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Structural Engineering Firm in PA

CASH FLOW
$334,311

Specifications

  • Price
    $1,383,000

  • Revenue
    $1,896,253

  • Profit Margin
    24%

  • Location
    Western Pennsylvania

  • Service Area
    Local and regional, with some client projects across the US and internationally

  • Lease
    3,200 sq. ft.: Offices (3), conference room, work stations (11), storage in the basement

  • Equipment
    $23,000

  • Employees
    12: 1 Office, 1 office manager, 2 CAD designers, 1 senior designer, 7 engineers

  • Intangible Assets
    Worldwide experience, long-term customer relationships, wide diversity of projects, diversified customer base, efficient well-trained team

Growing year-over-year, this structural engineering company is well-positioned for continued increase in sales for 2019.  Primarily providing design services for commercial properties, less than 10% of revenue can be attributed to residential projects.  With over 100 consistent customers, this firm works with architects and building owners alike, producing meticulous and thoughtful designs for universities, hospitals, schools, churches, health clinics, corporations, theaters, hotels, parking structures, and much more!  Typically, work is done throughout the Northeast and Mid-Atlantic regions, but due to client variety, many projects have been completed across the US and internationally as well. 

 

The well-diversified customer base and wide-ranging project requests keep this team of twelve at the top of their game.  This efficient crew includes CAD designers, seven engineers, a senior designer, and support staff.  The owner currently provides daily oversight and business development as well as minimal billable hours.  Working from a spacious 3,200 square foot office, there is plenty of room to expand the team without investing in unnecessary office renovations. 

 

Growth opportunities can be found in expanding advertising and marketing efforts to recruit new business relationships.  Additional resources can be invested in growing the team if a buyer would like to take advantage of the plentiful work available in this industry. 

Business Highlights

  • Year Established: 2013
  • Location:  Western Pennsylvania
  • Service Area: Local and regional, with some client projects across the US and internationally
  • Clients: Architects with some direct customers
  • Services: Structural engineering services for (non-residential buildings: 90%; residential 10%), expert witness, restoration, etc.
  • Equipment: $23,000: Equipment, furniture and fixtures
  • Intangible Assets: Worldwide experience, long-term customer relationships, wide diversity of projects, diversified customer base, efficient well-trained team
  • Lease: 3,200 sq. ft.: Offices (3), conference room, work stations (11), storage in the basement
  • Reason for Selling: Divestment
  • Employees: 13: 1 Office, 1 office manager, 2 CAD designers, 1 senior designer, 7 engineers
  • Hours: M-F 8-5
  • Seller Training Period: 6 – 18 months, as negotiated
  • Growth Opportunities: Invest time into marketing efforts, grow the team to increase capacity, manage resources to maximize profitability
  • Current Owner’s Responsibilities: Oversight, 5-10 billable hours weekly

Financial Highlights

  • List Price: $1,383,000
  • Gross Sales:
    • 2018: $1,896,253 Annualized
    • 2017: $1,763,101
    • 2016: $1,609,322
    • 2015: $1,440,151
  • Cash Flow:
    • 2018: $334,311 Annualized
    • 2017: $415,499
    • 2016: $325,213
    • 2015: $339,911
  • Work in progress and secured work:  $670,000+

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan. - Nov.
Tax ReturnTax ReturnTax ReturnNotes
2018201720162015
GROSS SALES$1,738,259$1,763,101$1,609,322$1,440,151
Annualized$1,896,253
Net Income Shown on Financial Statement$221,640$235,461$230,732$247,710
ADDBACKS
Compensation to Owner$110,000$120,000$120,000$120,000
11% Tax on total W2 Salaries$12,100$13,200$13,200$13,200
Depreciation$0$732$0$0
Interest$77$87,444$2,655$5,597
Simple IRA$3,300$3,600$3,600$3,6003% match paid to owner
Auto Payment$6,235$6,802$6,802$6,802$566.82/month
Car Insurance$1,100$1,200$1,200$1,200$1,200/year
Personal Fuel$1,283$1,400$1,400$1,400$1,400/year
Auto Maintenance$2,750$3,000$3,000$3,000$3,000/year
Country Club$5,137$5,604$5,604$5,604$467/month
Amortization$16,500$18,000$18,000$18,000
Contributions/Donations$316$0$0$0
Ongoing Salary$-82,500$-90,000$-90,000$-90,000To keep owner on
Tickets$8,514$9,056$9,020$3,798Personal expense
TOTAL ADDBACKS$84,812$180,038$94,481$92,201
Seller's Cash Flow = Total Addbacks + Net Income$306,452$415,499$325,213$339,911
Annualized$306,452
Profit Margin17.62 %23.57 %20.21 %23.60 %
  • Increasing sales year-over-year!

Typical Clients and Services

Clients:

  • Architects
  • Direct customers (less frequently)
    • Business owners
    • Home owners
    • Corporate boards
    • Developers
    • Attorneys

Services:

  • Structural engineering
    • Non-residential buildings 90%
    • Residential 10%
  • Expert witness testimony
  • Inspections
  • Restoration
  • And more!

 

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

Employees

Total employees: 12

  • 1 Office
  • 1 Office manager
  • 2 CAD designers
  • 1 Senior designer
  • 7 Engineers

Growth Opportunities

  • Invest additional time into marketing efforts 
  • Grow the team to increase capacity 
  • Manage resources to maximize profitability

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 4-year average cash flow was used with a prescribed multiple is 4.  With this information, the computation is as follows:

$345,943         x          4          =          $1,383,772

The fair market value found above positions the business list price at $1,383,000.

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

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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.