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New York State Home Medical Equipment

Earning over $2MM annually!

CASH FLOW
$251,772

Specifications

  • Price
    $1,200,000

  • Revenue
    $2,011,608

  • Inventory
    $100,000

  • Location
    Capital District/Eastern in New York

  • Service Area
    Within 100 miles of the office

  • Employees
    10: 4 Customer service, billing, technician, warehouse, 3 support staff

  • Lease
    4,700 sq. ft.: 2,100 sq. ft. showroom, large warehouse and shop, offices, accessible restrooms, conference room, kitchenette

  • Equipment
    $67,000: Desks, computers, customer service stations, telephone and security system, retail displays, storage trailer, elevating pallet jacks

  • Intangible Assets
    Well-established business, compassionate and knowledgeable team

Serving the Capital District of Eastern NY, this home medical supply company is earning over $2MM annually.  Medical equipment sold by this business includes complex and standard wheelchairs and other medical equipment, power mobility scooters and wheelchairs, patient lifts, lift chairs, beds, bathroom aides, walkers and more.  The company also sells disposable medical supplies such as urological and enteral supplies, compression garments and incontinence items.  For those customers looking for home and vehicle modifications, this team can complete bathroom accessibility, installation of modular ramps, stairlifts, platform lifts and vehicle lifts.  Customer include children, adults, and seniors, individuals with mobility concerns and/or physical disabilities, caregivers, and family members.  Most insurance is accepted as well as Medicare and Medicaid and all billing and insurance requests are completed in-house.  The owners currently focus on home modifications, quotes and bidding, office management, compliance and customer orders.  Their roles may be combined and completed by one individual, but some duties may be disseminated to current staff. 

 

The business operates from a 4,700 square foot retail location that is near many medical professionals, making referrals convenient for patients.  The large showroom has ample space for display items and consultations.  A large warehouse and shop offer ample space for technical work and inventory storage. 

Business has been growing and continued growth can be found in taking on more home modification projects as well as expanding the service and delivery areas.  The staff is well-trained and are a compassionate group of professionals.

Business Highlights

  • Year Established: 1995
  • Location:  Capital District/Eastern in New York
  • Service Area:  Within 100 miles of the office
  • Services: Home health devices, rehab and medical equipment, mobility devices, personal garments, medical supplies, home and vehicle modifications 
  • Clients: Aging population; caregivers; individuals with disabilities or mobility concerns; those needing disposable medical supplies or compression items
  • Lease: 4,700 sq. ft.: 2,100 sq. ft. showroom, large warehouse and shop, offices, accessible restrooms, conference room, kitchenette
  • Reason for Selling: Strategic retirement planning
  • Personnel: 10: 4 Customer service, billing, technician, warehouse, 3 support staff
  • Seller Training Period: 90 days or as negotiated
  • Growth Opportunities: home modifications, disposables, complex rehab, custom compression
  • Current Owners’ Responsibilities: Owner 1: Home modifications, quotes; Owner 2: Office management, compliance, custom order specialist

Financial Highlights

  • List Price: $1,200,000
  • Gross Sales:
    • 2019: $2,215,244 Annualized
    • 2018: $2,011,608
  • Cash Flow:
    • 2019: $257,873 Annualized
    • 2018: $251,772
  • Assets Included in Purchase*
    • Equipment: $67,000: desks, computers, customer service stations, telephone system, security system, retail displays, storage trailer, warehouse tools, workbench, shelving, elevating pallet jacks, kitchen appliances
    • Vehicles: $12,000: Toyota Sienna, utility trailer
    • Approximate Inventory: $100,000
    • Intangible Assets: Well-established business, compassionate and knowledgeable team

*amounts may vary, assets may be depreciated, replacement cost, or fair market value 

Cash Flow Analysis

Description of Financial StatementP&L Statement
January - September
Tax ReturnTax ReturnNotes
201920182017
GROSS SALES$1,661,433$2,011,608$1,964,260
Net Income Shown on Financial Statement$233,093$76,299$96,740
ADDBACKS
Compensation to Owner$0$184,600$227,700
11% Tax on total W2 Salaries$0$20,306$25,047
Depreciation$0$22,868$0
Interest$12$0$0
Meals & Entertainment$0$0$628
Contributions/Donations$3,320$5,059$3,210
Rent Home Office$8,415$11,220$11,220$935/month
Cell Phone and Home Internet$4,713$6,284$6,284
Owner's Mileage Reimbursement$8,352$11,136$11,136
Owner's Long Term Care Insurance$6,000$8,000$8,000
Travel - Vacation$2,250$3,000$3,000
Replacement Employee$-72,750$-97,000$-97,000
TOTAL ADDBACKS$-39,688$175,473$199,225
Seller's Cash Flow = Total Addbacks + Net Income$193,405$251,772$295,965
Profit Margin11.64 %12.52 %15.07 %
.

Clients

  • Aging population
  • Those with mobility concerns
  • Those in rehabilitation
  • Those needing compression garments
  • Those needing home modifications
  • Those in need of supplemental nutrition
  • Individuals who have disabilities
  • Individuals with adapted vehicles
  • Individuals, caregivers, and family members

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

Services

  • Home health devices
  • Rehab and medical equipment
  • Mobility devices
  • Personal garments
  • Compression garments
  • Medical supplies
  • Home and vehicle modifications 

Personnel

Total Personnel: 10

  • 4 Customer service
  • Billing
  • Technician
  • Warehouse
  • 3 Support staff

Growth Opportunities

The potential for growth is throughout the company including:

  • Expand home modification business
  • Build durable medical equipment revenues
  • Expand service area
  • Network with local health care professionals
  • Tremendous opportunity with current and expanded demographics

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, a 2019 annualized cash flow was used with a prescribed multiple is 4.65.  With this information, the computation is as follows:

$257,873         x          4.65     =          $1,199,109

The fair market value found above positions the business list price at $1,200,000.

Funding Example

Purchase Price:                             $1,200,000

12.5% Buyer Down Payment:          $150,000

12.5% Seller Financing:                   $150,000

75% Bank Loan:                                $900,000

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $2,796.

Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $11,827.

After business expenses and loan payments, a buyer with a 12.5% down payment of $150,000 would retain a profit of $82,388, which results in a 55% 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.

Purchase Price:

$1,200,000

$
%
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:
2019 Annualized Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2019 Annualized 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.