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Network Infrastructure Services & Hardware/Software Sales

With a 42% profit margin and over $11k in recurring monthly revenue!

CASH FLOW
$369,249

Specifications

  • Price
    $930,000

  • Revenue
    $581,585

  • Cash Flow
    $369,249

  • Location
    Salt Lake County, Utah

  • Service Area
    Local (85%), regional (5%), and national (10%)

  • Profit Margin
    42%

With over $11k in recurring monthly revenue, this Salt Lake Metro area IT company had a 42% profit margin in 2020! Along with providing network infrastructure services, this company also provides the necessary equipment and software their clients need: servers, storage, workstations, security software, virtualization software, etc. Services include firewall implementation & management, endpoint security, ransomware protection, data protection, disaster recovery, business continuity, instant virtualization, and proactive endpoint monitoring and management. The company utilizes specialized software, such as Datto RMM, Datto, BCDR, Autotask PSA, Auvik, Lionguard Scale Computing, DataCore, Windows, Citrix Apps, Citrix Hypervisor, Citrix ADC, and Sophos Central Endpoint. The company boasts high profit margins and has seen year-over-year growth in sales since 2018. In 2020, sales of goods and SaaS accounted for 41% of business while human labor services accounted for 59%.

 

The owner handles the day-to-day operations, while the two part-time 1099 employees assist with technology health checks, running weekly & monthly reports for clients, adding content to the website, and helping with quotes. The business is run from a home office or on site at client locations; no commercial office space is needed.

 

Priced at $930,000, a 10% down payment of $93,000 returns $158,221 in the first year after debt payments – a 170% return on investment! With a solid customer base intact and an abundance of documentation on each client, a transition would be seamless for an already existing IT management company that is looking to grow the own client list and revenue.

Business Highlights

Year Established: 2015

Location: Salt Lake County, Utah

Service Area: Local (85%), regional (5%), and national (10%)

Services: Provide network infrastructure services and equipment sales (servers, storage, workstations, security software, virtualization software)

Clients: Businesses & corporations seeking IT assistance

Lease: Business is run from owner’s home office; no commercial space needed

Reason for Selling: Pursuing other business interests

Personnel: 1 FT (Owner) + 2 part-time 1099

Seller Training Period: 6-12 months

Intangible Assets: Long-standing relationships with client & vendors, solid reputation for customer service

Growth Opportunities: Increase client base; excellent opportunity for existing IT Management company

Current Owners’ Responsibilities: Day-to-day operations of the business: various projects, meetings with clients, etc.

Financial Highlights

  • List Price: $930,000

  • 2021 Annualized Cash Flow: $369,249
  • 2020 Cash Flow: $203,872
  • 2019 Cash Flow:  $104,695

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Jan-Oct 19, 2021
Tax Return
Cash
Tax Return
Cash
Tax Return
Cash
Notes
2021202020192018
GROSS SALES$459,330$482,973$296,913$186,222
Annualized$582,565
Net Income Shown on Financial Statement$270,342$171,418$104,287$114,154
ADDBACKS
Interest$0$11$0$0
Depreciation$0$30,976$0$0
Meals$20,797$1,467$408$319
TOTAL ADDBACKS$20,797$32,454$408$319
Seller's Cash Flow = Total Addbacks + Net Income$291,139$203,872$104,695$114,473
Annualized
Profit Margin63.38 %42.21 %35.25 %61.47 %
Profit Margin: 42%

Valuation

Funding Example

Purchase Price:

$930,000

$
%
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:
2-year average 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-year average 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: %

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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.