Opportunities
Fully Staffed Childcare with Consistent Profit
Sold
Specifications
Daycare in neighboring county of Nebraska with sales of over $560,000 for 2015 & 2016. This large 6,300 sq./ft. facility for $3,500/month provides enough room for an enrollment of 90 currently – less than 30% being Title XX and a capacity of 110 kids!
This daycare does not only come with 90 kids enrolled but also a director, 20 fully trained, knowledgeable, and experienced staff members to assist with a smooth transition. The current Owner is selling due to the need to move out of state.
Being in business for over 8 years has provided the business with a strong name recognition in the community as well as providing strong and continuously growing Sales year over year. With the opportunity to grow the business even more as there are currently 20 open spots available for enrollment.
With a Cash Flow of $117,807 in 2016, a new Owner would have a Return on Investment (original down payment of $53,000) of 151%! The Buyer would have a Net Operating Income (Profit) of $80,154 after all expenses including loan payments are paid.
Business Highlights
Been in business for 8+ years servicing Platte County, Nebraska
Employees: 20 Fully Trained & Knowledgeable Team with Director in Place
Enrollment: Currently 90 [less than 30% Title XX]
Capacity: 110
Growth Opportunities: Room for 20 more kids to enroll which would grow sales tremendously
Current Owner’s Responsibilities: Owner is Currently Passive as there is a Director in place.
Strong name recognition in the community
Financial Highlights
List Price: $265,000
Gross Sales
2016: $561,343 (Annualized)
2015: $560,655
2014: $499,542
Owner Profit/Cash Flow
2016: $117,807 (Annualized)
2015: $109,069
2014: $107,849
Profit Margin: 21%
Multiple: 2.25
Recasted Cash Flow Analysis
| Description of Financial Statement | P&L Statement January - November | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2016 | 2015 | 2015 | 2014 | 2013 | ||
| GROSS SALES | $514,564 | $560,655 | $560,655 | $499,542 | $450,478 | |
| % Change Over Prev. Year | -8.22 % | 12.23 % | 12.23 % | 10.89 % | ||
| Annualized | $561,343 | |||||
| Net Income Shown on Financial Statement | $12,540 | $12,181 | $12,181 | $26,164 | $2,838 | |
| ADDBACKS | ||||||
| Compensation to Owner | $72,510 | $68,860 | $68,860 | $63,679 | $59,478 | Addback for Owner Operator |
| 11% Tax on total W2 Salaries | $7,976 | $7,575 | $7,575 | $7,005 | $6,543 | |
| Depreciation | $0 | $0 | $0 | $1,437 | $1,696 | Non Cash Item |
| Interest | $125 | $7 | $7 | $185 | $0 | |
| Contributions/Donations | $1,567 | $0 | $0 | $0 | $0 | |
| Subscriptions | $939 | $1,408 | $1,408 | $919 | $631 | |
| Non-Business Telephone | $3,300 | $3,600 | $3,600 | $3,600 | $3,600 | $300/month for 2 Personal cell phones |
| Insurance Premiums for Owners: Health, Life, Auto | $7,296 | $8,471 | $8,471 | $7,400 | $8,016 | Personal Health Insurance for Owner |
| Retirement Plan | $0 | $5,878 | $5,878 | $6,208 | $6,001 | |
| Travel | $0 | $92 | $92 | $0 | $0 | |
| Meals & Entertainment | $793 | $538 | $538 | $1,910 | $1,549 | |
| Auto-Personal Use | $944 | $459 | $459 | $242 | $494 | |
| Rent Adjustment | $0 | $0 | $0 | $-10,900 | $-14,400 | Rent set for New Owner of $3,500/month |
| TOTAL ADDBACKS | $95,450 | $96,888 | $96,888 | $81,685 | $73,608 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $107,990 | $109,069 | $109,069 | $107,849 | $76,446 | |
| Annualized | $117,807 | |||||
| Profit Margin | 20.98 % | 19.45 % | 19.45 % | 21.59 % | 16.97 % |
Consistent Sales of over $560,000 in 2015 & 2016
Average Profit Margin of 20%
Over $100,000 Profit consistently for 3 years
Assets Included: $38,035
Equipment: $36,035 – including cribs, toys, desks, chairs, security system, etc.
Inventory: $2,000 – including art supplies, paper, ink, etc.
*amounts may vary
Funding Example
Purchase Price: $265,000
20%Buyer Down Payment: $53,000
10%Seller Financing: $26,500
70%Bank Loan: $185,500
Seller Financing 5 year term at a rate of 4.5% equals a monthly loan payment of $494
Bank Loan 7 year term at a rate of 5.25% equals a monthly loan payment of $2,644
After business expenses and loan payments, a buyer with a down payment of $53,000 would retain a profitable net operating income of $80,154 which results in a 151% 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 $265,000 with the terms listed above, the coverage ratio is 3.13
**Please note that the decision of whether to extend a loan on any particular sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
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 annualized is $117,807. The prescribed multiplier is 2.25
With this information, the computation result follows:
$117,807 x 2.25 = $265,065
The List Price for the business is set at $265,000
Enclosed
Business Summary
Identifies important business information in an organized quick-reference format
Recasted Profitability Statement
The owner’s profit is the sum of business net income + any owner’s perks & any non-onward going expenses (cash flow)
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857