Opportunities
IT Management Company with $240K in RMR
Sold
39 fully trained employees, including 4 admin staff!
Specifications
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 Statement | P&L Statement Accrual | Tax Return Accrual | Tax Return Accrual | Tax Return Accrual | Notes |
| 2021 | 2020 | 2019 | 2018 | ||
| 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 | $124,510 | Owner |
| Other unrelated Salaries | $80,480 | $100,000 | $100,000 | $100,000 | Owner'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 | $10,558 | Personal expense |
| Interest | $400 | $0 | $0 | $0 | |
| Contibutions | $200 | $0 | $0 | $0 | Discretionary 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 | $16,958 | Paid 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 | $4,000 | Personal expense |
| Pension/Profit Sharing | $4,826 | $26,000 | $26,000 | $26,000 | $13K each per year |
| Replacement Cost | $-75,000 | $-90,000 | $-90,000 | $-90,000 | Only need to replace 1 owner |
| Credit Card Charges | $20,000 | $24,000 | $24,000 | $24,000 | Personal expense |
| Owner's Professional Fees | $0 | $50,000 | $22,845 | $0 | Legal expenses due to case - non-onward going |
| Owner's Repairs & Maintenance | $10,000 | $23,920 | $23,790 | $14,100 | Personal 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 Margin | 7.66 % | 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.
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857