Listing ID: 71460
Unusually profitable specialty bakery business located in heart of major college district. This is a branded baker of high margin donuts, crullers, vegan donuts, and other products. This is not a “chain donut or coffee company” but a profitable and very interesting business and community of customers. Coffee is 10-15% of annual sales.
Three major colleges within walking distance and located across from large municipal office.
Financial performance strong.
A large number of orders placed through the client’s completely custom online on-line order form. This assists in determining daily planning and reducing waste which improves margins.
Nine full-time employees and twelve part-time employees
In house delivery via a custom wrapped van. The van can also used for pop up events and weddings.
This company has an interesting “Donut Wedding” strategy and provides specialty donuts as an alternative to traditional wedding cake. This high margin wedding segment has already grown to 100-150 weddings annually. Upside here.
- Asking Price: $969,000
- Cash Flow: $324,130
- Gross Revenue: $1,555,201
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:N/A
- Lot Size:N/A
- Total Number of Employees:9
- Furniture, Fixtures and Equipment:N/A
Two story facility. Interestingly painted and decorated. Large windows with lots of natural light.
Two weeks equivalent management transition
Other business interests
No similar business model in this geographic market. Only chain donut shops.
1. Grow special events and weddings. 2. Grow coffee sales by adding a high-speed espresso machine. 3. Grow kosher product line with second oven. 4. Expand complementary sales such as ice cream and add other products.
Why is the Current Owner Selling The Business?
There are all sorts of reasons people decide to sell businesses. However, the real reason vs the one they tell you may be 2 absolutely different things. For instance, they might claim "I have too many other responsibilities" or "I am retiring". For lots of sellers, these reasons are valid. However, for some, these may simply be reasons to try to conceal the reality of transforming demographics, increased competition, recent reduction in incomes, or a variety of other reasons. This is why it is really crucial that you not rely absolutely on a vendor's word, yet instead, use the seller's response combined with your total due diligence. This will paint a more realistic image of the business's current circumstance.
Existing Debts and Future Obligations
If the current business is in debt, which numerous companies are, then you will certainly need to consider this when valuating/preparing your deal. Lots of companies borrow money in order to cover things such as inventory, payroll, accounts payable, etc. Remember that in some cases this can indicate that profit margins are too small. Lots of organisations fall into a revolving door of taking loans as a way to pay back various other loans. In addition to debts, there may likewise be future obligations to think about. There might be an outstanding lease on equipment or the structure where the business resides. The business may have existing agreements with suppliers that should be satisfied or might result in penalties if canceled early.
Understanding the Customer Base, Competition and Area Demographics
How do operating businesses in the location bring in new clients? Often times, companies have repeat customers, which develop the core of their day-to-day revenues. Certain elements such as brand-new competitors sprouting up around the location, road building, as well as employee turn over can impact repeat consumers as well as negatively impact future profits. One essential thing to take into consideration is the location of the business. Is it in a very trafficked shopping mall, or is it concealed from the highway? Clearly, the more people that see the business often, the better the possibility to construct a returning client base. A last idea is the basic location demographics. Is the business placed in a largely populated city, or is it situated on the outside border of town? Just how might the regional median home earnings influence future earnings potential?