Network Management with IT Solutions and Service

Sioux City, IA (Woodbury County)

Seller Financing Available
Network Management with IT Solutions and Service

Asking Price:$708,000

Cash Flow:$208,469

Gross Revenue:$1,267,227





Network Management with IT Solutions and Service

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Business Description

Network Management with Support and Cloud Service makes this business invaluable to a wide range of clients. For more than 20 years the business has been offering services including cloud migration, design, implementation and support for new technology systems and continuing consultation.

Client size ranges from smaller systems (1 server with 5-25 workstations) to data centers with virtual services and 50+ workstations; and include law firms, printing companies, municipalities and service-based businesses within a 100 mile radius of Sioux City. The business sees an average of 10-15 new clients per year; with an increase of 25 new clients since adding sales staff in November 2015.

The current owner is willing to not only offer transition time, but help expand the business by offering consulting services to a new owner. There are growth opportunities in marketing and sales (which have increased since hiring a salesperson in November 2015), telephony opportunities and moving clients to service contracts rather than T&M basis.

The current owner owns the business property, and is willing to lease the property for $1,000 per month or sell the property in a separate transaction.

With a down payment of $70,800, a new owner could realize a Net Operating Income of $90,168, which is a 127% Return on Investment in the first year!

Business Information
Service Area: 100 mile radius of Sioux City

Services Offered: Cloud migration, design, implementation and support of new technology systems, consultation services

Client Mix: Law firms, printing companies, municipalities, service based businesses; average 10-15 new clients per year

Demographics: Serves clients ranging from one server locations to large data center clients with multiple servers

Employees: 2 administration, 2 project managers (partially billable), and 5 Consultants

Growth Opportunities: Increased marketing and sales, telephony opportunities including consulting, moving clients to contracts instead of a T&M basis

Current Owner’s Responsibilities: Administrative and accounting support

Financial Overview
List Price: $708,000
Gross Sales
2015: $1,267,227
2014: $1,117,344

Owner Profit/Cash Flow
2015: $208,469
2014: $163,296

Profit Margin: 16%

Multiple: 3.4*Multiples range from 1-5, with the average being 3

Valuation: [2015] Cash Flow x Multiple = Price
$208,469 x 3.4 = $708,794

Assets Included in Purchase: $113,575

Equipment: $4,675
3 office servers, 3 data center servers, 2 switches, 2 firewalls, 9 Avaya phones, 3 printers, furniture
Intangible Assets: Strong relationships with vendors and customers, website

A/R and Work in Progress: $108,900
1-30 Days: $83,000; 30-60-Days: $12,500, 60-90 Days: $11,400
90+ Days: $2,000

*amounts may vary

Funding Example
Purchase Price: $708,000
10% Buyer Down Payment: $70,800
25% Seller Financing: $177,000
65% Bank Loan: $460,200

With a $70,800 down payment, a new owner can expect to make $90,168 after loan payments and expenses. This is a 127% return on investment in the first year of ownership.

Attached Documents

Detailed Information

Furniture, Fixtures, & Equipment (FF&E):
Included in asking price
Building /Lease: willing to lease to new owner for $1,000 per month or to sell in a separate transaction
Growth & Expansion:
Increased marketing and sales, telephony opportunities including consulting, moving clients to contracts instead of a T&M basis
25% (=$177,000)
Support & Training:
90 days with possible transition to Consultant for 2 years, if so desired
Reason for Selling:
Retirement Strategy

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Cortney Sells

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Cortney Sells

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