Opportunities
Furniture Procurement and Installation for Education & Healthcare
Well-established in Pennsylvania – owner only works 20 hours per week!
Specifications
Well-established in Pennsylvania for over 30 years, this business already has a highly talented Business Manager in place, allowing the owner to only work 20 hours per week! This furniture procurement & installation company provides high-demand furnishings to meet social distancing guidelines for schools, offices, and healthcare facilities. With over $16M in revenue in 2019, this company is widely known for their creations of innovative spaces. Along with the Business Manager, the experienced team also includes 6 Designers, 2 Project Managers, 3 Installers, 7 sales staff, and one person in customer service/office administration. They work both in the office and remotely, partnering with numerous manufacturers to bring their clients exactly what they’re looking for in a creative work environment. Sample showroom pieces comprise their low inventory.
With three impressive showrooms in the Harrisburg area, their vast array of products include seating, desks, tables, classroom furniture (for K-12 and higher education), architectural space (walls, glass enclosures, panels, screens, flooring & rugs) and work tools (whiteboards, podiums, ergonomic office tools, lighting).
Priced at $3,900,000, a 12.5% down payment of $487,500 returns $808,507 in the first year after debt payments – a 166% return on investment! Year-over-year growth since 2017 proves they have a strong client base and remarkable word of mouth advertising. Adding online sales, increasing social media presence, and optimizing the SEO are all areas that would add tremendous growth to the company.
Business Highlights
- Year Established: 1989
- Location: Harrisburg, Pennsylvania
- Service Area: Primarily within Pennsylvania with some clients in Maryland and Delaware
- Clients: Educational facilities (65%), general commercial, and healthcare (10%)
- Services: Furniture dealer: layout and installation
- Lease: 3 showrooms: Location 1: 5,000 sq. ft. showroom/office + 10,000 sq. ft. warehouse + 4 docks; Location 2: 1,200 sq. ft. showroom; Location 3: 4,000 sq. ft. showroom
- Reason for Selling: Retirement
- Personnel: 20: 6 Designers (5 FT, 1 PT), 2 Project Managers, 1 Business Manager, 3 installers, 7 sales staff, 1 admin
- Seller Training Period: 1 year if desired
- Growth Opportunities: Add online sales, social media, optimize SEO
- Current Owner’s Responsibilities: Only works 20 hours/week; there is a highly talented business manager in place
Financial Highlights
- List Price: $3,900,000
- 2020 Annualized Cash Flow: $1,745,706
- A/R: $1,931,146
- A/P: $1,515,547
*amounts may vary
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-Aug2020 | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2020 | 2019 | 2018 | 2017 | 2016 | ||
| GROSS SALES | $8,249,245 | $16,283,679 | $13,700,427 | $7,073,730 | $9,141,546 | |
| Annualized | $12,373,868 | |||||
| Net Income Shown on Financial Statement | $1,076,312 | $664,028 | $385,591 | $27,569 | $330,811 | |
| ADDBACKS | ||||||
| Compensation to Owner | $87,750 | $154,558 | $268,823 | $231,395 | $211,671 | |
| 11% Tax on total W2 Salaries | $17,001 | $17,001 | $29,570 | $25,453 | $23,283 | |
| Depreciation | $5,160 | $81,516 | $104,502 | $24,491 | $22,071 | |
| Interest | $2,556 | $8,155 | $9,893 | $979 | $3,152 | |
| Meals & Entertainment | $3,012 | $7,865 | $10,621 | $8,591 | $12,451 | |
| Contributions/Donations | $2,100 | $0 | $0 | $0 | $0 | |
| Officer's Life Insurance | $2,531 | $3,797 | $3,797 | $3,797 | $3,797 | |
| Owner's Auto | $14,591 | $18,569 | $12,221 | $9,181 | $9,922 | |
| Travel | $1,064 | $2,309 | $7,643 | $2,165 | $1,840 | |
| Country Club | $5,060 | $8,643 | $12,014 | $13,608 | $11,121 | |
| Replacement | $-53,333 | $-80,000 | $-80,000 | $-80,000 | $-80,000 | |
| TOTAL ADDBACKS | $87,492 | $222,413 | $379,084 | $239,660 | $219,308 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $1,163,804 | $886,441 | $764,675 | $267,229 | $550,119 | |
| Annualized | ||||||
| Profit Margin | 14.11 % | 5.44 % | 5.58 % | 3.78 % | 6.02 % |
Clients
- Education (K-12 and Higher Ed)
- Corporations
- Healthcare Facilities
- Contracts:
- COSTARS
- GSA
- MedAssets
- Novations
- PA State Contract
- U.S. Communities
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
Services
- Furniture supply, design, delivery, and installation
- Space Planning
- Project Management
- Product Inventory
- Inter-Market Installs
- Bid Preparation
- Cost Analysis
Software Used
- TeamDesign
- CET
- AutoCAD
Personnel
- 1 Business Manager
- 6 Designers
- 5 FT, 1 PT
- 2 Project Managers
- 3 Installers
- More subcontracted out for larger projects
- 7 Sales Staff
- 1 Admin
Growth Opportunities
- Add online sales
- Increase social media presence
- Optimize SEO
Valuation
Funding Example
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: 2 Yr. Avg. ('19-'20) Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2 Yr. Avg. ('19-'20) 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: | % |
Attachments
| Document Title / Description |
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210 N 78th St. 2nd FloorOmaha, NE 68114
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