List Price: $1,700,000
Owner Profit/Cash Flow
YOY Growth: 20% sales growth from 2014 to 2015
Profit Margin: 10%
Multiple: 4.3 *Multiples range from 1-5, with the average being 3
Valuation: 2015 Cash Flow x Multiple = Price
$396,485 x 4.3 = $1,704,885
Cash flowing close to $400,000 in the online retail market, this web-based children’s store has been established for over 10 years. This company has built a legion of fans, demonstrated by more than 29,000 “likes” on Facebook. 2015 saw impressive sales numbers topping $3.8 million, a 20% increase over the previous year.
At present, 65% of orders are drop-shipped from the vendor and 35% sent from the 4,000 square foot warehouse in the Omaha area. Eight employees handle order intake and shipping while marketing and customer service are outsourced to offsite contractors. Included in the purchase is $69,095 in equipment, $316,208 in inventory and a $31,606 website redesign already in progress.
Generating an average ticket price of $65.58 and targeting a 20-65+ female demographic, the company is well-diversified. Sales come from not only the branded site, but also from several partnership sites.
An incoming Buyer with a 15% down payment would receive a Net Operating Income of $140,403 after all business expenses and loan payments are made.
Assets Included in Purchase: $416,909
Intangible Assets:$31,606 website redesign in progress (already paid for); mailing database that generated $177k of revenue in 2015
Inventory: $316,208 (rotates up to 33x each year)
*amounts may vary
Location: Currently warehoused in Omaha, NE but can be relocated anywhere
Average Daily Site Visits: 5,500
Average Ticket Price: $65.58
Lease: 4,000 square feet @ $2,500/month
Employees: 8: handling orders and shipping
Reason for Selling:Other business ventures
Seller Training Period: Up to 3 months
Growth Opportunities: Partnerships with other sites; use site as a reseller for other entities, build name-brand clothing line
Current Owner’s Responsibilities: Owner runs passively with majority of the time focused on other business; views reports from out-of-town
Purchase Price: $1,700,000
15% Buyer Down Payment: $255,000
10% Seller Financing: $170,000
75% Bank Loan: $1,275,000
This bank loan can be partially collateralized by the hard assets of the business, including $69,095 in equipment and over $300,000 in inventory.
In the above example, an incoming Buyer would receive an annual Net Operating Income (NOI) of $140,403 after all business expenses and loan payments.
For a detailed financial package, please contact Cortney Sells or one of The Firm Business Brokerage’s professionals at 402.998.5288 or email Confidential@TheFirmB2B.com.