Business Overview

10-year established building material dealer that specializes in home improvement materials and supplies such as flooring, cabinets, doors, kitchen, bath fixtures, wall tile, lighting, hardware, tools, etc., in North Texas is now available for acquisition.

This business was established in 2011 by the current ownership at its present location. As the company continued to outgrow the space, it had to undergo facility expansions twice in 2013 and 2016.

This business occupies over 95,000 SF space of a warehouse building with ample parking lots surrounded by industrial areas, offices, and densely populated residential neighborhoods. The facility has the second floor, and the actual usable area, including both the first and second floors, is approximately 150,000 SF.

A majority of the customers consist of a variety of demographics such as individual homeowners, contractors, builders, investors, landlords, apartment complexes, real estate agents, remodeling companies, house flippers, interior designers, DIY (Do-It-Your) trendsetters, etc.

There are several other privately-held companies directly competing in the similar or same market in the market area, but this well-established residential building materials retailer has differentiated itself by focusing on providing customers with unique and quality products in large quantity.

Although some competitors are operating with multiple satellite locations, its decentralized operation increases its overhead, decreases profit margin, and limits inventory available on the floor in terms of selection and quantity. However, by having operated at its one centralized location since established, this home improvement store is well equipped to offer products in larger quantity and selection at a more competitive price than other competition.

The revenue of this company has been continuously growing since its inception, and it has increased significantly from 2019 to 2021 compared to relatively consistent from 2017 to 2018. The gross revenues of 2020 of this comp were just under $9MM and is now on track to penetrate $10MM mark in 2021.

This business has already achieved remarkable growth since its inception, but it still has tremendous growth potentials. The online presence of this business is rapidly expanding its footage, and given the current pace, its online sales are expected to increase by over 50% in 2021 compared to 2020.

Day-to-day operation is fully managed by strong management team comprising 1 operation manager and 1 general manager along with 5 department managers, while two owners are mainly focused on product purchasing.

This well-established high-volume home improvement retailer is looking for passionate entrepreneurs who can successfully take the legacy of this business to the next level.

Listing ID #001075
For more info, please call Moon Kim at 1-866-519-2421.

Financial

  • Asking Price: $9,900,000
  • Cash Flow: $1,760,000
  • Gross Revenue: $10,400,000
  • EBITDA: N/A
  • FF&E: $600,000
  • Inventory: $2,500,000
  • Inventory Included: Yes
  • Established: 2011

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:N/A
  • Lot Size:N/A
  • Total Number of Employees:28
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

This business occupies a warehouse building surrounded by a number of industrial building and offices and retail businesses in North Texas.

Is Support & Training Included:

Strong non-owner management is in place, and the owner of the business will provide the necessary training needed for a smooth transition into the business operation.

Purpose For Selling:

Other opportunities

Pros and Cons:

There are several multi-location competitors that have scattered inventory through their satellite locations, while this business has a centralized location that carries large quantities of a variety of products. Additionally, this keeps overhead much lower than competitors while accommodating customer's price points.

Opportunities and Growth:

Online marketing and offline marketing are being proactively done by current owners such as Google SEO/Adware, TV commercials, Billboards, social media outlets, etc. Given the current trend, coupled with proactive online marketing, online sales are expected to grow by over 50% in 2021 compared to 2020.

Additional Info

The company was started in 2011, making the business 11 years old.
The sale shall include inventory valued at $2,500,000, which is included in the suggested price.

Why is the Current Owner Selling The Business?

There are all sorts of reasons individuals choose to sell operating businesses. Nonetheless, the true factor and the one they say to you may be 2 entirely different things. As an example, they might state "I have way too many other responsibilities" or "I am retiring". For lots of sellers, these factors are valid. However, for some, these may just be excuses to try to hide the reality of altering demographics, increased competitors, recent reduction in incomes, or an array of other factors. This is why it is very vital that you not depend entirely on a vendor's word, yet rather, utilize the seller's solution combined with your general due diligence. This will paint an extra practical image of the business's current circumstance.

Existing Debts and Future Obligations

If the current entity is in debt, which lots of businesses are, then you will have reason to consider this when valuating/preparing your deal. Numerous companies finance loans with the purpose of covering items like supplies, payroll, accounts payable, so on and so forth. Keep in mind that sometimes this can imply that profit margins are too tight. Numerous companies fall under a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may additionally be future commitments to think about. There may be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with vendors that should be satisfied or may result in fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the area attract brand-new clients? Most times, operating businesses have repeat consumers, which form the core of their day-to-day earnings. Particular elements such as new competitors sprouting up around the location, road construction, and staff turnover can affect repeat customers as well as adversely impact future revenues. One crucial thing to think about is the placement of the business. Is it in a highly trafficked shopping mall, or is it hidden from the highway? Undoubtedly, the more people that see the business on a regular basis, the greater the possibility to build a returning consumer base. A last thought is the basic area demographics. Is the business situated in a densely populated city, or is it situated on the edge of town? How might the neighborhood typical family earnings influence future earnings prospects?