Upscale Magazine For Sale with Existing Ad Contracts

1299

Publication for the Colorado Springs area is now available for
acquisition. The owner has made almost $100,000 in profit
annually each of the last four years with an 8.4% increase since
2013! This business is supported financially by ad sales to the
tune of $356,633 in 2015. 90% of the 58 companies advertising
in the publication are on 12 month contracts.
The current owner lives out of town working remotely for
approximately 5 hours each week and is selling due to
divestment. An owner who is local or has a vested interest in the
Colorado Springs area would have unlimited growth
opportunities simply by being involved in the community.
Printing, national editorial columns and graphic design is done
through a central office, so an incoming owner would focus on
oversight and local ad sale. Office space located in the city runs
only $700/month for a lease, with $5,000 in office equipment,
software and furnishings included in the purchase price of the
business.
The magazine currently employs the owner, one full-time
salesperson and one part-time operations manager. Four or five
stories focusing on businesses local to Colorado Springs are
written by one of the 1099 subcontractors who interview and
write the stories. Distribution is scheduled through the office to
deliver magazines to 620+ business locations and mailed to 1,600
doctors, dentists and beauty salon/spa waiting rooms in the
Colorado Springs area.
With no salesperson, a buyer’s net profit after loan payments and
business expenses would be a Net Operating Income (NOI) of
$67,528 each year. Based on a down payment of $59,000 (20%
of the purchase price), this is a 114% return on investment (ROI).
With one salesperson, a buyer’s net profit after loan payments
and business expenses would be a Net Operating Income (NOI)
of $42,693 each year. Based on a down payment of $59,000 (20%
of the purchase price), this is a 63% return on investment (ROI).

Financial Overview
List Price: $295,000
Gross Sales
2015: $356,633
2014: $335,833
Owner Profit/Cash Flow
2015: $80,100 [No Salesperson: $110,221]
2014: $65,670 [No Salesperson: $96,518]
2013: $63,588 [No Salesperson: $92,744]
Profit Margin: 37%
Multiple: 3 *Multiples range from 1-5, with the average being 3
Valuation: 2015 Cash Flow x Multiple = Price
$110,221 x 3 = $330,663

Assets Included in Purchase: $28,755
Equipment: $5,000 in office equipment including 3 Apple computers,
two printers and complete package of office furniture, software
Intangible Assets: Existing ad contracts, complete printing and
distribution network, full training and support from Seller
A/R: $23,755
*amounts may vary

Funding Example
Purchase Price: $295,000
20% Buyer Down Payment: $59,000
15% Seller Financing: $44,250
65% Bank Loan: $191,750
In the above example, with no salesperson, a buyer’s net profit
after loan payments and business expenses would be a Net
Operating Income (NOI) of $67,528 each year. Based on a down
payment of $59,000 (20% of the purchase price), this is a 114%
return on investment (ROI).
In the above example, with one salesperson, a buyer’s net profit
after loan payments and business expenses would be a Net
Operating Income (NOI) of $42,693 each year. Based on a down
payment of $59,000 (20% of the purchase price), this is a 63%
return on investment (ROI).
Business Information
Year Established: 2004
Location and Service Area: Colorado Springs
Number of Clients: 58 advertisers - 90% have 12-month
contracts
Distribution: Hand-delivered to 620+ locations, mailed to
1,600 doctors, dentists and beauty salon waiting rooms
Lease: Only $700/month for office space
Reason for Selling: Divestment; currently being run absentee
Employees: 1 FT Salesperson, 1 PT Operations Manager;
freelance writers (1099)
Non-Paid Seller Training Period: 90 days of training
Growth Opportunities: Owner in city selling ad space and
maintaining relationships
Current Owner’s Responsibilities: Works 5 hours remotely
new owner-operator would work part-time in Co Springs

Facilities:

Only $700/month for office space; could easily be home-based or housed within another office

Growth Potential:

Owner in city selling ad space and maintaining relationships

Training/Support:

3-6 months

Seller Financing:

15%

Sale Reason:

Divestment; currently being run remotely from out of town