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In-Home Health Care in Southeast Iowa--95% Referral Rate

With a 5-star Medicare rating!

CASH FLOW
$80,966

Specifications

  • Price
    $260,000

  • Revenue
    $755,095

  • Cash Flow
    $80,966

  • Equipment
    $63,494

  • Multiplier
    3.22

  • Location
    Southeast Iowa

  • Service Area
    9 counties in Iowa: Henry, Johnson, Washington, Jefferson, Louisa, Muscatine, Des Moines, Lee, and Van Buren

  • Employees
    28 (23 FT, 5PT): 1 FT Business Administrator, 1 FT Office Manager, 1 FT Office Assistant, 1 FT Clinical Manager, 1 PT Care Manager, 2 FT Field Nurses, 1 PT Field Nurse, 5 FT Home Health Aides, 3 PT Home Health Aides, 12 W2 Independent Therapists

  • Inventory
    $15,500

This private and locally owned home health care agency is 95% referral based and has a 5-star Medicare rating! They provide a variety of in-home care services like hygiene assistance, diet monitoring, housekeeping, errands, caring companionship, respite care, chronic and acute medical problems, post-surgical, and physical and speech therapy. Serving patients from pediatric to geriatric, this company is certified by the State of Iowa for Medicare and Medicaid and their 5-star Medicare rating proves excellence from member satisfaction surveys, plans, and health care providers. With the current owner involved in 1% of the business operations and administrative work, the administrator handles the majority the operations. The company has 28 qualified and trained personnel with a full-time business administrator, office manager, office assistant, and clinical manager, along with 2 full-time field nurses, 5 full-time home health aides, and 12 full-time W2 independent therapists. They also have a part-time care manager and field nurse with 3 part-time home health aides.

 

Serving 9 counties in Southeast Iowa, this company provides coverage for workman's comp claims and private pay and, for a client’s convenience, directly bill to their insurance company. They provide a safe, compassionate, innovative health care community that listens, learns, and responds collaboratively with patients, while maintaining a culture of care.

 

This business currently does not have active marketing, due to the already high capacity of patient care. A new owner could expand the service area and increase clientele with marketing and the hiring of more staff. There is also growth in the private sector. It is an area that is quite profitable when utilized correctly as there are no Medicare, CHAP, Medicaid rules and regulations to follow. This is for non-skilled services or contracted services. This decreases the overhead and workload for the nurses and office.At the price of $260,000, a 10% down payment of $26,000 returns $47,439 in the first year after debt payments resulting in a 182% return on investment!

Business Highlights

  • Revenue: $755,095
  • Cash Flow: $80,966
  • Year Established: 2014 
  • Location: Southeast Iowa
  • Service Area: 9 counties in Iowa: Henry, Johnson, Washington, Jefferson, Louisa, Muscatine, Des Moines, Lee, and Van Buren. 
  • Clients: Any individual, of any age, in need of in-home care
  • Services: In-home care—hygiene assistance, diet monitoring, housekeeping, errands, caring companionship, respite care, chronic and acute medical problems, post-surgical, physical and speech therapy, etc.
  • Employees: 30 (24 FT, 6PT): 1 FT Business Administrator, 1 FT Office Manager, 1 PT Office, 1 FT Clinical Manager, 1 PT Care Manager, 2 FT Field Nurses, 1 PT Field Nurse, 6 FT Home Health Aids, 3 PT Home Health Aids, 13 FT Therapists
  • Reason for Selling: Divestment
  • Seller Training Period: Up to 6 months

Financial Highlights

  • List Price: $260,000

 

  • Cash Flow: $80,966
  • Assets: $75,000+
    • Vehicles: $53,494 – 8 Total 
    • Equipment: $10,000 –  supplies, dressings, home bags, etc.
    • Office Inventory: $15,500 –  computers, desks, file cabinets, office furniture, etc.

 

*See additional asset information in the attachments

Cash Flow Analysis

Description of Financial StatementP&L StatementTax ReturnP&L StatementP&L StatementNotes
2020201920182017
GROSS SALES$755,095$696,879$656,518$899,641
Net Income Shown on Financial Statement$4,534$-16,057$-65,155$64,732
ADDBACKS
Compensation to Owner$82,691$80,000$75,400$75,400
11% Tax on total W2 Salaries$9,096$8,800$8,294$8,294
Depreciation$0$1,052$34,146$23,018
Interest$345$9,900$11,497$7,324
Meals & Entertainment$506$278$0$0
Cell Phone$1,461$1,461$1,461$1,461
Amortization $0$2,398$0$0
Employee Benefit (Retirement) $1,508$1,508$2,398$2,398
COVID Income$-19,175$0$1,508$1,508
TOTAL ADDBACKS$76,432$105,397$134,704$119,403
Seller's Cash Flow = Total Addbacks + Net Income$80,966$89,340$69,549$184,135
Profit Margin10.72 %12.82 %10.59 %20.47 %
 

Valuation

Funding Example

Purchase Price:

$260,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

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:
2020 Cash flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2020 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

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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.