Medical Transportation Non-Emergency Serving 8 Counties
Every non-emergency medical transportation driver is a 1099 contracted team member who utilize and maintain their own vehicles. The owner has an office manager for day-to-day operations and often works remotely. With 9 years of established operations in 8 counties, this company is poised for expansion in the central Missouri area.
Customers receive transportation to medical appointments and beneficial standing relationships with Missouri Medicaid and senior living facilities account for a majority of consumers. The 12 drivers average over 600 round trips per month.
Currently, the company contracts with 12 drivers who utilize their personal vehicles. There is one company-owned vehicle included in the sale that is currently leased to one contracted driver.
An area for potential growth is including the use of wheelchair accessible vehicles, either owned by the company or a contracted driver. Grants are available to those interested in purchasing accessible vehicles. Expansion areas include building relationships with additional care providers, the extension of services for everyday errands, shopping trips, or trips to the airport, as well as increasing the hours of operation.
- Years in Business: 9
- Location: Central Missouri – serving 8 counties
- Trips: 4th quarter of 2017 has averaged over 730 round trips
- Clients: Approved carrier/provider with Missouri Medicaid; a senior agency in several counties; low income clinics; established relationships with several nursing homes and assisted living centers, as well as other private contracts
- Employees: Office Manager (salaried), 1 Support Staff (salaried), 12 drivers (all 1099 contractors) using their own vehicles
- Office Hours: Mon – Fri 8am to 5pm
- Service Hours: 5am – 8pm
- Seller Training Period: 90 days, or negotiable
- Growth Opportunities: Add additional services (i.e., errands, appointments, shopping trips, etc.); wheelchair accessibility; expand service area and hours; develop more relationships with nursing homes and /senior living centers
- Current Owner’s Responsibilities: The seller depends on the office manager for day-to-day operations. She has oversight, but is mobile and can check in from anywhere, even the beach! Owner’s husband is currently the one paid support staff, helping in the office and driving as a backup driver as needed.
- List Price: $375,000
- 2017 Gross Sales: $646,598
- 2016 Gross Sales: $508,608
- 2015 Gross Sales: $439,716
- 2017 Cash Flow: $142,953
- 2016 Cash Flow: $93,053
- 22% Profit Margin
- Assets Included in Purchase: $11,400
- Equipment: Desktop computers & monitors, printer, new server and more
- Vehicles: 2009 Ford vehicle – currently leased to one of the drivers
- Intangible Assets: Word-of-mouth advertising, reputation
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement|
January - December
|Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$80,586||$44,927||$32,383||$37,939|
|Compensation to Owner||$37,750||$26,500||$14,200||$17,600|
|Tax on total W2 Salaries||$5,713||$2,915||$1,562||$1,936|
|Interest||$2,330||$1,956||$499||$0||Non-onward going expense|
|Non-Business Telephone||$2,800||$2,800||$2,800||$2,800||Personal expenses|
|Insurance Premiums for Owner||$7,850||$8,722||$8,722||$8,722||Health and life insurance premiums|
|Seller's Cash Flow = Total Addbacks + Net Income||$142,953||$93,053||$63,369||$69,022|
|Profit Margin||22.11 %||18.30 %||14.41 %||16.32 %|
- 22% profit margin in 2017
Non-emergency medical transportation (NEMT). Trips can be scheduled through health plans or privately.
- Doctor/dental appointments
- Sleep studies
- Trips can be scheduled through health plans or privately
- Chemotherapy & radiation
- Wound care
Dialysis, chemo and wound care customers are recurrent during a weekly period.
- Dialysis – 3 days/week
- Chemotherapy & radiation – up to 5 days/week
- Wound care – multiple/varying
While the majority of business is for NEMT services, the company does have a working relationship with a senior agency to provide transport services for daily living tasks. Currently across 5 counties, this company helps seniors with:
- Shopping trips
- Grocery stores, pharmacies and more
- Transportation to train or bus stations and airports
- Specialty trips
- Beauty/barber shop, bank, visits to hospitals or nursing homes and more
Customers not using transport services through a health plan may privately pay in advance or on the day of the trip.
- Office Manager
- Handles day-to-day office operations
- Dispatcher; manages daily office operations
- Support Staff (1)
- Assists Office Manager and General Manager with daily tasks
- Currently there are 12 drivers, all 1099 contractors
- Paid a flat rate per mile
- Drivers use their own vehicles for transportation
- Insurance coverage is through the company
- Several of the drivers have been with the company for 4+ years
Seller manages A/R, A/P, payroll, contracts, credentialing, insurance and hiring of employees/drivers.
- Add additional services
- A majority of clients are seeking transportation to and from medical appointments, but the availability of services to non-medical appointments is a great potential revenue stream
- Work with adults who have a disability
- Wheelchair accessibility
- Currently, none of the company or employee vehicles are wheelchair accessible
- Offering this capability would put the company on par with competitors that do have wheelchair accessibility
- Expand territory
- Currently serving 8 counties
- Growing into adjacent counties will increase visibility and profits
- A buyer would need to seek out drivers in these areas
- Expand hours
- Adding daily living services would call for extra hours in the evening or early morning
- Seek new contracts
- Multi-location clinics would be a good option to work with, and the company could become a preferred option for customers
- Developing relationships with more senior living facilities
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 2017 is $142,953 with a prescribed multiple of 2.63
With this information, the computation result follows:
$142,953 x 2.63 = $375,966
The List Price for the business is set at $375,000
Purchase Price: $375,000
10% Buyer Down Payment: $37,500
10% Seller Financing: $37,500
80% Bank Loan: $300,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $699.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $3,942.
After business expenses and annual loan payments, a buyer would retain a net operating income (profit) of $87,254. A 10% down payment of $37,500 results in a 233% 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 $375,000 with the terms listed above, the coverage ratio is 2.57.
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
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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.
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