Listing ID: 77428
Business Overview
This towing company has been in business for over 30 years in a northern California Metropolitan Area. They handle all types of vehicle towing and roadside and emergency services and, have on-call contracts with several law enforcement agencies.
As an ‘essential service,’ the company remained operating during the economic shutdown of 2020. Even with an extraordinary decrease in vehicle traffic, sales remained relatively strong and the business remained profitable. Current 2021 business is exceeding 2019 levels. Sales in 2019 were $2,450,000 with SDE of approximately $874,000. 2020 sales were $2,130,000 and SDE approximately $710,000. Complete details may be obtained by completing the NDA and speaking with the broker.
The business employs a staff of 18 (W-2) including the owner-operator.
Included in the sale are ten vehicles and all the ancillary equipment required. The vehicles had an estimated initial acquisition cost of $1.18 million and a current estimated fair market value of $843,000; they will be conveyed to the new owner free and clear of any and all liens.
The business is housed in leased premises at a month-to-month rent of about $2,500. An additional yard is also used and may be continued at the discretion of the new owner.
The owner is open to a training, transition, and consultation period, depending on the needs and wishes of the new owner and the terms of the transaction.
Price & Transaction. The asking price is $2,995,000 (subject to negotiation, terms, and timing). This price is about 4x typical annual SDE, 1.2x gross annual sales. All reasonable offers will be considered.
The business is offered as a sale of all the trucks and other tangible/physical assets of the company, plus the intangible property, including the highly-valuable business name, logo, websites, phone numbers, customer data, etc. It does not include accounts receivable, cash on hand, and facility rent deposits. Inventory of vehicles for sale is not included but may be acquired at a to-be-negotiated price. The seller will be responsible for all accounts payable and payroll through the date of closing. The current owner would be open to a training & transition phase to facilitate a smooth transfer to new ownership.
Note: All data on this business are provided by the Seller for information purposes only, and no representations are made by the Broker as to accuracy. The Broker has made no independent verification of the data contained herein. The Broker represents the Seller and does NOT represent the Buyer. The Buyer is advised to perform independent due diligence and seek the advice of appropriate qualified professionals prior to purchasing the Business.
Financial
- Asking Price: $2,995,000
- Cash Flow: $850,000
- Gross Revenue: $2,500,000
- EBITDA: N/A
- FF&E: $843,000
- Inventory: N/A
- Inventory Included: N/A
- Established: 1982
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:18
- Furniture, Fixtures and Equipment:N/A
The business is housed in leased premises at a month-to-month rent of about $2,500. An additional yard is also used and may be continued at the discretion of the new owner.
The owner is open to a training, transition, and consultation period, depending on the needs and wishes of the new owner and the terms of the transaction.
Retirement
Additional Info
The venture was founded in 1982, making the business 40 years old.
Why is the Current Owner Selling The Business?
There are all kinds of reasons why people decide to sell operating businesses. However, the real factor and the one they tell you might be 2 entirely different things. As an example, they might state "I have way too many other responsibilities" or "I am retiring". For numerous sellers, these factors are valid. However, for some, these may just be excuses to attempt to hide the reality of changing demographics, increased competitors, recent reduction in profits, or an array of various other reasons. This is why it is really crucial that you not count entirely on a vendor's word, however instead, use the vendor's solution together with your general due diligence. This will repaint a much more practical image of the business's current scenario.
Existing Debts and Future Obligations
If the current company is in debt, which numerous businesses are, then you will certainly need to consider this when valuating/preparing your deal. Lots of companies take out loans so as to cover things such as stock, payroll, accounts payable, so on and so forth. Remember that occasionally this can suggest that earnings margins are too thin. Many organisations fall into a revolving door of taking loans as a way to pay back other loans. Along with debts, there may additionally be future obligations to take into consideration. There may be an outstanding lease on equipment or the building where the business resides. The business might have existing contracts with suppliers that must be met or might result in fines if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do companies in the area bring in new customers? Many times, businesses have repeat customers, which create the core of their everyday profits. Specific factors such as brand-new competition growing up around the location, roadway building, as well as personnel turn over can influence repeat customers as well as adversely affect future incomes. One crucial point to take into consideration is the area of the business. Is it in a highly trafficked shopping center, or is it concealed from the highway? Certainly, the more people that see the business often, the higher the chance to construct a returning consumer base. A last idea is the general location demographics. Is the business located in a largely populated city, or is it situated on the edge of town? Just how might the neighborhood typical household income impact future income potential?
