Opportunities
Translation Company with Technical Concentration
Sold
Translating in 50+ languages with an edge in the Japanese market and over 1M in sales!
Specifications
Located in the heart of California this successful translation company provides high quality translation services to customers in the United States and abroad. Whether working on digital marketing or an organizational manual, this quality-oriented company has a dedicated focus to providing customers with accurate translations that correctly convey the intent and the feeling of the project.
Focused on technical rather than personal translation services, this business has services in the areas of translation, localization, interpreting, and digital marketing. This includes work on items such as operations manuals, documents, websites, applications, advertising, and much more. This company has a detailed understanding and a specialized ability to translate software, convert code, and localize user interface applications. Current clients come from the areas of information technology, law, and medical devices. This business is currently operating with 8 employees and over 75 contracted workers and has the capacity to manage several projects with an efficient and effective approach.
This ISO certified business has strong quality control processes in place to ensure customers are provided with useful and meticulous translations. With long standing partnerships with companies located in Japan, these relationships are unique and valuable to the business going forward.
Business Highlights
- Yeas in Business: 40+ years
- Location: California
- Service Area: United States and abroad
- Services: Translation, localization, interpreting, and digital marketing
- Building: Leased 3,500 sq. ft. in beautiful business area with trees and greenery
- Reason for Selling: Retirement
- Employees: 8 employees and 75+ contracted employees
- Seller Training Period: 3-6 months
- Growth Opportunities: Gain European clients, increase legal or medical device clients
- Current Owner’s Responsibilities: Managing staff and overall sales, giving quotes, meet quality requirements, manage Japanese clients
Cash Flow
| Description of Financial Statement | Tax Return | Tax Return | Tax Return | Notes |
| 2016 | 2015 | 2014 | ||
| GROSS SALES | $1,404,159 | $1,597,702 | $1,395,907 | |
| Net Income Shown on Financial Statement | $63,403 | $129,441 | $79,376 | |
| ADDBACKS | ||||
| Compensation to Owner | $120,000 | $120,000 | $120,000 | |
| 11% Tax on total W2 Salaries | $13,200 | $13,200 | $13,200 | |
| Depreciation | $60 | $117 | $117 | |
| Meals & Entertainment | $17 | $86 | $76 | |
| Auto | $3,236 | $2,979 | $2,814 | 25% Personal |
| Pension & Profit Sharing to Owner | $7,200 | $10,800 | $0 | To Owner |
| One Time Cost | $26,480 | $0 | $0 | Redo of Website - Professional Fee |
| Cell Phone | $816 | $816 | $816 | 1 Line $68/month |
| TOTAL ADDBACKS | $171,009 | $147,998 | $137,023 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $234,412 | $277,439 | $216,399 | |
| Profit Margin | 16.69 % | 17.36 % | 15.50 % |
- 3-Year Average Cash Flow used for valuation: $185,693
- 2015-2017
Financial Highlights
- List Price: $742,000
- Gross Sales:
- 2017: $1,101,560
- 2016: $1,404,159
- 2015: $1,597,702
- 2014: $1,395,907
- 3-Year Cash Flow Used in Valuation
- $185,693
- Assets Included in Purchase*
- Equipment: all up-to-date and sate of the art software necessary for operations
- Intangible Assets: 40+ years in the field, edge in Japanese market, reputation for accurate work
*amounts may vary
Clients
Typical clients for this business include companies in the areas of:
- Information technology
- Law firms working in areas of business and intellectual property
- Medical devices
- Biotech
- Pharmaceuticals
- Electronics
- Engineering
- Research
- Education
This business provides excellent and accurate translation services which lend itself to long standing relationships. Though this business has several new clients, they also have many partnerships that have lasted 10 to more than 35 years. This is a testimony to the quality work provided by this company to its clients.
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
Translation
Translating word or text from one language to another.
- Project planning and evaluation
- Linguist provided translation
- Formatting
- Quality assurance
Localization
Applying translations in a local environment such as an application, webpage, or software program
- Project planning and evaluation
- Translation provided by linguists specialized in localization
- Analysis of functionality and aesthetics
- Quality assurance
Interpreting
Translating language in real time
- Project planning and evaluation
- Consecutive interpreting
- Simultaneous interpreting
- Webcast interpreting
- Large and small events
- Events can include: conferences, meetings, courtroom, etc.
Digital Marketing
Translating and applying translations to digital marketing pieces
- Project planning and evaluation
- Translation provided by linguists specialized in digital marketing
- Ensure clear translation not only of language, but of emotional intent
- Quality assurance
Items Frequently Translated
- Manuals
- User Guides
- Documents: PDF, Word, Excel, etc.
- InDesign projects
- Software code conversion
- Websites
- Website code conversion
Growth Opportunities
- Grow the European market
- This business currently does translations in languages used throughout Europe, but a new owner could focus on gaining clients located on the European Continent
- Seek out additional clients in the legal field
- Seek out additional clients in the medical device field
- With an ever-increasing globalization of services, growth is only limited to the buyer’s desire. The team in place is ready to grow and take on new clients and translating challenges.
- Expanding services into hospitals
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 3-Year Average Cash Flow was used with a prescribed multiple is 4. With this information, the computation is as follows:
$234,412 x 4 = $742,772
The Fair Market Value found above positions the business List Price at $742,000.
Funding Example
Purchase Price: $742,000
12.5%Buyer Down Payment: $92,750
12.5%Seller Financing: $92,750
80%Bank Loan: $556,500
Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,729.
Bank Loan 7-year term at a rate of 6% equals a monthly loan payment of $8,130.
After business expenses and loan payments, a buyer with a 10% down payment of $92,750 would retain a profit of $67,387 which results in a 73% 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 $742,000 with the terms listed above, the coverage ratio is 1.57.
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