Opportunities
Profitable Senior Daily Living Care in Eastern Tennessee
Sold
Specifications
Providing homemaking, personal, daily living help, and companionship, this Eastern Tennessee business has 65 employees that serve seniors wishing to stay in their homes. Established in 2008, this company has an A+ rating with the BBB and a growing client list. A General Manager, Schedule Coordinator, and Office Assistants make up the office staff, while a Licensed Practical Nurse and 60 Caregivers work with clients on a daily basis. The owner is responsible for payroll and billing, as well as maintaining compliance with contracts and handling client concerns. No medical training is required to run the business, as the focus is on daily assistance and not medical care.
Services provided include homemaking, respite care, personal care and attendant care. Caregivers help seniors with grooming needs, errands, house cleaning and also provide companionship. Over 50% of services are attendant care, which consists mostly of aiding in personal hygiene, ambulation, meal preparation and eating. The remaining services are less time intensive as the clients are more independent and require less assistance. Its location in Eastern Tennessee makes for a terrific client base, with the service area covering Washington, Carter, Green, Sullivan, and Unicoi Counties, with a combined population of 500,000.
Sales have been consistently near or over $1,000,000 for the past 4 years. A 25% profit margin yielded an average profit of $283,993 for the owner over the last two years, with 2016 earning $302,854 alone.
Business Highlights
- Year Established: 2008
- Location: Eastern Tennessee
- Service Area: Washington, Carter, Green, Sullivan, and Unicoi Counties including the Tri-Cities (Kingsport, Johnson City and Bristol)
- Service Breakdown: Homemaking: 20%; Respite Care: 5%; Personal Care: 20%; Attendant Care: 55%
- Lease: 2,660 sq. ft. at $1,050/month
- Reason for Selling: Health concerns
- Employees
- General Manager: Oversee daily operations
- Scheduling Coordinator: Schedule caregivers with clients
- Licensed Practical Nurse: Visit client homes every 30 days, oversee quality of care
- Office Assistants: Answer phone calls, client paperwork
- Caregivers: 40 PT, 20 FT - provide homemaking, personal, daily living, and temporary caregiving
- Growth Opportunities: Establish relations with insurance companies to secure additional clients
- Current Owner’s Responsibilities: Payroll, billing, attend insurance meetings, keeping contracts in compliance, dealing with staff and client concerns
Financial Highlights
- List Price: $980,000
- 2016 Gross Sales: $1,183,489
- 2015 Gross Sales: $1,130,973
- 2-Year Average Cash Flow of $283,993
- Consistent Sales of $1,000,000
- A/R of $32,974 as of December 2016
- $25,000 worth of assets included in the purchase
- 5 desks, office chairs, 3 Dell computers, 2 Net Book laptops, Galaxy Tablet, Cisco router, phones, scrubs and other medical supplies, office equipment
*amounts may vary
A Brief Overview
“Non-medical in-home care is a service that helps those in need by assisting with daily living activities in order to continue living life from the comfort of one’s own home
We are a company dedicated to providing in-home care for seniors who are living independently in their own homes. The safety and happiness of elderly loved ones is our top priority. Our caregivers provide compassionate and meaningful care to each and every senior they interact with, recognizing that all people are different and require different care.
What makes us stand out is the quality of care that we provide to our clients, and being helpful to their family members. We go beyond our duties to help the clients and their families’ needs.”
Cash Flow Analysis
| Description of Financial Statement | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2016 | 2015 | 2014 | 2013 | ||
| GROSS SALES | $1,183,489 | $1,130,973 | $999,980 | $1,004,521 | |
| % Change Over Prev. Year | 4.64 % | 13.10 % | -0.45 % | ||
| Net Income Shown on Financial Statement | $-14,950 | $34,901 | $-27,634 | $23,876 | |
| ADDBACKS | |||||
| Compensation to Owner | $202,500 | $217,200 | $182,300 | $186,914 | |
| 6% Tax on Owner Wages | $12,150 | $13,032 | $10,938 | $11,214 | |
| Interest | $13,754 | $0 | $0 | $0 | |
| Owner's Comp - 1099 | $89,400 | $0 | $0 | $0 | 1099 Expense |
| TOTAL ADDBACKS | $317,804 | $230,232 | $193,238 | $198,128 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $302,854 | $265,133 | $165,604 | $222,004 | |
| Profit Margin | 25.59 % | 23.44 % | 16.56 % | 22.10 % |
- Consistent gross sales of $1M+
- Cash Flow increased 12% from 2015 to 2016
Services
Staff recruit and manage qualified assistants to make life easier and more enjoyable by helping with daily living and providing companionship. Services include:
- Homemaker Care
- General housecleaning activities and chores
- Sweeping, mopping, dusting, vacuuming
- Laundry, changing bed linens
- Meal preparation or education
- Grocery shopping, errand running
- General housecleaning activities and chores
- Personal Care
- Direct assistance with activities
- Using the toilet
- Bathing, dressing
- Personal hygiene
- Meal preparation and eating
- Accompaniment to appointments
- Direct assistance with activities
- Attendant Care
- Assistance with daily living activities
- Using the toilet
- Bathing, dressing
- Personal hygiene, grooming
- Ambulation
- Meal preparation and eating
- General housekeeping and errand running
- Assistance with daily living activities
- Respite Care
- Assistance to client when family caregivers are absent or when caregivers need relief from routine caregiving responsibilities
- General housekeeping/cleaning
- Bathing, using the toilet
- Dressing
- Meal preparation
- Ambulation
- Assistance to client when family caregivers are absent or when caregivers need relief from routine caregiving responsibilities
Services Breakdown
The state of Tennessee regulates the charge rates. Below is a breakdown of each service’s percentage of sales and the rate that Tennessee pays for each service.
- Attendant Care – 55%
- $20.32/hour ($5.08 per every 15 minutes)
- Homemaking Services – 20%
- $20.32/hour ($5.08 per every 15 minutes)
- Personal Care – 20%
- $20.32/hour ($5.08 per every 15 minutes)
- Respite Care – 5%
- $16.12/hour ($4.03 per every 15 minutes)
A/R - December 2016 (with Managed Care Organizations)
All bills are due in early January 2017, with total outstanding of $32,974.
- UnitedHealth Care
- $15,302
- Amerigroup
- $3,593
- Blue Cross/Blue Shield of Tennessee
Employees
- Caregivers – 60 (40 PT, 20 FT)
- Provide homemaker services, personal care, attendant care and in-home respite care
- Licensed Practical Nurse
- Performs home visits every 30 days, as well as surprise visits and phone visits as needed
- Oversee caregivers and ensure client safety and happiness with services
- Reporting of changes in client health or needs
- Scheduling Coordinator
- Recruit staff and find replacement staff
- Creating schedules
- Accepts clients from MCOs (managed care organizations)
- General Manager
- Handles billing
- Acceptance and admission of new clients
- Payroll monitoring and employment verifications
- Front Office Assistant
- General office filing and paperwork
- Answer phones and clean office
- Back Office Assistant
- Maintain employee files
- Organize authorization packets
Growth Opportunities
- Growth is unlimited with an aging population
- Insurance companies are always coming out with new ways to extend the business and services to the clients
- New clients are referred all the time and as fast as the insurance companies can get them signed up and processed
- Strengthen relationships with insurance companies to continue to secure clients
- Current owner attends insurance meetings and maintains existing relationships
- Expand business into Central and Western Tennessee
- Knoxville is under 2 hours away from business’ location and has a population of around 200,000
- Virginia and North Carolina borders are very close
- Expand into rural areas of Virginia and North Carolina with seniors needing non-medical care
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:
2 Year 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.
With this information, the computation is as follows:
$283,993 x 3.5 = $993,975
The Fair Market Value found above positions the business List Price at $980,000.
Funding Example
Purchase Price: $980,000
10%Buyer Down Payment: $98,000
10%Seller Financing: $98,000
80%Bank Loan: $784,000
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,827
Bank Loan 7-year term at a rate of 5.25% equals a monthly loan payment of $11,173
After business expenses and annual loan payments of $156,004, a buyer would retain a net operating income (profit) of $146,850.
Please note that the decision of whether to extend a loan on any particular sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Attached you will find the following
- Business Summary
- Identifies important business information in an organized quick-reference format
- Asset List
- $25,000 in assets, including electronic, office and training equipment
- Employee Job Descriptions
- Detailed lists of each job title and the concurrent duties
- Also included is the current owner’s duties
- Cash Flow Analysis
- Cash Flow is the owner profit, which is the sum of business net income plus any owner perks and any non-onward going expenses.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857