Opportunities
Environmental, Health & Safety Training
Sold
Specifications
Since 1993, this company has provided EH&S training and consulting services throughout Arizona, Mexico, Canada and South America in the areas of OSHA, DOT/IATA, MSHA, Hazwoper, RCRA and EPA-accredited Asbestos. During this time, the company gained a majority of market share in Arizona due to the expert safety professionals that bring real world experience to the training and consulting projects. There are 4 staff instructor/consultants and a selection of 10+ vetted contract safety professionals, allowing the company to offer a wide range of compliance services. The Operations Manager and admin staff manage the daily business transactions with little or no input from the owner.
The company operates 2 facilities in Arizona, each with classrooms and staff offices. Open enrollment classes are offered monthly at each location, and the training schedule and registration may be completed online. In addition, approximately 50% of training services are custom “By Request” training conducted on-site at a client’s location. While 90% of clients are in Arizona, the company is seeing an increasing number of requests for services in Mexico, Canada and South America.
Growth can be achieved by marketing and expanding the consulting segment of the business. The business also lends itself to standardization, and a buyer could open more locations or sell instructional material. This is a great opportunity to own a part-time to passive business that works well with a supervisory owner. Increasing involvement can only work to keep sales above the trending $1M mark.Business Highlights
- Years in Business: 24; under current owner for 17
- Service Area: Southern Arizona
- Services: Open enrollment for individuals, custom training & consulting for corporations
- Topic Areas: OSHA, MSHA, DOT, IATA, EPA, ECRA, Asbestos/AHERA, Lead and more
- Building: 2 locations with classrooms and offices – instructors spend 90% of their time training
- Reason for Selling: Retirement
- Employees: Operations Manager, 4 Teachers (W2), 10+ Teachers (1099 contractors as needed), 4 Office staff
- Growth Opportunities: More consulting. Increase work with international clients. Standardization. Online training.
- Current Owner’s Responsibilities: Seller can go weeks without checking in as they live out of state. When in town, owner comes into the office a few times each week to oversee operations. Seller is NOT an instructor.
Financial Highlights
- List Price: $484,000
- Gross Sales:
- 2017 – $1,006,245 Annualized
- 2016 – $974,284
- 2015 – $1,095,068
- Cash Flow:
- 2017 – $122,461 Annualized
- 2016 – $125,800
- Profit Margin: 12%
- Assets Included in the Purchase:
- Equipment: Office furniture, fixtures and equipment
- Intangible Assets: Reputation for quality learning and consulting experience. Majority market share. Proprietary mailing list of 6,300 contacts. Well-developed website. Open enrollment registration and online payment.
- Inventory: The company has produced its own instructional materials
Cash Flow Analysis
| Description of Financial Statement | P&L Statement January - September | Tax Return | Tax Return | Tax Return | Notes |
| 2017 | 2016 | 2015 | 2014 | ||
| GROSS SALES | $754,684 | $974,284 | $1,095,068 | $1,154,188 | |
| Annualized | $1,006,245 | ||||
| Net Income Shown on Financial Statement | $42,844 | $73,764 | $21,199 | $77,669 | |
| ADDBACKS | |||||
| Compensation to Owner | $0 | $14,440 | $0 | $86,504 | |
| 11% Tax on total W2 Salaries | $0 | $1,588 | $0 | $9,515 | |
| Amortization/Depreciation | $25,574 | $8,110 | $0 | $73,920 | Non-onward going |
| Interest | $2,270 | $4,311 | $0 | $2,308 | Non-onward going expense |
| Contributions/Donations | $0 | $18 | $0 | $50 | Non-onward going expense |
| Insurance Premiums for Owners: Health, Life, Auto | $0 | $4,375 | $0 | $4,375 | Owner's insurance premiums expensed through the company |
| Auto-Personal Use | $10,910 | $17,064 | $0 | $16,099 | Personal auto use expensed through company |
| Moving | $0 | $0 | $0 | $3,727 | Company relocated offices in 2014 |
| Travel | $10,248 | $2,130 | $0 | $4,875 | Personal travel expenses |
| TOTAL ADDBACKS | $49,002 | $52,036 | $0 | $201,373 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $91,846 | $125,800 | $21,199 | $279,042 | |
| Annualized | $122,461 | ||||
| Profit Margin | 12.17 % | 12.91 % | 1.94 % | 24.18 % |
- 3-year average Cash Flow of $125,514
Clients
- 600+ clients
- 90% are in Arizona
- Average order is $800
- There is no contract/client that would affect the business if it fell off
- Growing interest for services in Mexico, Canada and South America
Services
Examples of Safety & Environmental Training:
| OSHA | IATA | RCRA |
| HAZWOPER | MSHA | Asbestos |
| DOT | EPA | Lead |
- Over 42,000 have been trained
