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Opportunities

Pet Boarding Serving Philly Metro

CASH FLOW
$136,927

Specifications

  • Price
    $419,000

  • Revenue
    $780,512

  • Inventory
    $5,000

  • Location
    Outside of Philadelphia

  • Reason for Sale
    Retirement

  • Equipment
    $32,000

  • Lease
    4,000 sq. ft building; 450 sq. ft office, 450 sq. ft apartment for senior staff (providing 24-hour animal coverage) **Building could be purchased separately through Seller’s counsel for $250,000

  • Employees
    9 FT Employees; 4PT Employees; can pick up to 22 temporary employees seasonally.

  • Intangible Assets
    Long standing reputation, social media presence, extensive client reviews.

Providing the ability to house 114 pets since 1990 this overnight pet care business is fully equipped with over $200k in Assets. The business has $150,000 in buildout completed with a 4,000 sq. ft building; 450 sq. ft office, 450 sq. ft apartment for senior staff (providing 24-hour animal coverage). By offering a spectrum of options and ensuring each animal is cared for the way their owner would, this business has maintained an immaculate reputation. They also offer a shuttle service to and from their location for overnight stays. Owners can choose exactly what they need for their pet’s stay, including medication and above average needs.

This facility has an extremely dedicated staff in place to take care the 4,000 active clients and 8,000 clients on the books. Departments include customer care, pet care, pet stylists and bathers, and pet chauffeurs. There is an on-site apartment housing a senior staff member to ensure the pets are cared for 24 hours a day. With no advertising in place, word of mouth and recommendations from local veterinarians keep people coming back. The building is perfect for furry friends- featuring ample outdoor space including small pools and room to run.

With pet transportation already in place, expanding this service to include homecare for sick animals would be an excellent growth opportunity. Adding behavior and training courses would also be a great way to showcase the facility to owners while they learn new skills with their pet.

Business Highlights

  • Year Established: 1990
  • Location: Outside Philadelphia
  • Service Area: Philadelphia Metro & Southern New Jersey
  • Capacity: Up to 114 animals; 80 indoor/outdoor accommodations, 12 cat condos, 12 indoor holding stalls, 10 outdoor overflow stalls.
  • Services: 80% Dog boarding, 20% Grooming, 5% Retail/transportation
  • Building: 4,000 sq. ft building; 450 sq. ft office, 450 sq. ft apartment for senior staff (providing 24-hour animal coverage) [Building can be purchased through Seller’s Counsel separately for $250,000 if desired]
  • Reason for Selling: Retirement
  • Employees: 9 FT Employees; 4PT Employees; can pick up to 22 temporary employees seasonally.
  • Hours: 9AM-6PM 7 days a week (24-hour animal care)
  • Seller Training Period: 90 days
  • Growth Opportunities: Daycare

Financial Highlights

  • List Price: $419,000
  • Gross Sales:
    • 2017: $780,512
    • 2016: $778,404
    • 2015: $782,896
  • Cash Flow:
    • 2017: $136,927
    • 2016: $125,453
    • 2015: $158,908
  • Assets Included in Purchase*
  • Equipment: $20,000 Office equipment; $20,000 Grooming/bathing tools and dryers
  • Vehicle: $12,000 Van with vinyl-wrapped graphics
  • Build-out: $150,000 custom built dog accommodations; $3,000 storage sheds (2)
  • Inventory: $5,000 pet supplies
  • Intangible Assets: Long standing reputation, social media presence, extensive client reviews.

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnNotes
201720162015
GROSS SALES$780,512$778,404$782,896
Net Income Shown on Financial Statement$-3,770$-10,109$6,564
ADDBACKS
Compensation to Owner$104,000$104,000$104,000
Other unrelated Salaries$0$0$0
Tax on W2 Salaries$8,497$11,440$11,440
Depreciation$24,411$15,913$16,806
Interest$360$232$13,456
Amortization$0$0$2,576
Dental Insurance$965$927$869Owner's personal dental insurance
Life Insurance$3,277$3,277$3,277Owner's personal life insurance
Health Insurance$0$0$1,304Owner's personal health insurance
Non-Business Telephone$1,284$1,284$1,284$107/month for personal lines
Auto-Personal Use$2,352$2,352$2,352$196/month for personal vehicle
Simple IRA$3,120$3,120$3,120Company match for owner's IRA
Rent$-8,140$-8,140$-8,140Rent would be $8,140/year onward going
Meals & Entertainment$571$1,157$0Personal Expense
TOTAL ADDBACKS$140,697$135,562$152,344
Seller's Cash Flow = Total Addbacks + Net Income$136,927$125,453$158,908
Profit Margin17.54 %16.12 %20.30 %
  • Profit Margin: 18%

Services

  • Dog and Cat Boarding (80%)
  • Grooming and Bathing (20%)
  • Retail and Transportation (5%)

Employees

  • FT Senior Staff Member
    • Lives in on-site apartment and provides overnight animal care

 

  • 9 FT Employees
    • Customer Care Supervisor
    • Senior Pet Care Technician
    • Pet Care Supervisor
    • Pet Stylist
    • Pet Stylist and Bather
    • Pet Chauffeur
    • Pet Care Technicians (3-5)

 

  • 4 PT Employees
    • Assist with customer care, pet care, and bathing as needed.

 

  • 20+ temporary employees available seasonally or when needed

Growth Opportunities

  • Expand transportation services
    • Offer in home care for sick animals or those that require unique attention
  • Offer obedience and training classes
  • Advertise
    • Currently no campaigns in place, recommendations from veterinarians and happy customers bring repeat business

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

$136,927         x          3.06     =          $418,997

The fair market value found above positions the business list price at $419,000.

Funding Example

Purchase Price:                       $419,000

15% Buyer Down Payment:     $62,850

15% Seller Financing:               $62,850

70% Bank Loan:                      $293,300

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,172.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $3,854.

After business expenses and loan payments, a buyer with a 15% down payment of $62,850 would retain a profit of $76,614, which results in a 122% 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 $419,000 with the terms listed above, the coverage ratio is 2.27. 

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. 

 

Purchase Price:

$419,000

$
%
OR
$
%
OR
$
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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