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Data Analytics & Market Research Firm

Producing a 45% profit margin and consistently over $1MM in sales!

CASH FLOW
$488,517

Specifications

  • Price
    $2,150,000

  • Revenue
    $1,088,463

  • Cash Flow
    $488,517

  • Location
    New Jersey

  • Service Area
    United States (75%), International (25%)

  • Profit Margin
    45%

  • Equipment
    $64,000

  • Account Receivable
    $100,000

  • Reason for Sale
    Retirement planning

  • Lease
    1,650 sq. ft.: Reception, 3 offices, open work space with desks, kitchenette, server/storage room

  • Employees
    3: 2 Project Managers, 1 intern: numerous 1099 contractors including statisticians, analysts, interviewers shoppers, callers, consultants both within and outside of U.S.

  • Intangible Assets
    Long-term client base with many repeat clients, well-trained contracting team

Providing insights to primarily Fortune 500 companies, this market research company has worked in over 100 countries since 1979.  Utilizing qualitative, quantitative, and competitive intelligence methodologies, this firm seeks to help their clients understand the motivations and habits of consumers and businesses.  Studies can include in-depth interviews, online surveys, secret shopping, price comparisons, focus groups, SWOT analyses, brand awareness, and more.  This agency truly offers full-service study options to their customers and works diligently to ensure data is collected and reported in a timely and accurate manner.  

The business operates from a 1,650 square foot office space in New Jersey.  This space has three private offices, a reception area, and open work space.  The owner has streamlined employees, with only three W-2 team members.  All other employees are 1099 contractors located across the globe who are hired based upon their expertise on an as-needed basis.  The owner oversees the business and actively manages the accounts, including writing proposals.  

Growth can be found in replicating positive projects across industries to maximize resources and gained experience.  Other areas include advertising to the client base to generate new customers, expanding price tracking studies, and hire a sales team to identify new clients.  

Business Highlights

  • Year Established: 2002
  • Location:  New Jersey
  • Service Area: United States (75%), International (25%)
  • Services: Full-service market research and data analytics: qualitative, quantitative, competitive intelligence
  • Clients: Fortune 500 companies, government agencies,  corporations across industries
  • Lease: 1,650 sq. ft.: Reception, 3 offices, open work space with desks, kitchenette, server/storage room
  • Reason for Selling: Retirement planning
  • Employees: 3: 2 Project Managers, 1 intern, numerous 1099 contractors including statisticians, analysts, interviewers, shoppers, consultants, both within and outside of U.S.
  • Seller Training Period: 6 months with continued consulting as negotiated, if desired
  • Growth Opportunities: Replicate projects across industries, advertise to customer base, expand price tracking studies, focus on business development
  • Current Owner’s Responsibilities: General Management 

Financial Highlights

  • List Price: $2,150,000
  • Gross Sales:
    • 2018: $1,088,463
  • Cash Flow:
    • 3 year avg: $510,277
  • Assets Included in Purchase*
    • Equipment: $60,000: Equipment, furniture, fixtures, computers, software, server, printers, phone system
    • A/R:  $100,000
    • Intangible Assets: Long-term client base with many repeat clients, well-trained contracting team
    • Tangible Assets:
      • An extensive network of human capital specialized in local languages, analytical capabilities and/or research
      • Documented project plans and project management systems
      • Software applications to support project implementation
      • Updated website and a growing social media presence
      • Support materials for training (PPT presentations, videos), surveys (questionnaires, discussion guides, email invites, etc.) and focus groups
      • Marketing materials consisting of Capabilities Brochures, Industry-specific Applications and Case Studies
      • A proprietary panel of shoppers, callers and online survey respondents totaling approximately 4,000
      • Library of prior projects and studies including questionnaires, discussion guides and reports

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L StatementTax ReturnTax ReturnNotes
201820172016
GROSS SALES$1,088,463$1,226,702$1,021,492
Net Income Shown on Financial Statement$6,060$2,551$31,274
ADDBACKS
Compensation to Owner$196,000$150,000$146,000
11% Tax on total W2 Salaries$21,560$16,500$16,060
Depreciation$8,488$14,555$39,090
Interest$145$2,300$300
Meals & Entertainment$11,670$9,423$9,831
Contributions/Donations$123$0$0
Auto$4,336$624$415
Travel$19,551$40,098$10,710
Cell Phone$1,320$1,320$1,320
Pension and Profit Sharing$165,000$314,000$209,000
Health Insurance$3,078$0$0
One Time Salary$40,833$0$0
Organizations$4,800$4,800$4,800
Supplies$5,553$7,862$9,482
TOTAL ADDBACKS$482,457$561,482$447,008
Seller's Cash Flow = Total Addbacks + Net Income$488,517$564,033$478,282
Profit Margin44.88 %45.98 %46.82 %
  • Profit Margin 2018: 45%
  • 2018 revenues were impacted by the owner taking time to care for ill family members.

Typical Services and Clients

Services:

  • Full-service market research
  • Data analytics
    • Qualitative (33%)
    • Quantitative (33%)
    • Competitive Intelligence (33%)

      Studies:

  • Secret shopper
  • Focus groups
  • Price comparisons
  • Customer satisfaction
  • Brand awareness
  • Market analysis
  • SWOT analysis
  • And more!

    Clients:

  • Fortune 500 companies
  • Government agencies
  • Large corporations
  • Any industry looking for outside research and analytics
    • Education
    • Healthcare
    • Technology
    • Consumer products
    • Utilities
    • And more

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

Employees

Total Employees: 3

  • 2 Project managers
  • 1 Intern
  • All are bilingual

 

Total Contractors: 200+ (within and outside of U.S.)

  • Analysts
  • Project Managers
  • Statisticians/Data Scientists
  • Shoppers
  • Callers
  • Consultants

Growth Opportunities

  • Replicate projects across other industries
  • Advertise to customer base
  • Expand price tracking studies
  • Focus on business development
  • Follow-up with prior clients
  • Hire sales team to assist in business acquisition

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 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 3-year avg. cash flow was used with a prescribed multiple is 4.25.  With this information, the computation is as follows:

$510,277         x          4.25     =          $2,168,677

The fair market value found above positions the business list price at $2,150,000.

Funding Example

Purchase Price:                          $2,150,000

12.5% Buyer Down Payment:   $268,750

12.5% Seller Financing:            $268,750

75% Bank Loan:                      $1,612,500

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $5,010.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $21,191.

After business expenses and loan payments, a buyer with a 12.5% down payment of $268,750 would retain a profit of $195,867, which results in a 72% 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 $2,150,000 with the terms listed above, the coverage ratio is 1.62. 

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.

Purchase Price:

$2,150,000

$
%
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:
3 year avg. Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
3 year avg. 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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210 N 78th St. 2nd Floor
Omaha, NE 68114

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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.