Wedding & Corporate Event Rentals with 26% Profit
Services range from décor, draping, lighting, rentals, back drops and floral!
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!
- 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
- 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 Statement||P&L Statement|
Nov 2018-Sep 2019
|Net Income Shown on Financial Statement||$114,530||$110,207|
|Compensation to Owner||$0||$0|
|Other unrelated Salaries||$0||$0|
|11% Tax on total W2 Salaries||$0||$0|
|Meals & Entertainment||$0||$0|
|Seller's Cash Flow = Total Addbacks + Net Income||$116,369||$110,207||$126,948 Annualized|
|Profit Margin||27.02 %||25.57 %|
- 2019 Profit Margin: 26%
- High end wedding clients
- Corporate clients
Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.
- Event Rentals
- Center Pieces
- Back Drops
- 1 FT Creative Consultant
- 1 FT Warehouse Studio Manager
- 4 PT Employees
- Add employees
- In order to confidently book more events
- Travel to trade shows
- Annually in Orlando, Dallas, and Vegas
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.
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.
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: $
|Monthly Payment to Bank:||$|
|Yearly Payment to Bank:||$|
|Monthly Payment to Seller:||$|
|Yearly Payment to Seller:||$|
|Total Monthly Debt Service:||$|
|Total Yearly Debt Service:||$|
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
2019 Cash Flow
|Annual Debt Service:||$|
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
2019 Cash Flow
|Annual Debt Service:||-$|
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
|Document Title / Description|
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