1. Home
  2. Google Sheet
  3. Buy a Business v2.1

Buy a Business v2.1

An interatctive finance template for calculating the profitability of buying out a business. - Sourceful

accounting, finance, buyout, template

Self-Funded Search Fund/Micro Buyout

Inspiration & Strategy Overview: Twitter thread by Brandon Laughridge Blue cells are inputs

Instructions: Feel free to create your own editable version of this spreadsheet by going to "File" > "Make a copy." The blue cells are the inputs (i.e. everything else should update automatically).

This is just a hypothetical example for educational purposes only. If you see any mistakes, have questions, or have any other feedback, feel free to reach out on Twitter: @bschaf12

Deal Terms Financing Sale Terms Results

EBITDA 800,000 Type Percentage Amount Interest Rate Term (Years) Sale Multiple 4.25 Party ROI IRR MOIC Total Proceeds Sale Proceeds

Purchase Multiple 4.00 SBA Loan 85% 2,720,000 6% 10 Sale Year 7 Equity Partner 653.9% 171.3% 7.54x 1,206,218 250,545

Purchase Price 3,200,000 Seller Financing 10% Remaining Debt 1,051,015 Majority Owner 3,786,931 2,254,905

Tranche 1 5% 160,000 6% 10 Seller Tranche 2 Payoff 240,581

Tranche 2 5% 160,000 6% 11 Broker Comm 8%

Operating Assumptions Equity Partners 5% 160,000 Legal & Acct 50,000

EBITDA Growth Rate 3% Repayment Terms: Majority owner will take no distributions until equity partners have received 5x return of capital.

Ownership Retained 90%

Capex/Reinvestment/Req'd WC 15% Return of Cap Multiple 5 OK

Year

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

EBITDA 824,000 848,720 874,182 900,407 927,419 955,242 983,899 1,013,416 1,043,819 1,075,133 1,107,387 1,140,609 1,174,827 1,210,072 1,246,374 1,283,765 1,322,278

SBA Debt (362,371) (362,371) (362,371) (362,371) (362,371) (362,371) (362,371) (362,371) (362,371) (362,371) 0 0 0 0 0 0 0

Seller Financed Debt (21,316) (21,316) (21,316) (21,316) (21,316) (21,316) (21,316) (21,316) (21,316) (21,316) 0 0 0 0 0 0 0

Reserves for Standby Equity (Tranche 2) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) (27,612) 0 0 0 0 0 0

Capex/Reinvestment/Req'd WC (123,600) (127,308) (131,127) (135,061) (139,113) (143,286) (147,585) (152,012) (156,573) (161,270) (166,108) (171,091) (176,224) (181,511) (186,956) (192,565) (198,342)

Net Distributable Cash Flow 289,102 310,114 331,756 354,048 377,008 400,657 425,016 450,105 475,947 502,565 913,667 969,517 998,603 1,028,561 1,059,418 1,091,200 1,123,936

Equity Partner Distributions 289,102 310,114 200,785 35,405 37,701 40,066 42,502 45,011 47,595 50,256 91,367 96,952 99,860 102,856 105,942 109,120 112,394

Majority Owner Distributions 0 0 130,971 318,643 339,307 360,591 382,514 405,095 428,353 452,308 822,301 872,566 898,743 925,705 953,476 982,080 1,011,543

Check - - - - - - - - - - - - - - - - -

Cumulative Equity Partner Distr 289,102 599,215 800,000 835,405 873,106 913,171 955,673 1,000,683 1,048,278 1,098,535 1,189,901 1,286,853 1,386,713 1,489,569 1,595,511 1,704,631 1,817,025

Remaining Return of Capital 510,898 200,785 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Sale Price 4,181,571

Seller Standby Equity (Tranche 2) Payoff (240,581)

Remaining Debt (1,051,015)

Broker & Professional Fees (384,526)

Net Proceeds 0 0 0 0 0 0 2,505,450 0 0 0 0 0 0 0 0 0 0

Equity Parter Sale Proceeds 0 0 0 0 0 0 250,545 0 0 0 0 0 0 0 0 0 0

Majority Owner Sale Proceeds 0 0 0 0 0 0 2,254,905 0 0 0 0 0 0 0 0 0 0

Cumulative Distributions (Eq Ptr) 955,673

Cumulative Distributions (Majority) 1,532,026

Buy a Business v2.1
Info
Tags Accounting, Finance, Buyout, Template
Type Google Sheet
Published 20/07/2020, 10:50:39