Business Overview

Perhaps you’ve heard of a “staycation”? That term has been around for a while, and of course it means taking off from work but staying home to just catch a breath and enjoy life in a comfortable environment.

It has become a way of life for many people of retirement age, who prefer to put money into their existing home instead of opting for a new mortgage.
They want comfort, convenience, style, and quality. And they can afford it.

And nowadays, with the concern about restricting travel for health reasons, the “stay at home” phenomenon has become a new way of life for everyone else as well.

What does that mean to a well-stocked stove and barbecue store that specializes in comfort-oriented and food-preparation products, both winter and summer? More precisely, what does it mean if the store is in a fast-growing and desirable high-income area, has a great website, and can deliver to the customer’s door?

Not too hard to figure out: it means profits, cash flow, stability, and growth opportunity!

Check out what a well-designed website and a convenient brick and mortar location can do when they’re combined.

The business is priced on a “cash flow” basis, meaning that the value and price of the business was based on the Seller’s Discretionary Earnings (SDE) plus inventory at invoice cost.

In 2019 the SDE was over $70,000, but the business is priced conservatively on a weighted average of three years, not just the best one.

In addition to the SDE, in 2019 there was an additional $40,000 that was paid to the co-owners for work done in the business. If the buyer wishes, they can do this work instead of hiring it out, and pocket what would have been an operating expense.
For 2019, the total of the two was $110,000.

In addition, there is another amount that goes out to subcontractor installers (approximately $50,000 in 2019.) If the buyer is qualified, this money becomes new revenue instead of an expense.

All of this should make the business highly financeable using the standard SBA loan criteria.

Financial

  • Asking Price: $193,744
  • Cash Flow: $70,225
  • Gross Revenue: $502,906
  • EBITDA: $70,225
  • FF&E: N/A
  • Inventory: $86,952
  • Inventory Included: N/A
  • Established: 2004

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:2,000
  • Lot Size:N/A
  • Total Number of Employees:2
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The store is in a prime area, well-appointed, with a competitive lease. There is a desktop system, a laptop with three years of data, an array of trade fixtures, and a 3000 lb. electric forklift with a new charger.

Is Support & Training Included:

The owners will provide a month of hands-on operations orientation at no cost. After that, another 3 months of email and phone support (also at no cost.) Thereafter, if the buyer wishes, they will provide consulting services at competitive rates.

Purpose For Selling:

Retirement

Pros and Cons:

This business is the dominant player for its product line in its market area. A google search for its products brings it up front and center, followed by a store in a different market area.

Opportunities and Growth:

The store stocks the highest quality wood and pellet stoves, barbecue grills, and related supplies. Business has been growing nicely over the years and enjoys a great reputation. The owners are retiring, but if they were continuing to build the business here are some of the areas they would explore: • Service contracts on the installed base in the area. Many homes are 20-30 years old and this leads naturally into new sales revenue. • Proactive outreach to the many builders and remodeling contractors in this hot area. • Focus on the local search engine results. Already good but can be expanded. • Social media program, with testimonials.

Additional Info

The business was started in 2004, making the business 18 years old.
The transaction shall not include inventory valued at $86,952*, which ins't included in the asking price.

The company has 2 PT employees and resides in a building with estimated square footage of 2,000 sq ft.
The real estate is leased by the business for $1,900 per Month

Why is the Current Owner Selling The Business?

There are all kinds of reasons why people decide to sell companies. However, the genuine factor vs the one they say to you may be 2 absolutely different things. For instance, they may say "I have a lot of other responsibilities" or "I am retiring". For many sellers, these factors stand. But also, for some, these may simply be justifications to try to conceal the reality of changing demographics, increased competition, recent reduction in incomes, or an array of various other reasons. This is why it is extremely important that you not count completely on a seller's word, but rather, utilize the vendor's solution together with your total due diligence. This will repaint an extra realistic image of the business's current scenario.

Existing Debts and Future Obligations

If the current business is in debt, which numerous companies are, then you will need to consider this when valuating/preparing your offer. Lots of operating businesses finance loans with the purpose of covering things like supplies, payroll, accounts payable, and so on. Remember that in some cases this can suggest that profit margins are too tight. Lots of organisations fall under a revolving door of taking loans as a way to pay back various other loans. In addition to debts, there may additionally be future obligations to consider. There might be an outstanding lease on equipment or the building where the business resides. The business may have existing agreements with vendors that have to be fulfilled or might cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do companies in the location draw in new customers? Most times, companies have repeat clients, which create the core of their day-to-day revenues. Certain factors such as new competitors sprouting up around the area, roadway building and construction, as well as employee turn over can influence repeat consumers and also adversely impact future profits. One important point to take into consideration is the location of the business. Is it in an extremely trafficked shopping center, or is it concealed from the highway? Certainly, the more individuals that see the business on a regular basis, the better the possibility to construct a returning consumer base. A last thought is the basic location demographics. Is the business placed in a largely inhabited city, or is it located on the outskirts of town? Just how might the local mean family earnings influence future income potential?