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Opportunities

Relocation, Storage & Records Management Company

Pending

CASH FLOW
$367,026

Specifications

  • Price
    $1,200,000

  • Cash Flow
    $367,026

  • Revenue
    $1,150,425

  • Equipment
    $735,129

  • Location
    Siouxland

  • Lease
    15,000 sq. ft. warehouse and office space

  • Profit Margin
    30%

  • Service Area
    Tri-state area

  • Employees
    15

For over 30 years, this relocation and storage company has served the Siouxland and the tristate area, growing from a one-man operation into the go-to for local and interstate moves. Gross sales have topped $1.1M for the last two years, with the company seeing a cash flow nearing or surpassing the $300,000 mark. Operating at a 26% profit margin in 2016, this company still has room to grow.

Offices and storage are located in a 15,000-sq. ft. facility. The seller employees 15 individuals, 7 of whom are drivers. A General Manager and Office Manager work with the seller in the office, where a part-time bookkeeper assists for 15 to 20 hours per week. Additionally, there are 5 manual laborers for moving and storage duties.

Included in the purchase price is $735,129 in assets. Over half of that is comprised of trucks, trailers and vans used for jobs. There is ample equipment to aid in storage and moving, as well as necessary office furniture and equipment to outfit operations.

While the company has a large share of the area market for relocations, growth exists in increasing storage services and opening a second location in a non-competing radius. Looking to sell as part of a retirement strategy, the seller is looking forward to assisting in a smooth transition to encourage continued company profitability and employee retention.

Business Highlights

  • Years in Business: 30+
  • Location and Service Area: Siouxland
  • Commercial Clients: Medical, Banking, Financial, Education, Insurance and more
  • Competition: Minimal – this company handles a majority of local moves (70%) and a large number of interstate relocations (60%)
  • Building: 15,000 sq. ft. warehouse and office space
  • Reason for Selling: Retirement planning
  • Employees: 15
  • Seller Training Period: Negotiable
  • Growth Opportunities: Increase storage services, consider opening a second location in a non-competing area with the current location; establish relationships with realtors to gain referrals
  • Current Owner’s Responsibilities: Oversees all operations & sales, and handles hiring

Financial Highlights

  • List Price: $1,200,000
  • Gross Sales
    • 2017 - $1,113,973 Annualized
    • 2016 - $1,150,425
    • 2015 - $1,140,487
  • Cash Flow
    • 2017 - $330,234 Annualized
    • 2016 - $298,625
  • YOY Sales Trends:
  • Profit Margin: 30%
  • Assets Included in Purchase:
    • Equipment: $300,129 –
      • $13,690 in desks, cabinets, copiers, etc.
      • $286,439 in shelving, moving equipment, ladders and more
    • Vehicles: $435,000 – vans, trucks, trailers (please note that there is $95,000 in outstanding debt on recent vehicle purchases that would be assumed by the buyer)
    • Intangible Assets: 100% 5-star reviews on Google, outstanding reputation

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
January - August
Tax ReturnTax ReturnTax ReturnNotes
2017201620152014
GROSS SALES$742,649$1,150,425$1,140,487$1,038,087
Annualized$1,113,973
Net Income Shown on Financial Statement$170,970$200,849$243,822$197,085
ADDBACKS
Compensation to Owner$36,667$55,000$55,000$64,878
11% Tax on total W2 Salaries$4,033$6,050$6,050$7,137
Depreciation$0$16,917$16,319$7,742Non-cash item
Interest$0$1,909$2,425$1,188Non-onward going expense
Contributions/Donations$50$0$0$0Non-onward going expense
Non-Business Telephone$800$1,200$1,200$1,200Personal expenses
Life Insurance Premiums$947$0$0$0Owner's life insurance premium
Meals & Entertainment$0$0$0$1,061Personal expenses
Travel$3,955$0$0$5,29740% of travel is personal
Auto Insurance Premiums$0$2,300$2,300$2,300Owner's auto insurance premium
Retirement Plan$2,734$14,400$0$0401K for owner
TOTAL ADDBACKS$49,186$97,776$83,294$90,803
Seller's Cash Flow = Total Addbacks + Net Income$220,156$298,625$327,116$287,888
Annualized$330,234
Profit Margin29.64 %25.96 %28.68 %27.73 %
  • 30% profit margin in 2017

