Opportunities
323% ROI for Fixture Installations - Pharmacies, Clinics, & Retail Stores
Year-over-year growth since 2017 with 20 W-2 employees!
Specifications
With 100% commercial clients, this fixture installation business has seen year-over-year growth since 2017! Established for more than 15 years, this business specializes in building and installing fixtures and interior signage for commercial clients. Their highly skilled and experienced team of 20 employees, including managers, crew leads, and crew workers, is known for completing projects in a professional and efficient manner. Each area manager has their own specialty, but they are all cross-trained. Clients provide blueprints and materials; no inventory is needed on hand. Included in this purchase is $85K worth of assets including tools such as chop saws, table saws, and other equipment. Clients include big & small retailers, as well as pharmacies, clinics, pet hospitals, and warehouses.
Primarily serving the East Coast states, this business provides retail store fixture installation, pharmacy fixture installation, customizations and modifications during the installation process, and quality inventory management to ensure their clients get the results they want. They also provide store remodeling, closing and relocation services.
The current owner handles general oversight, sales, and invoicing. Increasing marketing efforts or hiring a direct sales staff would provide growth for the business, as well as offering external signage, lighting work, or residential work. Priced at $805,000, this company has substantial growth opportunities. A 10% down payment of $80,500 returns $260,034 in the first year after debt payments – a 323% return on investment!
Business Highlights
Year Established: 15+ years
Location: Richmond, Virginia; regional offices in New Jersey & Florida
Service Area: Primarily the East Coast
Services:Fixtures and installation, custom millwork, glass showcases, electronic display walls, steel fixtures and gondolas
Clients:All commercial: retail establishments, warehouses, pharmacies, clinics, pet hospitals
Lease:Office and warehouse lease
Reason for Selling:Retirement
Personnel:20 (all W-2); 1 Owner, 1 Director, 3 Area Managers, 15 Installers
Seller Training Period:6 months
Growth Opportunities:Increase marketing, hire direct sales staff, offer residential work
Current Owner’s Responsibilities:Oversight, invoicing, no labor
Financial Highlights
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-Oct 13, 2020 - Accrual | Tax Return Accrual | Tax Return Accrual | Tax Return Accrual | Notes |
| 2020 | 2019 | 2018 | 2017 | ||
| GROSS SALES | $2,432,563 | $2,312,007 | $1,805,502 | $1,607,585 | |
| Annualized | $3,011,745 | ||||
| Net Income Shown on Financial Statement | $267,715 | $11,163 | $3,907 | $1,075 | |
| ADDBACKS | |||||
| Compensation to Owner | $142,000 | $227,000 | $123,500 | $159,000 | |
| 11% on Owner Salary | $15,620 | $24,970 | $13,585 | $17,490 | |
| Interest | $10,334 | $15,592 | $20,115 | $10,885 | |
| Auto Expense | $946 | $1,200 | $1,200 | $1,200 | Personal expense |
| Travel Expense | $11,038 | $14,000 | $14,000 | $14,000 | Personal expense |
| Miscellaneous | $2,365 | $3,000 | $3,000 | $3,000 | Personal expense |
| Replacement | $-55,192 | $-70,000 | $-70,000 | $-70,000 | |
| TOTAL ADDBACKS | $127,111 | $215,762 | $105,400 | $135,575 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $394,826 | $226,925 | $109,307 | $136,650 | |
| Annualized | |||||
| Profit Margin | 16.23 % | 9.82 % | 6.05 % | 8.50 % |
Clients
- Big Retailers
- Offices
- Small Retail Establishments
- Kiosks
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Closings and Relocations
- Custom Millworks
- Mall Kiosks
- Multi-store Rollouts
- Retail Fixture Displays
- Sign and Graphic Displays
- Store Fixture Installation
- Store Remodels
- Wholesale Fixture Displays
Personnel
- 1 Owner
- 3 Area Managers
- Crew Leads
- Crew
Growth Opportunities
- Increase marketing efforts
- Hire direct sales staff
- Offer residential work
Valuation Details
The Firm 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 prescribed multiple is determined 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 multiplier.
For this business, the 2-year average cash flow was used with a prescribed multiple of 2.2. With this information, the computation is as follows:
$363,840 x 2.2 = $800,448
The fair market value found above positions the business list price at $805,000.
Funding Example
Purchase Price: $805,000
10% Buyer Down Payment: $80,500
10% Seller Financing: $80,500
80% Bank Loan: $644,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,501.
Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $7,150.
After business expenses and loan payments, a buyer with a 10% down payment of $80,500 would retain a profit of $260,034, which results in a 323% return on investment in the first year.
A lender is required to have a minimum 1.25 coverage ratio for any business loans extended. At a proposed purchase price of $805,000 with the terms listed above, the coverage ratio is 3.51.
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.
*The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
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: 2-Year Average Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2-Year Average 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
| Document Title / Description |
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210 N 78th St. 2nd FloorOmaha, NE 68114
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