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Opportunities

Relocatable Cross-Border Logistics Management

CASH FLOW
$67,493

Specifications

  • Price
    $200,000

  • Location
    Relocatable; managed remotely online.

  • Profit Margin
    36%

  • Service Area
    US, Mexico, and Canada.

  • Employees
    3 FT; all negotiable to remain on

  • Reason for Sale
    Strategic partner desired

  • Multiplier
    3.00

  • Cash Flow
    $67,493

  • Intangible Assets
    Extensive relationships with regional, national, and international carriers. Custom website. Competitive network of both company drivers & owner operators. Decades of reputable clients resulting in well trusted company name.

With 20 years of experience and warehousing on both sides of the border, this company is fully faceted in freight management services. From contract negotiations to comprehensive freight analysis, this trusted firm guides businesses through the entire shipping process. Long term relationships with regional and national carriers as well as company drivers and owner operators ensure clients are offered the best possible rate and time frame for any type of shipment.

 

This business is operated remotely and would be easily relocatable. Currently the owner and 2 FT employees efficiently manage the work load, all of which would be willing to stay on board if desired. With a strategic new owner, this company could expand fully into the Mexico market and actively acquire new clients.

 

Gaining new client contracts would be an excellent opportunity for growth for this business. The average relationship spans around 5 years and remains dependent on competitive pricing. Igniting social media and creating loyalty promotions would rapidly expand this respected company.

Business Highlights

  • Year Established: 2005
  • Location and Service Area: Managed remotely online; service area spans the US, Mexico, and Canada.
  • Type of Clients: Business to business
  • Services: Arrange and manage freight transportation internationally for range of companies & products.
  • Reason for Selling: Strategic partner desired
  • Employees: 3 FT; all negotiable to remain on
  • Hours: M-F 8am-5pm
  • Seller Training Period: Owner would be willing to stay on with company if desired
  • Growth Opportunities: Ignite social media, further expansion into the Mexico market, marketing targeted towards new client acquisition.
  • Current Owner’s Responsibilities: Owner/Operator

Financial Highlights

  • List Price: $200,000
  • Gross Sales
    • 2017: $185,217
    • 2016: $298,553
  • Owner Profit/Cash Flow
    • 2017: $67,493
    • 2016: $70,277
  • Assets Included in Purchase
    • Intangible Assets: Extensive relationships with regional, national, and international carriers. Custom website. Competitive network of both company drivers & owner operators. Decades of reputable clients resulting in well trusted company name.  

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnNotes
201720162015
GROSS SALES$185,217$298,553$459,419
Net Income Shown on Financial Statement$56,931$52,727$-62,992
ADDBACKS
Compensation to Owner$0$5,000$66,819
Other unrelated Salaries$0$0$0
11% Tax on total W2 Salaries$0$550$7,350
Depreciation$2,025$3,247$5,371
Interest$2,952$2,911$13,750
Line Item 17 - Pension & Profit Sharing$0$150$1,350To Owner
Amortization$639$638$532
Meals & Entertainment$866$974$2,988
Cell Phone$4,080$4,080$4,0802 lines at $340/month
TOTAL ADDBACKS$10,562$17,550$102,240
Seller's Cash Flow = Total Addbacks + Net Income$67,493$70,277$39,248
Profit Margin36.44 %23.54 %8.53 %
  • 2017 Profit Margin: 36%

Typical Clients

  • Business to Business
    • Manufacturing, perishables, etc.

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

Services

  • Arrange and manage freight transportation internationally for range of companies & products.

Employees

  • 3 FT
    • Including owner/operator

All employees intend to stay with the company if desired by new owner

Growth Opportunities

  • Ignite social media
  • Fully expand into the Mexico market
  • Marketing targeted toward new client acquisition

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.  With this information, the computation is as follows:

$67,493           x          3          =          $202,479

The fair market value found above positions the business list price at $200,000.

Funding Example

Purchase Price:                      $200,000

10%  Buyer Down Payment:     $20,000

25%  Seller Financing:              $50,000

65%  Bank Loan:                      $130,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $932.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $1,708.

After business expenses and loan payments, a buyer with a 10% down payment of $20,000 would retain a profit of $35,807, which results in a 179% 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 $200,000 with the terms listed above, the coverage ratio is 2.13. 

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)

Purchase Price:

$200,000

$
%
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: %

Attachments

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