The Business: Looking for an entrepreneurial umbrella that could shelter you from the storms of the large corporate workplace? Then check out this four-year-old title-insurance-and-settlement service, whose selling points include impressively high margins, great growth potential, and the ability to relocate into a home office (although the company could just as easily be merged into an existing brokerage operation). Who says that death and taxes are life's only inevitabilities? Within this state's thriving real estate marketplace, both families and businesses require this company's services, which include most everything involved in closing a purchase or refinancing, such as title searches, surveys, and of course, the sale of title-insurance policies. Two full-timers handle from 150 to 180 transactions each year. The owner wants to relocate to another state but would spend four to six months training a successor, if necessary.

Price: $110,000. With a $75,000 down payment, the seller would provide 36-month financing at 10% annual interest.

Outlook: In an environment of rising interest rates, it's unlikely that a new owner will be able to replicate 1999's extraordinary results (which owe more to a refinancing landslide than to any unusual marketing efforts) without diversifying into other insurance that could capitalize on the company's real estate expertise, especially homeowner's and property-casualty lines. A growth-oriented buyer could also concentrate on building ties to the local banks that serve primarily commercial customers, since their closings and insurance needs tend to be more rewarding than residential deals.

Price Rationale: There's no better guarantee that a deal will pay off than getting a bargain on the price. Insurance brokerages typically sell for 1 to 1.5 times annual revenues. In this company's case, that would suggest a price tag of about $130,000 to $195,000. Why the discount? The drop-off from 1999 to 2000 emphasizes a cyclical vulnerability -- there's no reason for a buyer to overpay during a downturn.

Pros: There's no place like home. Except maybe a home-based business with a profitable niche, low price tag, and plenty of room to expand.

Cons: You may not like this company's home state. If that's the case, you'd be better off starting up a new brokerage elsewhere, because the main value here is ties to local banks and real estate agents.

Gross Revenues Recast Earnings*
1998 $128,677 $68,000
1999 $263,648 $133,019
2000 $129,000 $68,657

*Before interest, taxes, depreciation, and owner's compensation.
Note: Each fiscal year ends on August 31. Results for fiscal year 2000 are projected based on nine months of actual results.

Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Marc Dosik or Al Horvath, VR Business Brokers, 410-772-0006.

Please e-mail your comments to