Listing ID: 66635
Business Overview
This company is a family-owned business that was formed approximately twenty years ago to provide specialty painting, coating applications, and wall covering sub-contractor services on a broad range of commercial projects. 90% of the business services are on the interior and 10% on the exterior for each job. The business offers a wide range of services that allows them to selectively bid more jobs with greater flexibility. The most common services provided as a percentage, include Interior Painting (100%), Exterior Painting (10%), Wall Coverings (30-35%), Special
Coatings (30%), Water Repellents (10%), and Intumescent Fireproofing (10%). In addition, the business can also provide Tackable Bulletin Boards, Virtual Felt & Fabric Wallcoverings, Graphics, Stenciling, Modular Arts Wall Systems, Magnetic White Boards, and insulation coatings.
The business almost exclusively services King & Pierce Counties, however, they have the capability to bid jobs anywhere in Washington or out of state as well. By design, the business commits 90% of its focus on jobs bids for Public Works projects, that often includes: School Districts, Medical Facilities, Fire Stations, Police Stations, and Courthouses. The Public Works niche’ market has proven very lucrative and stable due the Government’s advance capital authorization for the projects, coupled with their need to improve facilities even when the economy is in an economic downturn. Most Public Works projects have an 8–10-month lead time from the date that the bid is accepted, a contract is signed, a bond is secured, and work commences. The scope of each job Invitation to Bid (ITB) for Public Works projects are determined by the General Contractor for each project based upon several specialty needs and subcontractor “divisions” capabilities. In an effort to facilitate most selected bid opportunities, the business is qualified in 15 different division service areas using exclusively in-house labor in areas ranging from Plastic Paneling (06 64 00) to Intumescent Resistive Coatings (67 81 23), to Glass Fabric Wall Coverings (09 72 20), and many more.
The business currently has more than $3,000,000 in binding Public Works government contracts on the books for 2022.
The business is strategically located in the Seattle metropolitan area near the highway infrastructure. The business rents a 6,400 sq ft. building that is allocated 35% to office/administrative and 65% to the shop/service area. The shop area supports 15’ ceilings and is capable of storing all inventory/supplies and up to 6 vans whenever necessary. The current office lease is at $5,500 per month, plus NNN charges. The current lease term is set to expire on October 31, 2022, but the Landlord has assured the Sellers that they are open to negotiating an extended lease with qualified new tenant at current market rates.
One of the Sellers (husband) serves as the General Manager with daily oversight over all business activities, plus job estimating, and hiring. The other Seller (wife) reviews contracts and oversees both accounting & payroll. The business also supports 35-40 specialty painters who are all paid the current prevailing hourly wage at $47.70. The office supports two salaried estimators who are paid $120,000 & $100,000 respectively, a salaried project engineer at $75,000, and a bookkeeper at $30.00 per hour.
The lead business broker for this company at IBA is Bill Southwell. Mr. Southwell can be reached directly at (425) 454-3052 or bill@ibainc.com.
Financial
- Asking Price: $3,500,000
- Cash Flow: $2,000,000
- Gross Revenue: $5,500,000
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
The seller will provide an appropriate amount of transition training/consulting to facilitate a smooth transfer of ownership.
Why is the Current Owner Selling The Business?
There are all types of reasons individuals choose to sell operating businesses. Nonetheless, the genuine factor and the one they say to you might be 2 completely different things. For instance, they may state "I have way too many other responsibilities" or "I am retiring". For lots of sellers, these factors stand. But also, for some, these might just be reasons to try to conceal the reality of changing demographics, increased competitors, recent reduction in earnings, or an array of other reasons. This is why it is really crucial that you not rely totally on a vendor's word, but instead, utilize the seller's response along with your general due diligence. This will repaint a much more reasonable image of the business's current scenario.
Existing Debts and Future Obligations
If the existing entity is in debt, which lots of businesses are, then you will certainly need to consider this when valuating/preparing your offer. Lots of companies finance loans so as to cover things such as stock, payroll, accounts payable, so on and so forth. Keep in mind that sometimes this can mean that profit margins are too tight. Numerous businesses fall into a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may additionally be future commitments to think about. There might be an outstanding lease on tools or the building where the business resides. The business might have existing contracts with vendors that have to be fulfilled or may lead to fines if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do companies in the location bring in brand-new clients? Most times, companies have repeat consumers, which form the core of their daily profits. Specific aspects such as new competition sprouting up around the area, roadway construction, as well as employee turnover can impact repeat customers and adversely affect future earnings. One important point to consider is the placement of the business. Is it in a very trafficked shopping mall, or is it concealed from the main road? Undoubtedly, the more individuals that see the business regularly, the greater the opportunity to develop a returning customer base. A last idea is the basic location demographics. Is the business placed in a densely populated city, or is it situated on the outside border of town? Just how might the regional typical household income effect future revenue potential?
