Business Overview

This electric motor and controls company has been building, servicing and repairing
electric motor products for almost 40 years. Their repeat customer base is
predominately industrial customers. Key management positions are in place and will
continue to work and assist the new owner if desired. The business has grown steadily
through the years with a customer base that now covers four states.

The business is a complete life cycle and/or single source solution providing authorized service and maintenance schedules for complex manufacturing equipment of major known brands. They maintain a larger than normal inventory of parts which has also been very key to their consistent growth and territory expansion.

Financial

  • Asking Price: $3,700,000
  • Cash Flow: $794,912
  • Gross Revenue: $4,536,277
  • EBITDA: N/A
  • FF&E: $1,221,832
  • Inventory: $175,000
  • Inventory Included: Yes
  • Established: N/A

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:Yes
  • Building Square Footage:12,600
  • Lot Size:N/A
  • Total Number of Employees:N/A
  • Furniture, Fixtures and Equipment:N/A

Additional Info

The sale will include inventory valued at $175,000, which is included in the suggested price.

Why is the Current Owner Selling The Business?

There are all sorts of reasons individuals decide to sell operating businesses. However, the genuine reason vs the one they tell you may be 2 absolutely different things. For instance, they might claim "I have way too many other commitments" or "I am retiring". For numerous sellers, these factors stand. However, for some, these may simply be reasons to attempt 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 really crucial that you not count completely on a vendor's word, however instead, use the seller's response together with your total due diligence. This will repaint a much more sensible image of the business's present scenario.

Existing Debts and Future Obligations

If the current company is in debt, which numerous companies are, then you will certainly need to consider this when valuating/preparing your deal. Numerous operating businesses borrow money so as to cover items like inventory, payroll, accounts payable, so on and so forth. Remember that in some cases this can mean that revenue margins are too tight. Many organisations fall into a revolving door of taking on debt as a way to pay back other loans. In addition to debts, there may also be future obligations to take into consideration. There may be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with vendors that should be met or might cause fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the area bring in brand-new customers? Many times, operating businesses have repeat consumers, which form the core of their day-to-day earnings. Certain elements such as new competition growing up around the location, road building and construction, and personnel turn over can impact repeat consumers as well as negatively influence future incomes. One crucial point to think about is the area of the business. Is it in a very trafficked shopping mall, or is it hidden from the main road? Certainly, the more people that see the business often, the higher the opportunity to build a returning customer base. A last idea is the basic area demographics. Is the business placed in a largely populated city, or is it situated on the outskirts of town? Just how might the local median household income impact future earnings potential?