Services

  • Local moving
    • Roughly 70% of local moves of household goods are conducted through this company
  • International relocation
  • Long distance moves
    • 60% of interstate relocations in the area are handled by this company
  • Storage
    • Items are carefully packed and catalogued for safe storage and easy access
  • New product receiving and distribution
    • New products are received and stored until ready for placement in a facility
    • The products are moved to the location when ready and set up
    • Companies needing these services range from hotels to restaurants and more

Jobs are split 80% local and 20% interstate.

Income Analysis

  • By far, the largest income producer is local moves (67%)
  • Through all of 2016, local moves brought in $497,623
  • In comparison, through August of 2017, $404,411 in income has come in through local moves
    • Based on company-wide growth, 2017 should see $606,616 in income from local moves alone

Commercial Clients

Company serves clients across 16 industries for moving, storage and records management

Medical Real estate Banking Financial
Private industry Education Accounting Meat industry
Design Dental Insurance Foundations
Automotive Law enforcement Food processing Electronics

Employees

  • 15 employees
    • 7 drivers
    • Office Manager
    • General Manager
    • Part-time Bookkeeper
    • 5 manual laborers

Seller maintains CDL licensure, oversees operations and sales and handles hiring. Per week, the owner spends roughly 45 hours working in and on the business, but was absent for a total of 8 weeks spread out in 2016.

Assets

Vehicles - $435,000*

  • Chevy Pack Van (2) - $50,000
  • Freightliner Straight Truck (3) - $176,000
  • Tractor Trailer (2) - $63,000
  • Trailer (2) - $81,000
  • SUV’s (2) - $65,000

*please note that there is $95,000 owed on recent vehicle purchases that would be assumed by the buyer

 

Equipment - $300,129

  • Shelving - $157,575
  • Moving equipment - $74,466
    • Ladders, lifts, dollies, ramps, and more
  • Miscellaneous - $54,398
    • Folding tables, containers, carts and more
  • Office - $13,690
    • Desks, cabinets, computers/printers, copiers and phone equipment

 

A detailed asset list is available upon receipt of a signed Non-Disclosure Agreement.

Midwest Moving Statistics

Nationwide

 
 
 
Nationwide trends are driven more by logistical needs than lifestyle changes.

 

Midwest

 
 
 
 
The top 3 reasons for moving in the Midwest all require spendable income, indicating a robust and growing economy to sustain relocation companies.

 

Seasonal Moving Trends

 
 
 
As expected, peak moving season runs from May to September.
 
July has nearly twice as much activity as February, the slowest month.

 

*Data pulled from a national moving company’s research

Growth Opportunities

  • Increase storage services
    • While many utilize storage during moving, advertising storage for longer periods of time or for companies moving facilities would be a good revenue stream
  • Develop relationships with realtors
    • Great way to gain referrals
    • Most realtors work to establish themselves as experts in relocations, interstate moving and other areas, frequently acting as a go-to realtor for corporate relocations
    • Working with realtors that have established networks for relocations is a great way to get recurrent referrals
  • Open a second location
    • To continue growing, a buyer could consider setting up satellite operations outside of the immediate competitive area with the current location
    • Located in Sioux City, the company is ideally situated to expand further into Iowa, or look into locations in South Dakota and Nebraska

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          Multiplier          =          Price

“Cash Flow” is the sum of net income plus any owner perks and non-onward going expenses.

“Multiplier” is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).

The 2016 Cash Flow is $298,625. The prescribed multiplier is 4

With this information, the computation result follows:

$298,625         x          4          =          $1,194,500

The List Price for the business is set at $1,200,000.

 

Funding Example, based on the following:

  • Buyer down payment of 10% ($120,000)
  • Seller carry of 10% ($120,000) at a rate of 4.5% for 5 years
  • Bank loan of 80% ($960,000) at a rate of 5.25% for 7 years
  • After loan payments, a buyer with a down payment of $120,000 would receive a return on investment of 89% in the first year.

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:

$1,200,000

$
%
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:
2016 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2016 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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