Opportunities
Men’s Fashion Retailer with Absent Owner
Sold
Prime Old Market location with plenty of foot traffic!
Specifications
Profitable since it opened, this store is located in a prime 1,800 square foot location in the Old Market area of Omaha. Catering to the needs of fashion conscious men, this business offers business attire, casualwear, and accessories. The average sale is over $100 with clientele age ranges from 30-55 years. This business also customizes ensembles for business and special event travelers, corporate events, and performs wardrobe consultations.
Currently run mostly absentee, this business could recover more profit with a full-time customer-oriented owner. A new owner will inherit a clear marketing strategy with a high-level inventory and financial management strategy intact. Having just recently been offered a dream job, the current owner is willing to assist with transition as much or as little as needed.
A new owner working only 10 hours per week and placing 20% down payment will see a profit of $24,942 in the first year.
Business Highlights
- Year Established: 2012
- Location: Omaha, NE
- Service Area: Omaha, NE
- Clients: Age 30-55 years Avg. sale is $105
- Services: walk in retail, clothing concierge, corporate branding
- Building: 1,800 Sq. ft, plus free basement with bathroom, storage, and back office
- Reason for Selling: Career opportunities
- Employees: 1 FT, 2 PT
- Seller Training Period: 90 days/flexible as needed
- Growth Opportunities: hotel concierge service, grow brand presence, increase average sales transaction, cater to local market more, cater to VIP customers to create more recurring revenue
- Current Owner’s Responsibilities: Absentee
Financial Highlights
- List Price: $126,000
- Gross Sales:
- 2018: $277,759
- 2017: $387,905
- 2016: $323,832
- 2015: $402,798
- Cash Flow:
- 2018: $42,502
- 2017: $50,963
- 2016: $78,329
- 2015: $67,389
- Assets Included in Purchase*
- Equipment: $30,000
- Inventory: $58,430
- Intangible Assets: 800 loyal customers in database, prime location in high traffic area, full web presence.
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2018 | 2017 | 2016 | 2015 | ||
| GROSS SALES | $277,759 | $387,905 | $323,832 | $402,798 | |
| Net Income Shown on Financial Statement | $-12,621 | $44,118 | $40,155 | $47,284 | |
| ADDBACKS | |||||
| Compensation to Owner | $24,000 | $0 | $28,750 | $0 | |
| 11% Tax on total W2 Salaries | $2,640 | $0 | $3,163 | $0 | |
| Interest | $4,253 | $3,820 | $3,836 | $3,367 | |
| Meals & Entertainment | $4,916 | $2,016 | $2,425 | $1,920 | |
| Depreciation | $0 | $1,009 | $0 | $14,818 | |
| Janitorial | $2,445 | $0 | $0 | $0 | Non Onward Going |
| Professional Fees | $16,869 | $0 | $0 | $0 | Non Onward Going |
| TOTAL ADDBACKS | $55,123 | $6,845 | $38,174 | $20,105 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $42,502 | $50,963 | $78,329 | $67,389 | |
| Profit Margin | 15.30 % | 13.14 % | 24.19 % | 16.73 % |
- Profit Margin: 18% (3-year average)
Typical Clients
- Males – age 30-55 years
Services
- Retail
- Business attire
- Casualwear
- Accessories
- Guest Concierge
- Delivery within a 5-mile radius
- Group Sales
- Wardrobe Consultations
- Corporate Branding & Gifts
Employees
- 1 FT Sales Associate
- 2 PT Sales Associates
Growth Opportunities
- Expand concierge service
- Advertise with local hotels
- Grow brand presence
- Increase average sales transaction
- Cater to VIP customers to create more reoccurring revenue
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 2018 cash flow was used with a prescribed multiple is 3. With this information, the computation is as follows:
$42,502 x 3 = $127,506
The fair market value found above positions the business list price at $126,000.
Funding Example
Purchase Price: $126,000
20%Buyer Down Payment: $25,200
20%Seller Financing: $25,200
60%Bank Loan: $75,600
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $470.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $993.
After business expenses and loan payments, a buyer with a 20% down payment of $25,200 would retain a profit of $24,942, which results in a 99% 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 $126,000 with the terms listed above, the coverage ratio is 2.42.
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.
Attachments
- Business Summary
- Identifies important business information in an organized, quick-reference format
- Cash Flow Analysis
- The owner’s profit is the sum of business net income, any owner’s perks, & any non-onward going expenses (cash flow)
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857