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Language Services & Interpreting for Hospitality

Interpreting 30 languages on site, 150 languages remotely!

CASH FLOW
$2,232,836

Specifications

  • Price
    $8,100,000

  • Revenue
    $8,506,314

  • Reason for Sale
    Exit strategy, industry consolidation

  • Location
    New York

  • Service Area
    New York City, Tri-State region, national work possible

  • Employees
    6 coordinators, 1 compliance manager and 1 financial manager.

  • Equipment
    $75,000

  • Intangible Assets
    Long-term client base, positive reputation, large base of qualified interpreting contractors, good processes and procedures for placements

  • Lease
    Small amount of office space required, many employees work remotely

In the heart of New York City, this interpreting company utilizes 350+ available contractors to provide excellent language services to their long-term clients.  The firm focuses on providing individualized services to the health care industry, corporate clients, and social services providers.  Finding the best interpreter for the assignment is of the utmost importance to this team as quality services is an ingrained corporate value.  Scheduling considers the requester’s languages, preferences, and cultural beliefs, in partnership with the interpreter’s experience, languages spoken, and availability.  This team can provide in person services for over 30 languages and remote services for over 150 languages.  The owner focuses on oversight of daily operations as well as business development.

The team works from an office with a small footprint and lower overhead, with most employees working remotely.  Nearly 200 rotating interpreters are compensated each pay period, but over 350 individuals are in the database.  Within the office there are six coordinators scheduling appointments and answering customer questions, one compliance manager, and one financial manager.

New York City is an excellent location for this dynamic company, with a melting pot of languages. Additional commercial clients or expanding the reach of interpreting technology utilized throughout the city is an exciting opportunity.  There is virtually no CAPEX, making growth and expansion inexpensive. 

Business Highlights

  • Year Established: 2011
  • Location:  New York, New York
  • Service Area:  New York City, Tri-State region, national work possible
  • Services: Interpreting in over 30 languages
  • Clients: Health care systems, large organizations and corporations, State social services organizations
  • Lease: Small amount of office space required, many employees work remotely
  • Reason for Selling: Exit strategy, industry consolidation
  • Employees: 6 coordinators, 1 compliance manager, 1 financial manager
  • Contractors: 350+ qualified interpreters
  • Seller Training Period: 3-6 months, or as negotiated
  • Growth Opportunities: Expansion outside of the current service area, remote interpretations, infuse technology into the process of interpretation to make it more accessible, work to build client base, stretch into additional industries
  • Current Owners’ Responsibilities: Oversight of operations

Financial Highlights

  •  List Price: $8,100,000
  • Gross Sales:
    • 2018: $8,506,314
  • Cash Flow:
    • 2018: $2,232,836
  • Assets Included in Purchase*
    • Equipment: $75,000: Equipment, furniture, fixtures
    • Intangible Assets: Long-term client base, positive reputation, large base of interpreting contractors, good processes and procedures for placements

*amounts may vary

Cash Flow Analysis

Description of Financial StatementTax ReturnTax ReturnTax ReturnTax ReturnNotes
2018201720162015
GROSS SALES$8,506,314$9,103,052$9,633,239$7,582,799
Net Income Shown on Financial Statement$1,214,034$1,086,294$1,052,354$817,907
ADDBACKS
Compensation to Owner $275,000$470,659$443,962$466,374Owner 1
Other unrelated Salaries $275,000$0$0$0non-active owner
11% Tax on Total W2 Salaries $60,500$51,722$48,836$51,301
Depreciation $2,275$4,866$11,997$6,904
Interest $1,891$4,871$1,028$1,769
Meals$12,762$23,539$6,111$5,68075% personal
Pension & Profit Sharing $411,970$329,318$0$0Line item 17
Employee Benefit Program $42,532$49,622$0$0Line item 18
Travel $26,872$30,874$13,075$10,17750% personal
Replacement $-90,000$-90,000$-90,000$-90,000
TOTAL ADDBACKS$1,018,802$875,471$435,009$452,205
Seller's Cash Flow = Total Addbacks + Net Income$2,232,836$1,961,765$1,487,363$1,270,112
Profit Margin26.25 %21.55 %15.44 %16.75 %
  • 26% Profit margin in 2018

Services and Clients

Interpreting services:

  • Over 30 languages on-site
  • Over 150 languages remotely

Clients:

  • Health care systems
  • Large organizations
  • Large corporations
  • State social services organizations
  • Some individual clients without organizational affiliation

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

Employees and Contractors

  • 6 Coordinators
  • 1 Compliance manager
  • 1 Financial manager
  • 350+ qualified contracted interpreters

Growth Opportunities

  • Expansion outside of the current service area
  • Remote interpretations
  • Infuse technology into the process of interpretation to make it more accessible
  • Work to build client base
  • Stretch into additional industries

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 5-year avg cash flow was used with a prescribed multiple is 4.7.  With this information, the computation is as follows:

$1,726,425      x          4.7       =          $8,114,198

The fair market value found above positions the business list price at $8,100,000

Funding Example

Purchase Price:                          $8,100,000

15%Buyer Down Payment:   $1,215,000

15%Seller Financing:             $1,215,500

     70%Bank Loan:                      $5,670,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $22,376.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $74,512.

After business expenses and loan payments, a buyer with a 15% down payment of $1,215,000 would retain a profit of $1,070,180, which results in a 88% return on investment in the first year.

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.

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210 N 78th St. 2nd Floor
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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.