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IT Management Company with $240K in RMR

39 fully trained employees, including 4 admin staff!

CASH FLOW
$1,280,000

Specifications

  • Price
    $4,480,000

  • Revenue
    $16,000,000

  • Cash Flow
    $1,280,000

  • Location
    Twin Cities

  • Service Area
    Local (75%), regional (10%), and national (15%)

  • Reason for Sale
    Looking to grow the company by leveraging areas out of the owner’s expertise

  • Employees
    39 FT W2 employees; 4 Admin, 6 in Operations, 10 in Sales, 19 in Service

  • Intangible Assets
    Strong recurring client base, word-of-mouth referrals, well-established in the industry & region

  • Equipment
    $161,000

With $240k in recurring monthly revenue and an average sale size of nearly $1.7M, this IT management company has been established in the Twin Cities area for nearly 30 years! Serving clients locally (75%), regionally (10%), and nationwide (15%), this business offers a variety of technology services & products. Services include technology lifecycle management, IT staffing, cloud solutions, data storage, data security & remote access, and web services; they also provide new & re-certified equipment from leading manufacturers, as well as sales, repair, maintenance, and installation of windows desktops and servers. A highly-skilled team of 39 employees consists of 6 in Operations, 4 in Admin, 10 in sales, and 19 in the service department. They cater to each customer’s specific needs for their company and implement customized IT solutions and services. Clients are in a variety of industries such as education, financial, healthcare, insurance, and manufacturing; of their 450+ clients, 288 of them purchase $1k or more per year, 122 of them purchase $10k or more, and 24 purchase $100k or more annually. 2021 is on track to be a record year for this business, as the remote workforce is now entrenched in the workplace – this business will see double digit growth for the foreseeable future.  

 

Based out of an 18k sq. ft. building, 9,000 sq. ft. is used for warehouse/production space, while 4,500 sq. ft. is office space; the remainder is rented by tenants. Assets include $161k of equipment – PC’s, notebooks, servers, SAN’s, network gear, warehouse equipment, and office furniture & fixtures. The current owner handles HR, Finance, AP, AR, policies & procedures, and contracts, and is willing to stay on board for 1-3 years to help grow the company.

 

Priced at $4,480,000, this business already has a strong recurring client base, word-of-mouth referrals, and an extremely well-established name in the industry and the region. Marketing is the key to organizational growth; better SEO, email campaigns, lunch & learns, etc. would generate more client interest and boost revenue.

 

Business Highlights

Year Established: 1992

Location: Twin Cities

Service Area: Local (75%), regional (10%), and national (15%)

Services: Managed IT services, lifecycle management, IT staffing, cloud solutions, data storage, data security & remote access, web services, assistive & adaptive technology, providing hardware & software, sales, repair, maintenance, &  installation of windows desktops & servers

Clients: Companies in a variety of industries: Education, Financial, Healthcare, Insurance, & Manufacturing

Lease: 18k sq. ft. building; 9k is warehouse/production space, 4.5k is office space (7 offices, 2 meeting rooms); the remainder is rented by tenants – Rent is $12k/month

Reason for Selling: Looking to grow the company by leveraging areas out of the owner’s expertise

Personnel: 39 FT W2 employees; 4 Admin, 6 in Operations, 10 in Sales, 19 in Service

Seller Training Period: 1-3 years

Growth Opportunities: Generate more client interest through better SEO, email campaigns, lunch & learns, etc.

Current Owner’s Responsibilities: HR, Finance, AP, AR, policies & procedures, contracts

Financial Highlights

  • List Price: $4,480,000
  •  

    • Projected Cash Flow: $1,280,000
    • Estimated Working Capital: $500k

Business Assets

Assets: $161,000

Equipment: $161,000: PC’s ($40k) Notebooks ($18k), Servers ($45k), SAN ($18k), Warehouse Equipment ($15k), Furniture & Fixtures ($25k)

Software: ConnectWise, Kaseya, QuickBooks, Enterprise, VarStreet

Backlog: $2,550,000

Pipeline: $1M

Intangible Assets: Strong recurring client base, word-of-mouth referrals, well-established in the industry & region

Cash Flow Analysis

Description of Financial StatementP&L Statement
Accrual
Tax Return
Accrual
Tax Return
Accrual
Tax Return
Accrual
Notes
2021202020192018
GROSS SALES$11,175,739$13,040,267$13,683,103$9,150,654
Annualized$13,410,887
Net Income Shown on Financial Statement$681,317$168,566$167,706$112,726
ADDBACKS
Compensation to Owner$80,400$122,539$108,304$124,510Owner
Other unrelated Salaries$80,480$100,000$100,000$100,000Owner's Spouse
11% Tax on total W2 Salaries$17,697$24,479$22,913$24,696
Depreciation$0$0$5,000$0
Amortization$0$11,201$8,401$0
Meals & Entertainment$2,881$13,282$14,154$10,558Personal expense
Interest$400$0$0$0
Contibutions$200$0$0$0Discretionary expense
Owner's Health Insurance$8,333$10,000$10,000$10,000$10k/year for personal coverage
Life & Disability Insurance$17,357$16,367$17,857$16,958Paid for owners
Cell Phone$4,000$4,800$4,800$4,800$400/month for personal lines
Owner's Travel$3,333$0$4,000$4,000Personal expense
Pension/Profit Sharing$4,826$26,000$26,000$26,000$13K each per year
Replacement Cost$-75,000$-90,000$-90,000$-90,000Only need to replace 1 owner
Credit Card Charges$20,000$24,000$24,000$24,000Personal expense
Owner's Professional Fees$0$50,000$22,845$0Legal expenses due to case - non-onward going
Owner's Repairs & Maintenance$10,000$23,920$23,790$14,100Personal expense
TOTAL ADDBACKS$174,907$336,588$302,064$269,622
Seller's Cash Flow = Total Addbacks + Net Income$856,224$505,154$469,770$382,348
Annualized$1,027,469
Profit Margin7.66 %3.87 %3.43 %4.18 %
  • Covid resulted in a small dip in 2020, less than 5%. 2021 is on track to be a record year.

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210 N 78th St. 2nd Floor
Omaha, NE 68114

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The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.