Three Location Academic Coaching
Profiting over $250,000 with managers in all three established locations!
The seller currently oversees operations and assists as needed. Requiring pre-payment or an auto payment plan in place, this center has over $40,000 in the pipeline. This business boasts an average sale size around $3,000 for core academic programs with approximately 45-60 students at each location. 2018 carried a 24% profit margin!
Growth opportunities include advancing test prep in private school systems, adding satellite locations, and getting more involved in the local communities. Offering a variety of educational services, this team of dedicated teachers provide students with the individualized education they need to unlock their potential in the classroom and beyond.
- Years in Business: 20+ years in business
- Location: Omaha, Nebraska
- Service Area: Omaha Metro, Council Bluffs & Lincoln
- Number of Clients: Currently around 60 students at each location
- Services: Academic coaching (75%); college prep and homework support (20%); STEM (5%)
- Building: Offices, lobby, instruction rooms, storage room, etc. Location 1: 1,185 square feet; Location 2: 2,700 square feet; Location 3: 2,588 square feet
- Reason for Selling: New Ventures
- Employees: 40: Each location has 2 FT Directors and 10-15 PT Instructors
- Typical Hours: M-TH 9am-8pm; Fri 9am-4pm; Sat 8:30-1pm with shorter summer hours
- Seller Training Period: 3-6 months
- Growth Opportunities: Advancing test prep in private schools; directors are busy and there is no time with the Seller being hands-off. Adding satellite locations, and getting involved in the local communities like continuing a partnership with Sarpy County Chamber and partnering with more schools/networking groups
- List Price: $780,000
- Gross Sales:
- 2019: $1,242,553 Annualized
- 2018: $1,054,466
- Cash Flow:
- 2018: $257,365
- Assets Included in Purchase*
- Equipment: $54,480
- Pipeline: $40,000
- Intangible Assets: Positive reputation and proven success record
*amounts may vary
Cash Flow Analysis
|Description of Financial Statement||P&L Statement||P&L Statement||P&L Statement||P&L Statement||P&L Statement||Notes|
|Net Income Shown on Financial Statement||$109,811||$242,206||$-18,358||$152,102||$79,397|
|Meals & Entertainment||$60||$60||$63||$0||$0|
|Seller's Cash Flow = Total Addbacks + Net Income||$123,744||$257,365||$6,698||$177,979||$101,520|
|Profit Margin||19.92 %||24.41 %||0.81 %||16.03 %||8.89 %|
- Personalized Tutoring: Tutoring can help children get up to speed and feel more confident in class
- Academic Coaching: Children can get proactive expert support to sharpen skills or get extra guided practice time to help keep up and get ahead with homework and school performance
- Advancement and Test Prep: Test prep can help students accelerate skills, take on tough workloads and get a jump on the 21st century opportunities ahead.
- STEM: Focusing on science, technology, engineering and math
1 Full-time Center Director, 1 Full-time Director of Education, 12-15 Part-time Instructors
1 Full-time Center Director, 1 Full-time Director of Education, 10-12 Part-time Instructors
1 Full-time Center Director, 1 Full-time Director of Education, 1 Part-time lead instructor, 10-12 Part-time Instructors
Center Director: In charge of the overall management of the center, sales, marketing.
Director of Education: In charge of all education aspects, testing, program management, teacher hiring, training, hiring, evaluating, school contacts and visits, family communication and retention.
Both the Center Director and Director of Education have sale responsibilities. Our Center Director is responsible for bringing in new families and our Director of Education is responsible for retaining our current families. Both are cross trained for each other’s positions and can step in as needed.
Lead instructor: Opens or closes the center from time to time, assesses students, assists with program management and meeting with families, monitors the instruction floor and assists instructors.
Part-time Instructors: Instructing the students, inputting notes into the students’ programs, engaging the students and communicating with the Directors of any concerns or changes. There is a lot of turnover with PT instructors. The business is trying to work out new ways to keep people, but teachers are getting more and more bogged down with schoolwork, which is why it’s hard to keep them.
The Firm Business Brokerage 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 2018 cash flow was used with a prescribed multiple is 3.05. With this information, the computation is as follows:
$257,365 x 3.05 = $784,963
The fair market value found above positions the business list price at $780,000.
Purchase Price: $780,000
12%Buyer Down Payment: $93,600
13%Seller Financing: $101,400
75%Bank Loan: $585,000
Seller financing 5-year term at a rate of 5% equals a monthly loan payment of $1,914.
Bank loan 8-year term at a rate of 6% equals a monthly loan payment of $7,688.
After business expenses and loan payments, a buyer with a 12% down payment of $93,600 would retain a profit of $142,150, which results in a 151% return on investment in the first year.
A lender is required to have a 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $780,000 with the terms listed above, the coverage ratio is 2.23.
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.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
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