- Open enrollment classes at both facilities
- Custom training
Examples of Safety & Environmental Consulting:
| Targeted violence security audit | Compliance / training needs assessments |
| Emergency response plan development | Emergency response scenarios / training |
| Ergonomic assessments | Evacuation contingency plans |
| Fire systems analysis | HazCom / GHS compliance |
| Respirator training / fit testing | Risk management plans |
| Safety manual development / review | Safety program & SOP development |
| OSHA site audits & gap analyses | Curriculum development |
| Workplace hazard & risk assessments | Environmental audits |
Custom Training
- 50% of services are customized EHS training for clients based on their requirements and standard operations procedures (SOPs)
- Conducted on-site at client’s location 24/7
- Group pricing
Sample Topics
| Asbestos for Roofer/Transit Pipe | DOT / IATA / Biologicals | Forklift / Aerial lift |
| Accident Investigation | Scaffolding | Lead Awareness |
| HAZWOPER HazMat Technician | Ladder Safety | Slips, Trips & Falls |
| Trenching & Excavation | Work Zone Traffic Safety | Chemical Handling |
Open Enrollment Training
- Wide variety of monthly classes in Tucson and Phoenix
- Certificate of Completion issued to each attendee
- Training documentation, including individual test results
- Reminder postcards for courses requiring refresher training
Sample Courses
| IATA Initial/Refresher | Arc Flash | 24/40-hr HAZWOPER |
| OSHA 10/30-hr General Industry | Asbestos Contractor Supervisor | First Aid / CPR / AED |
| OSHA 10/30-hr Construction | Asbestos Building Inspector | DOT Hazmat Shipping |
| Asbestos Operations/Maintenance | Confined Space | RCRA Initial/Refresher |
| MSHA New Surface Miner | MSHA Annual Refresher | HAZWOPER Refresher |
Locations
- Each location has office space and multiple classrooms
- Corporate has two full-size classrooms – 15, 60 attendees
- Secondary location has 3 classrooms – 10, 45, 75 attendees
- Corporate holds the office staff and has some office space for instructors if needed
- 90% of instructors’ time is spent in the classroom or conducting on-site training
Employees
- Instructors
- 3 W2-employed instructors
- One of the instructors is bilingual and has been working on growing the company’s presence in Mexico, mostly under mine safety training and audits
- 10+ 1099-contracted instructors/consultants
- Of the above contractors, there are a good 5 – 6 regulars
- Operations Manager/Bookkeeper
- Oversees all aspects of the business, allowing the seller to live out of state 50% of the time
- Office Staff
- Inside Sales
- General Administrator
- Website/Marketing Manager
- Also provides document review
- Intern
- Assembles instruction manuals/materials
Growth Opportunities
- Continued development of a rapidly expanding AZ market
- Online training
- Certain classes/materials can be conducted online or through videos, which will aid in reaching more clients outside of Arizona
- More consulting
- This is a lucrative, growing revenue stream that opens up the company to larger markets
- Consulting services were nearly as high through July 2017 as during the whole of 2016
- Increase work with international clients
- The company is already increasing its presence in places like Mexico, Canada and Guatemala
- With sufficient compensation for travel, Mexico and Canada should prove great areas to add more clients
- Standardization
- The company’s materials and services lend themselves well to standardization
- A buyer could consider opening more locations or selling instruction manuals/handbooks
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 Multiplier = Price
Cash Flow is the sum of net income plus any owner perks and non-onward going expenses.
Multiplier is a prescribed number between 1 and 5 determined by a 100-point, 20-question rating system used to determine the business valuation (average is 3).
The Cash Flow for 2016 is $125,800, with a prescribed multiple of 3.85.
With this information, the computation result follows:
$125,800 x 3.85 = $484,300
The List Price for the business is set at $484,000.
Funding Example
Purchase Price: $484,000
10%Buyer Down Payment: $48,400
10%Seller Financing: $48,400
80%Bank Loan: $387,200
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $902.
Bank Loan 7-year term at a rate of 5.25% equals a monthly loan payment of $5,518.
After business expenses and annual loan payments of $77,047, a buyer would retain a net operating income (profit) of $48,753. A 10% down payment of $48,400 results in a 100% return on investment in the first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $484,000 with the terms listed above, the coverage ratio is 1.63.
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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857