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Three Location Academic Coaching

Profiting over $250,000 with managers in all three established locations!

CASH FLOW
$257,365

Specifications

  • Price
    $780,000

  • Revenue
    $1,054,466

  • Equipment
    $54,480

  • Location
    Omaha, Nebraska

  • Lease
    Location 1: 1,185 square feet; Location 2: 2,700 square feet; Location 3: 2,588 square feet

  • Reason for Sale
    New Ventures

  • Employees
    40: Each location has 2 FT Directors and 10-15 PT Instructors

  • Intangible Assets
    Positive reputation and proven success record

  • Profit Margin
    24%

Managers and full staff at each location! This business has been serving the Omaha Metro for 20 years. Each location has two full-time directors and 10-15 part-time instructors with 45-60 students at each location. Part of a national franchise with locations across the globe, these three educational centers are the only ones in Eastern Nebraska and are dedicated to helping students succeed. Services include academic coaching (75%) college prep and homework support (20%) and STEM (5%). 

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.

Business Highlights

  • 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

Financial Highlights

  • 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 StatementP&L StatementP&L StatementP&L StatementP&L StatementP&L StatementNotes
20192018201720162015
GROSS SALES$621,277$1,054,466$821,713$1,110,240$1,141,501
Net Income Shown on Financial Statement$109,811$242,206$-18,358$152,102$79,397
ADDBACKS
Depreciation$7,078$8,449$14,593$16,156$14,090
Interest$380$0$0$121$22
Meals & Entertainment$60$60$63$0$0
Contributions/Donations$15$250$0$0$10
Amortization$6,400$6,400$10,400$9,600$8,001
TOTAL ADDBACKS$13,933$15,159$25,056$25,877$22,123
Seller's Cash Flow = Total Addbacks + Net Income$123,744$257,365$6,698$177,979$101,520
Profit Margin19.92 %24.41 %0.81 %16.03 %8.89 %
.

Services

  • 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

Employees

Location 1:

1 Full-time Center Director, 1 Full-time Director of Education, 12-15 Part-time Instructors

Location 2:

1 Full-time Center Director, 1 Full-time Director of Education, 10-12 Part-time Instructors

Location 3:

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.

Valuation Details

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.

Funding Example

 

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. 

 

Purchase Price:

$780,000

$
%
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:
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

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
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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.