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Online Support and Hosting Company

CASH FLOW
$74,751

Specifications

  • Price
    $206,000

  • Revenue
    $98,367

  • Cash Flow
    $74,751

  • Location
    Remote

  • Reason for Sale
    Family Health

  • Profit Margin
    76%

  • Service Area
    100% Virtual - Can work for clients anywhere!

  • Intangible Assets
    35-year reputation, ongoing exclusive contract with client (servers are leased), seven-character .com domain name.

  • Employees
    Owner/Operator

Providing website, technical documentation and consulting support for a well-respected B2B client, this online firm is completely virtual! With over 32 years of continuous work for the same client, this company is poised for growth!

The last few years have shown a dramatic increase in net revenue as the Seller has moved to a virtual office space which allows the incoming buyer to acquire and run this company from anywhere, worldwide. The client’s site is hosted on a shared server in Atlanta, while this could easily be moved to a new location or integrated with the Buyer’s existing hosting for other clients.

The profit margin for this company is an impressive 76% due to its service-based nature. The business also comes with hard-copy licenses for the Adobe and Microsoft Suites, and the incoming buyer will also inherit the company’s seven-character .com domain name.

A buyer with a down payment of $51,500 would recoup 91.24% of his or her initial investment in the first year of business, achieving a net operating income of $46,987.

Business Highlights

  • Years in Business: 35
  • Location and Service Area: 100% Virtual
  • Services: Website, technical documents, consulting
  • Lease: No lease; virtual company
  • Reason for Selling: Family Health
  • Hours: As needed
  • Seller Training Period: 90 days
  • Growth Opportunities: Expand clientele – exclusive access to 100+ companies in client’s industry
  • Current Owner’s Responsibilities: Owner/Operator

Financial Highlights

List Price $206,000

Gross Sales:

  • 2018: $117,656 Annualized
  • 2017: $98,367
  • 2016: $88,544
  • 2015: $80,191

Cash Flow:

  • 2017: $74,751
  • 2016: $49,501
  • 2015: $47,980

Assets Included in Purchase*

  • Equipment/Software: Adobe & Microsoft Suites
  • Intangible Assets: 35-year reputation, ongoing exclusive contract with client (servers are leased), seven-character .com domain name.

*amounts may vary


Cash Flow Analysis

Description of Financial StatementP&L Statement
January - August
Tax ReturnTax ReturnTax ReturnNotes
2018201720162015
GROSS SALES$78,437$98,367$88,544$80,191
Annualized$117,656
Net Income Shown on Financial Statement$0$74,312$48,693$47,287
ADDBACKS
Depreciation$0$7$10$15
Meals & Entertainment$0$432$798$678
TOTAL ADDBACKS$0$439$808$693
Seller's Cash Flow = Total Addbacks + Net Income$0$74,751$49,501$47,980
Annualized$0
Profit Margin0.00 %75.99 %55.90 %59.82 %
  • 2017 profit margin: 76%!

Typical Clients and Services

Clients:

  • One large client – B2B Company with access to over 100+ other businesses

 

Services:

  • Website Development
  • Technical Documents
  • Standard Consulting

 

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


Employees

  • All work is currently performed by the Seller, but could easily be outsourced to the buyer’s choice of subcontractor

Growth Opportunities

  • Expand Clientele
  • Work with existing client to provide services to 100+ businesses in their portfolio

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

$74,751           x          2.75     =          $205,565

The fair market value found above positions the business list price at $206,000.

Purchase Price:

$206,000

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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.