,851
- 2015: $88,968
- Assets Included in Purchase*
- Intangible Assets: Excellent client retention, positive word-of-mouth referrals, effective marketing techniques, flexible and responsive team
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$75,129||$75,552||$32,126||$33,653|
|Compensation to Owner||$34,300||$34,300||$34,300||$32,300|
|Other unrelated Salaries||$0||$0||$0||$0|
|11% Tax on total W2 Salaries||$3,773||$3,773||$3,773||$3,553|
|Meals & Entertainment||$2,365||$1,658||$1,453||$1,646|
|Line Item 17||$8,000||$8,000||$8,000||$8,000||To Owner|
|Line Item 18||$1,441||$1,724||$336||$0||To Owner|
|Auto Fleet Card||$4,200||$4,200||$4,200||$4,200||$350/month|
|Seller's Cash Flow = Total Addbacks + Net Income||$135,728||$134,518||$89,851||$88,968|
|Profit Margin||51.64 %||52.61 %||43.47 %||40.42 %|
- Profit margin 2018: 52%!
- Small to mid-sized businesses from diverse industries
- Multi-family housing
- Incentive marketing
- Security services
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Social media management
- Graphic design
- Digital marketing
- Communications training
- Script writing
- Award applications
- Content development
- Web sites
- Direct marketing
- Crisis communications management
- Project management
- Event planning
- And more!
Total Employees: 10
All employees are part-time
- Graphic Designer (1)
- Consultants (4)
- Marketing (1)
- Writer (1)
- Public Relations (1)
- Administrations (1)
- Bookkeeper (1)
- Expand the strategic relationship with a web development company
- Market 3 new service offering packages
- Continue expanding social media and digital marketing services
- Online reputation management
- Increase the team to increase capacity
- If relocating, add to the client base from the new headquarters location
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 2018 cash flow was used with a prescribed multiple is 2.7. With this information, the computation is as follows:
$135,728 x 2.7 = $366,465
The fair market value found above positions the business list price at $360,000.
Purchase Price: $360,000
15%Buyer Down Payment: $54,000
25%Seller Financing: $90,000
60%Bank Loan: $216,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,678.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $2,839.
After business expenses and loan payments, a buyer with a 15% down payment of $54,000 would retain a profit of $81,531, which results in a 151% 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 $360,000 with the terms listed above, the coverage ratio is 2.5.
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.
2018 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2018 Cash Flow
|Annual Debt Service:||-$|
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: