Return To Opportunities List

Opportunities

Psych Evaluations for Seniors, Adults, and Children

CASH FLOW
$183,230

Specifications

  • Price
    $478,000

  • Revenue
    $464,689

  • Profit Margin
    29%

  • Location

  • Reason for Sale
    Retirement planning

  • Equipment
    $50,000

  • Intangible Assets
    Excellent reputation, little competition, secured contracts, positive relationships that result in many referrals, cooperative relationships with professionals in the field, corner on the market

  • Employees
    7: Psychotherapist (1), Neuropsychologist (1), Psychometrist (1), PT donor screening psychologist (1), Office Manager 1099 (1), PT 1099 Psychologist (1), Transcriptionist 1099 (1)

  • Lease
    Co-shared space: 4 offices on lease, lobby, conference room, full bathroom, guest restroom, beautiful outdoor space

With a unique focus on the psychological evaluations of women looking to donate their eggs, this Arizona based psychology practice has been operating for over 20 years. This business has an emphasis on providing evaluations for children, adults, and seniors alike. The owner is currently doing minimal patient work as this practice has many accomplished and knowledgeable team members, both full-time and contracted employees. There is a full-time psychotherapist, a full-time neuropsychologist working with adults, a psychometrist to assist with testing, and a part-time contracted psychologist to work on egg donor cases.  Many clients are evaluated via phone, so some employees work remotely. 

 

Evaluations include neurological disability assessment and diagnosis, intellectual testing, medical procedure screening, civil and criminal testimony, alcohol/drug recovery center reports, and psychological assessment of women looking to donate their eggs. This practice is also known for providing excellent patient care through individual psychology services.  These services are offered to those of all ages and includes, but is not limited to, general individual counseling, adjustment for traumatic brain injuries, and those living with chronic pain or disabilities.

 

Due to the unique focus of the work done by this practice, a new owner many not need to be a working therapist as long as those with appropriate credentials were hired to replace the owner’s billable hours. 

 

Business Highlights

  • Year Established:  1991
  • Service Area: Within a 90-mile radius of Phoenix, Arizona
  • Services: Psychological testing; clinical psychology for children, adults, and families; egg donor screenings; forensic psychology
  • Clients: Children through seniors, companies who contract for screenings
  • Lease: Co-shared space: 3 offices on lease, lobby, conference room, full bathroom with kitchen, guest restroom, beautiful outdoor space
  • Reason for Selling: Retirement planning
  • Employees: 7: Psychotherapist (1), Neuropsychologist (1),PT 1099  Psychometrist (1), PT donor screening psychologist (1),PT  Office Manager 1099 (1), PT 1099 Psychologist (1), Transcriptionist 1099 (1)
  • Hours: M-F 9-5
  • Seller Training Period: Flexible
  • Growth Opportunities: Increase relationships for additional referrals, add staff to increase capacity, increase distance contract work

 

Financial Highlights

  • List Price: $478,000
  • Gross Sales:
    • 2017/18: $464,689 (TTM)
    • 2016: $448,698
    • 2015: $359,344
  • Cash Flow:
    • 2017/18: $183,230 (TTM)
    • 2016: $217,398
    • 2015: $194,727
  • Assets Included in Purchase*
  • Equipment: $50,000: Furniture, equipment, materials
  • Intangible Assets: Excellent reputation, little competition, secured contracts, positive relationships that result in many referrals, cooperative relationships with professionals in the field

*amounts may vary

Typical Clients

  • Children through seniors of any gender
  • Those seeking individual therapy
  • Companies who contract for screenings
    • Drug and alcohol treatment centers
    • Egg donor facility
    • School districts
    • Hospitals
    • Attorneys
    • Universities
  • Referred clients include:
    • Those needing an evaluation for gastric bypass
    • Those needing an evaluation for long-term pain management
    • Those needing an evaluation of intellectual skills
    • Those needing an evaluation of symptoms and a diagnosis
  • Those who experience a disability
  • Those who live with the effects of a traumatic brain injury

Services

  • Clinical psychology services for children, adults, and families
  • Evaluations
  • Psychological Testing
  • Medical procedure screenings
  • Forensic psychology

Employees

Employees: 7

  • Psychotherapist (1)
  • Neuropsychologist (1)
  • Psychometrist (1)
  • PT donor screening psychologist 1099 (1)
  • Office Manager 1099 (1)
  • PT Psychologist 1099 (1)
  • Transcriptionist 1099 (1)

Growth Opportunities

  • Increase relationships for additional referrals 
  • Increase evaluation work with drug and alcohol treatment centers 
  • Add staff to increase capacity 
  • Increase distance contract work 
  • Increase egg donor evaluations 
  • Decrease individual psychotherapy services and focus on testing and evaluations

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 2016/2017 cash flow was used with a prescribed multiple is 2.61.  With this information, the computation is as follows:

$183,320         x          2.61       =          $478,230

The fair market value found above positions the business list price at $478,000.

Funding Example

Purchase Price:                       $478,000

10%  Buyer Down Payment:     $47,800

25%  Seller Financing:             $119,500

65%  Bank Loan:                      $310,700

Seller financing 6-year term at a rate of 4.50% equals a monthly loan payment of $1,897.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $4,083.

After business expenses and loan payments, a buyer with a 10% down payment of $47,800 would retain a profit of $111,470, which 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 $478,000 with the terms listed above, the coverage ratio is 2.55. 

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. 

 

Cash Flow Analysis

Description of Financial StatementP&L Statement
TTM November - October
P&L Statement
Accrual
Tax ReturnTax ReturnTax ReturnTax ReturnNotes
2017/20182016/20172015/20162015/20162014/20152014/2015
GROSS SALES$464,689$488,747$448,698$448,698$359,344$359,344
Net Income Shown on Financial Statement$44,785$38,974$719$719$1,470$1,470
ADDBACKS
Compensation to Owner$108,333$195,099$120,694$120,694$124,476$124,476Operator/owner
Other Unrelated Salaries$0$36,000$38,783$38,783$38,601$38,601Owner's Wife
11% Tax on total W2 Salaries$0$25,421$17,542$17,542$17,938$17,938
Depreciation$0$3,543$3,550$3,550$3,550$3,550
Interest$2,589$1,460$333$333$484$484
Meals & Entertainment$5,958$6,621$4,074$4,074$3,791$3,791
Contributions/Donations$0$5$0$0$20$20
Cell Phone$4,800$2,400$2,400$2,400$2,400$2,4002 lines at $200/month
Auto-Personal Use$9,087$3,232$7,445$7,445$1,177$1,177Personal expense
Line Item 23$0$0$35,625$35,625$14,462$14,462To Owner
Line Item 24$0$16,766$36,233$36,233$36,358$36,358To Owner
Medical Reimbursement$7,678$8,746$0$0$0$0To Owner
Onward Going Salary$0$-50,000$-50,000$-50,000$-50,000$-50,000Replacement of Wife
TOTAL ADDBACKS$138,445$249,293$216,679$216,679$193,257$193,257
Seller's Cash Flow = Total Addbacks + Net Income$183,230$288,267$217,398$217,398$194,727$194,727
Profit Margin39.43 %58.98 %48.45 %48.45 %54.18 %54.18 %
 

Purchase Price:

$478,000

$
%
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:
2017/2018 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2017/2018 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: %

Attachments

Document Title / Description

This folder is empty.

Access to this Deal Room is restricted

Would you like to access the deal room?

Yes, please

Interested in
this business?

Complete the following information to sign an NDA and see more details!

Already have an account? Log in here.

Click to download NDA form

Print, sign and send to:

210 N 78th St. 2nd Floor
Omaha, NE 68114

Or fax to:

f 402.939.0857

Thinking of Selling?
The top 5 questions to ask any potential broker:


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.