Screen Printer w/ Collegiate Licensing
- Year Established: 1987
- Location: Arizona with local and national clientele
- Services: Wholesale imprinting of textiles, including licensed merchandise
- Building: 3,200 sq. ft.: Office (30%), Warehouse (70%)
- Reason for Selling: New ventures
- Employees: 11 FT: General manager (1), Office Manager (1), Artist (1), Shipping Clerk (1), Press Operators (3), QA Technicians (1), PT Bookkeeper (1), General Labor (2)
- Seller Training Period: 90 days transition
- Growth Opportunities: Expand client base, expand into new markets, targeted advertising
- Current Owner’s Responsibilities: Day-to-day oversight, owner does not print
- List Price: $990,000
- Gross Sales:
- 2017: $971,021
- 2016: $883,222
- 2015: $791,366
- 2014: $642,677
- Cash Flow:
- 2017: $268,801
- 2016: $169,109
- 2015: $85,810
- 2014: $83,654
- Assets Included in Purchase*
- Equipment: Printing presses, dryers
- Inventory: Ink
- A/R: $30,000 with 15-day turnaround, as of 5.18
- Intangible Assets: Long-term relationships with clients, knowledgeable staff, confidentiality
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||Tax Return||Tax Return||Tax Return||Notes|
|Net Income Shown on Financial Statement||$93,467||$55,625||$6,436||$40,196|
|Compensation to Owner||$84,000||$41,000||$0||$0|
|Tax on total W2 Salaries||$14,335||$4,510||$0||$0|
|Non-Business Telephone||$3,120||$3,120||$3,120||$3,120||$260/month for personal lines|
|Insurance Premiums for Owners: Health||$4,320||$4,320||$4,320||$4,320||Personal expense|
|Auto-Personal Use||$14,161||$985||$1,726||$1,050||10% is personal|
|Gifts||$7,895||$5,634||$5,838||$8,652||Non-onward going expense|
|Dump Trailer||$7,990||$0||$0||$0||Personal expense|
|Seller's Cash Flow = Total Addbacks + Net Income||$268,801||$169,109||$85,810||$83,654|
|Profit Margin||27.68 %||19.15 %||10.84 %||13.02 %|
- 50% growth since 2014!
- Ad specialty businesses
- Promotional products distributors
- Smaller screen printers
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Contracted screen printing
- Wholesale clients
- Licensed merchandise printing
- Art services to prepare for printing
- Printing on any type of textile item
- And many more items!
- Printing in any color
- Custom color mixing
- Plastinol-based inks
- Pantone matching system
- Specialty inks
- Printing on textiles
- 100% cotton
- 50/50 poly blends
- 9 FTE
- General manager (1)
- Office Manager (1)
- Artist (1)
- Shipping Clerk (1)
- Press Operators (3)
- QA Technicians (1)
- General Labor (2)
- 1 PTE
- PT Bookkeeper (1)
- Expand client base
- Expand into new markets
- Targeted advertising to other ad specialty businesses
- Attend additional trade shows/workshops
- Move to a larger location to accommodate additional employees and equipment
- Add equipment to increase production
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 3.7. With this information, the computation is as follows:
$268,801 x 3.7 = $994,564
The Fair Market Value found above positions the business List Price at $990,000.
Purchase Price: $990,000
12.5% Buyer Down Payment: $123,750
12.5% Seller Financing: $123,750
75% Bank Loan: $742,500
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $2,307.
Bank Loan 8-year term at a rate of 6% equals a monthly loan payment of $9,758.
After business expenses and loan payments, a buyer with a 12.5% down payment of $123,750 would retain a profit of $124,026, which results in a 100% 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 $990,000 with the terms listed above, the coverage ratio is 1.86.
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.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2017 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2017 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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