In-Home Senior Care Services in Nebraska – Owner Manages Remotely
Selling at a 3.1 multiple with substantial growth opportunities!
This in-home senior care business is selling at a 3.1 multiple with substantial growth opportunities! Serving Southeast Nebraska and Southwest Iowa, clients are mostly private pay and the majority of payments are through personal estates. Current hourly charge is $24-$30 with some clients needing 24/7 care, and they are poised to increase gross revenue in January 2021 with a price increase to $25-$35/ hour. The owner has worked out of his home for 10 years and a new owner can manage the business remotely. The protected territory of this franchise includes Southeast Nebraska and Southwest Iowa for a total of eight counties and the franchise agreement was recently renewed for another 10 years. Revenue is split 51% Nebraska counties and 49% Iowa counties; however, much of the region has been untapped, leaving plenty of room for growth within the current service area including Northwest Missouri.
The company provides services like cooking, light housekeeping, shopping, personal grooming, doctor visits and other non-medical assistance including overnight care and 24/7 care. Their 28 peer caregivers - with a third of them having a 5+ year tenure - are paid hourly and are assigned to clients within their driving radius. With no physical office space, they have little to no overhead and employees considered part time, do not receive health benefits. The company has 2 owners, but only one of them is involved in the day-to-day operations and oversees HR, services, financials, the office, marketing efforts, as well as client relations. The team also includes a part time scheduler who handles payroll, scheduling, and billing.
Priced at $465,000, a 12.5% down payment of $58,125 returns $91,649 in the first year after debt payments – a 158% return on investment! Business is currently booming because most clients who would have gone into nursing homes or rehab facilities are now seeking in-home care. This company is having to turn down 2-5 potential clients on a weekly basis due to lack of caregiver capacity. There is a lot of potential to grow this business to $500K- $1M by hiring more caregivers and expanding services to cover the Missouri area.
- Year Established: 2010
- Location: Southeast Nebraska
- Service Area: Southeast Nebraska, Southwest Iowa
- Services: Senior care: Meals, personal care, dementia/memory care, housekeeping, transportation, respite care, and 24-hour care
- Clients: Seniors living at home
- Reason for Selling: Retirement
- Employees: 29: 1 scheduler and payroll, 28 caregivers
- Seller Training Period: 3 months (more as needed)
- Growth Opportunities: Hire more caregivers and increase client base, expand services to the Missouri area and surrounding areas
- Current Owners’ Responsibilities: Owner 1: HR, services management, financial oversight; marketing, office management, client relations; Owner 2: Works 5-10 hours a week as a fill in caregiver
- List Price: $465,000
- Gross Sales:
- 2020: $487,303
- 2019: $479,817
- Cash Flow:
- 2020: $151,115
- 2019: $112,166
- A/R: $40,000
*amounts may vary
Cash Flow Analysis
- Profit margin 2020: 31%
- Personal care
- Dementia/memory care
- Respite care
- 24-hour care
- Overnight Care
Total Employees: 29
- 1 Scheduler and payroll
- 28 Caregivers
- Targeted advertising
- Grow current areas through connecting with local providers
- Work through Medicare regulations to accept those payments in the future
The Firm Advisors used a cash flow valuation methodology to determine the purchase price of the business.
Cash flow is the sum of business net income plus any owner perks and any non-onward expenses. Then we prescribe a multiple based on 20 parameter which valuate the health of the business. For this valuation, we used the 2020 cash flow.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
With this information, the computation is as follows:
$151,115 x 3.1 = $468,457
Purchase Price: $465,000
|12.5%Buyer Down Payment||$58,125||Must be unborrowed funds|
|12.5%Seller Financing or Equity||$58,125||5-year term at a rate of 4.50% = a monthly loan payment of $1,084|
|75%Bank Loan||$348,750||10-year term at a rate of 6% = a monthly loan payment of $3,872|
- Cash Flow: $151,115
- Annual Payment:
- To Seller: $13,004
- To Bank: $46,462
- Net Profit (after expenses and loan payment): $91,649
|Document Title / Description|
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