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Wedding & Corporate Event Rentals with 26% Profit

Services range from décor, draping, lighting, rentals, back drops and floral!

CASH FLOW
$110,207

Specifications

  • Price
    $218,000

  • Revenue
    $431,043

  • Profit Margin
    26%

  • Cash Flow
    $110,207

  • Multiplier
    2.00

  • Location
    Omaha & Lincoln Area

  • Reason for Sale
    Family

  • Employees
    1 FT Lead Creative Consultant, 1 FT Warehouse Studio Manager, 4 PT employees

  • Intangible Assets
    Excellent reputation, quality social media presence & reviews, meticulous website, features on national wedding websites.

 

The owner of this business lives out of town and works 2-3 days per week! Serving Omaha and Lincoln for 20 years, this company focuses on high end weddings and corporate events with an average event sale range of $7,000-$8,000. This business has a unique ability to create and execute any request including lavish floral arrangements, draping, lighting, center pieces, and back drops. A full time lead creative consultant, warehouse studio manager, and a handful of part time employees ensure no detail is overlooked. The team already has 35 events booked for 2020.

 

A large workshop area, storage facility and a consultation office in a nearby city help this company maintain their excellent reputation. Recommendations from party planners, caterers, and former clients have allowed this company to flourish without active advertising. Over the years, a focus on floral has expanded to achieve an even split between floral, rentals, and design.

 

As seasonality effects all event design companies, the winter months would be a perfect time for a new owner to take this business to the next level. With additional employees & minimal advertising, this company is fit to grow. The owner is willing to train for up to three months. A 15% down payment of $32,700 returns $82,561 in the first year after debt payments!

 

Business Highlights

  • Year Established: 2010
  • Location: Lincoln
  • Service Area: Omaha & Lincoln
  • Demographics: High end wedding & corporate clientele
  • Services: Décor, draping, lighting, event rentals, center pieces, back drops and floral
  • Lease: 1 main warehouse, 1 storage facility, 1 consultation office
  • Reason for Selling: Family
  • Employees: 1 FT Lead Creative Consultant, 1 FT Warehouse Studio Manager, 4 PT employees
  • Seller Training Period: 3 months
  • Growth Opportunities: Advertise, book more events by adding more employees, travel to trade shows
  • Current Owner’s Responsibilities: Works 2-3 days/week, owner lives of out town

Financial Highlights

  • List Price: $218,000
  • Gross Sales:
    • 2019: $431,043
  • Cash Flow:
    • 2019: $110,206
  • Assets Included in Purchase*
    • Equipment: $34,000 in office supplies
    • Inventory: $24,000: Amounts fluctuate by season and event; large fully stocked storage facility with various rentals and props 
    • Intangible Assets: Excellent reputation, quality social media presence & reviews, meticulous website, features on national wedding websites.

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Nov 2018-Sep 2019
P&L Statement
Jan-Dec
Notes
20192019
GROSS SALES$430,689$431,043
Annualized$469,842
Net Income Shown on Financial Statement$114,530$110,207
ADDBACKS
Compensation to Owner$0$0
Other unrelated Salaries$0$0
11% Tax on total W2 Salaries$0$0
Depreciation$0$0
Interest$0$0
Amortization$1,839$0
Meals & Entertainment$0$0
Travel$0$0
TOTAL ADDBACKS$1,839$0
Seller's Cash Flow = Total Addbacks + Net Income$116,369$110,207$126,948 Annualized
Annualized$116,369
Profit Margin27.02 %25.57 %
  • 2019 Profit Margin: 26%

Typical Clients

  • High end wedding clients
  • Corporate clients

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

  • Floral
  • Décor
  • Draping
  • Lighting
  • Event Rentals
  • Center Pieces
  • Back Drops

Employees

  • 1 FT Creative Consultant
  • 1 FT Warehouse Studio Manager
  • 4 PT Employees

Growth Opportunites

  • Advertise
  • Add employees
    • In order to confidently book more events
  • Travel to trade shows
    • Annually in Orlando, Dallas, and Vegas

Valuation Details

The Firm Business Brokerage used a cash flow valuation methodology to determine the purchase price of the business. 

The formula used is as follows:

Cash Flow       x          Prescribed Multiple     =          Fair Market Value

Cash flow is the sum of business net income plus any owner perks and any non-onward going expenses.

A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.

For this business, the 2019 cash flow was used with a prescribed multiple of 2.  With this information, the computation is as follows:

$110,207         x          2          =          $220,414

The fair market value found above positions the business list price at $218,000.

Funding Example

Purchase Price:                                $218,000

15%Buyer Down Payment:           $32,700

15%Seller Financing:                     $32,700

70%Conventional Bank Loan:    $152,600

Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $610.

Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $1,694.

After business expenses and loan payments, a buyer with a 15% down payment of $32,700 would retain a profit of $82,561, which results in a 252% return on investment in the first year.

A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed purchase price of $218,000 with the terms listed above, the coverage ratio is 3.99.

Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available. 

Purchase Price:

$218,000

$
%
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:
2019 Cash Flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
2019 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.