Website Platform for Sales Reps
If working from home five hours per week with recurring revenue sounds great to you, then take a look at this software for multi-level marketers. This multi-site subscription service was developed for multi-level marketers who want to have their own website to market their independent business. Built using Word Press, these easy-to-use sites are built for individuals who want to expand their reach, provide information about the products they sell, and to help customers link directly to items they can purchase. The websites contain information about the products, back-end sites for managers working with multi-level marketers under their oversight and can be customized by the user.
Users pay a monthly fee and any additional customization has associated fees. Currently utilizing this software as a service are multi-level marketers from a healthy living brand. There are 30-35 pages of content developed by this company that users can apply to their own sites. Depending on a brand’s terms and conditions for representatives, a new owner could expand into additional brands, working with their representatives to develop additional revenue streams.
This business is operated with very low overhead and no office is needed at this time. The owners must focus on their non-competing business and would love to find a buyer to help this software product grow!
- Year Established: 2015
- Location: Relocatable
- Service Area: Clients located in 9 counties including the US
- Clients: Independent brand representatives/multi-level marketers who run their own small businesses or who manage representatives working for them
- Services: WordPress website development/Software as a Service (SaaS)
- Lease: No space is needed at this time
- Reason for Selling: The owners have a separate brand management business and do not have the time to dedicate to growing this company into what it can become. They are looking for a buyer to take this product to the next level!
- Seller Training Period: 90 days transition
- Growth Opportunities: Market to the main brand representatives, market to additional brands, expand applications
- Current Owner’s Responsibilities: Owners/operators
- List Price: $175,000
- Gross Sales:
- 2017: $92,096
- Cash Flow:
- 2017: $76,917
- Assets Included in Purchase*
Intangible Assets: Good relationship with main brand, easy to use, good customer satisfaction, ready for expansion, little timer required to manage and run the business, little overhead is needed
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||P&L Statement||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$76,169||$92,751||$1,763|
|Meals & Entertainment||$748||$659||$561|
|Seller's Cash Flow = Total Addbacks + Net Income||$76,917||$93,410||$2,324|
|Profit Margin||83.51 %||74.84 %||4.60 %|
Services and Typical Clients
- Typical Clients:
- Independent brand representatives/multi-level marketers who run their own small businesses or who manage representatives working for them
- Word Press website development/software as a service
- Workload: 2-3 hours per week
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Market to the main brand representatives
- Market to additional brands
- Expand applications
- Expand to additional countries
- Expand to additional languages other than English
- Could expand to personal use websites
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 2.3. With this information, the computation is as follows:
$76,917 x 2.3 = $176,909
The fair market value found above positions the business list price at $175,000.
Purchase Price: $175,000
10%Buyer Down Payment: $17,500
10%Seller Financing: $17,500
80%Bank Loan: $140,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $326.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $1,840.
After business expenses and loan payments, a buyer with a 10% down payment of $17,500 would retain a profit of $50,924, which results in a 291% 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 $175,000 with the terms listed above, the coverage ratio is 2.96.
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.
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