Listing ID: 77473

Business Overview

ALL OFFERS WILL BE ENTERTAINED

Company Description
The Company was founded in 1983 when two friends bought the business from the founder when it was just a small hardware store. The early years were lean, and the owners reinvested every dime of profit back into the business until sales were exceeding $3,000,000 a year.

The current owners have built the business up from the small hardware store the y purchased, to a true building supply warehouse. The Company now includes a complete building materials inventory – from plumbing to lumber and everything in between. Over the last 20 years sales have averaged $2.5m and maintained gross margins of 31%.

The current owners have turned their attention towards retirement and are looking for the right buyer to take the business to the next level. Growth opportunities are abundant as the Central Valley, in particular Fresno, continues to grow. The Company is the go-to supply warehouse for west Fresno builders and homeowners.

Transaction Rationale
The owners are looking toward retirement and ready to turn the reigns over to a more youthful ownership team. The Business is profitable and growing. Expansion is an option for new ownership with plenty of land to use for new facilities and services. Current owners have not capitalized on selling to contractors or extending credit to larger customers. Most hardware businesses have seen much success in doing so and increasing sales substantially.

Purchase Price
The listing price of the business including real estate, enterprise value (plus inventory at cost) is $1,500,000.00. SBA financing is available, and a handsome option given the current rates and payback terms.

Financial

  • Asking Price: $1,500,000
  • Cash Flow: N/A
  • Gross Revenue: N/A
  • EBITDA: $300,000
  • FF&E: N/A
  • Inventory: $400,000
  • Inventory Included: N/A
  • Established: N/A

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:Yes
  • Building Square Footage:25,000
  • Lot Size:N/A
  • Total Number of Employees:N/A
  • Furniture, Fixtures and Equipment:N/A

Additional Info

The sale won't include inventory valued at $400,000*, which ins't included in the asking price.

Why is the Current Owner Selling The Business?

There are all sorts of reasons individuals resolve to sell operating businesses. Nonetheless, the real factor vs the one they say to you might be 2 completely different things. For instance, they might say "I have way too many various obligations" or "I am retiring". For lots of sellers, these factors are valid. But also, for some, these may just be excuses to attempt to conceal the reality of transforming demographics, increased competition, recent reduction in incomes, or a variety of various other factors. This is why it is really crucial that you not count absolutely on a seller's word, yet rather, make use of the vendor's answer together with your general due diligence. This will paint a much more sensible picture of the business's present situation.

Existing Debts and Future Obligations

If the existing entity 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 points like stock, payroll, accounts payable, and so on. Keep in mind that occasionally this can mean that revenue margins are too small. Numerous businesses fall under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may likewise be future obligations to consider. There may be an outstanding lease on equipment or the structure where the business resides. The business may have existing agreements with suppliers that must be fulfilled or might cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do companies in the location attract new clients? Most times, companies have repeat clients, which create the core of their day-to-day profits. Specific factors such as new competitors sprouting up around the area, road building and construction, and also staff turn over can impact repeat customers as well as negatively impact future earnings. One vital point to consider is the placement of the business. Is it in a very trafficked shopping mall, or is it concealed from the main road? Certainly, the more people that see the business regularly, the higher the opportunity to develop a returning customer base. A final idea is the basic location demographics. Is the business situated in a largely populated city, or is it situated on the outside border of town? Just how might the local average household earnings effect future income potential?