Opportunities
Integrated Barcode Company
Large client base with 147% ROI in first year!
Specifications
This integrated barcode systems company is ready for new ownership! They provide media and consumables (labels, transfer ribbons, thermal tags) for 65% of their 1,800 client base, with the remaining 45% of clients utilizing their software and hardware services. They have one corporate office located in Orange County, California; and an additional sales office located in Georgia. They provide services nationwide and also have international clients! This small but efficient team produced nearly $2,000,000 in sales in 2020. A new owner has a wonderful opportunity to expand into new industries or continue to run this successful business as-is.
The company currently places their orders with nearly 240 vendors and keeps approximately $35K worth of inventory on hand at any given time. Along with offering a huge selection of products, they also provide printer & scanner maintenance and full-scale nationwide fulfillment services. They pack and ship customer-specific orders daily and distribute the shipments locally as well as nationwide using United Parcel Service and LTL freight companies.
Priced at $658,000, a new owner would see a 167% return on investment in the first year after debt payments. Growth is unlimited, as there are untapped markets across the country. Small businesses all the way up to large retail chains need these services to keep up with ever-evolving technology while maintaining profitability and keeping costs low. The current owner will stay on board for 3-5 years to spend the necessary time to train the new owner; the possibilities for revenue growth are exponential!
Business Highlights
Year Established: 2007
Location: Corporate office in Orange County, California; Sales office in Georgia
Service Area: Nationwide, with some international customers
Services: Barcode system solutions & integration, equipment maintenance, fulfillment services
Clients: Over 1,800 in customer database across several different industries including retail, agriculture, fulfillment companies, healthcare, government, wireless companies, etc.; 55% resellers, 45% end-users
Lease: 3,500 sq. ft.: 70% warehouse, 30% office space: $4,900/month
Reason for Selling: Strategic exit planning
Personnel: 5: 1 Owner, 1 Office/Marketing Manager, 1 East Coast Manager (based in Georgia); 1 PT, plus 1 1099 sales rep (based in Chicago)
Seller Training Period: 3-5 years
Growth Opportunities: Increase marketing efforts to include more industries
Current Owners’ Responsibilities: Owner 1: Accounting, Order Processing, General Oversight; Owners 2 & 3: not active in the business
Financial Highlights
- List Price: $645,000
- 2020-2021 Average Cash Flow: $191,086
*amounts may vary
Assets
- Assets: $94,000+
- Equipment: $94,007 – Various electronics, computers, hardware, furniture, etc., plus 1 Forklift ($15k), 1 Air Compressor ($7.5k), and 1 Rewind Table ($20k)
- Inventory: ~$35k at any given time (fluctuates)
- Intangible: Client base covers a variety of industries, large number of repeat clients, solid reputation for excellent customer service
Cash Flow Analysis
| Description of Financial Statement | P&L Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2021 | 2020 | 2019 | 2018 | ||
| GROSS SALES | $1,591,452 | $1,930,698 | $1,682,661 | $1,628,583 | |
| Net Income Shown on Financial Statement | $-20,090 | $90,410 | $31,391 | $85,754 | |
| ADDBACKS | |||||
| Compensation to Owner | $112,804 | $108,000 | $107,810 | $67,700 | |
| 11% Tax on total W2 Salaries | $12,408 | $11,880 | $11,859 | $7,447 | |
| Depreciation | $0 | $1,491 | $124 | $0 | |
| Interest | $26,433 | $97 | $3,163 | $7,937 | |
| Insurance | $628 | $6,591 | $7,909 | $6,494 | |
| 401k | $6,674 | $4,320 | $4,546 | $2,031 | |
| Auto Expense | $14,500 | $5,693 | $4,237 | $650 | |
| Draw | $332 | $0 | $0 | $0 | |
| TOTAL ADDBACKS | $173,779 | $138,072 | $139,648 | $92,259 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $153,689 | $228,482 | $171,039 | $178,013 | |
| Profit Margin | 9.66 % | 11.83 % | 10.16 % | 10.93 % |
- Year-over-year growth in sales
Valuation
Funding Example
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: 2020-2021 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: 2020-2021 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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