Business Overview

This is a very highly-respected towing company in business for 27 years on the San Francisco Peninsula. They handle all types of vehicle towing for private parties and for government agencies. They have on-call contracts with the California Highway Patrol and with several municipalities.

As an “essential service,” the company weathered the economic shutdown of 2020 very well. Even with the extraordinary decrease in motor vehicle use, sales declined by only 18% … and the business was still profitable. Currently business is back up to 2019 levels and more, with 2021 sales expected to exceed 2019 by about 15%, ending the 2021 year at approximately $535,000 or more.

The company provides towing and roadside assistance for cars and light trucks. They have on-call service contracts with local police departments, as well as with The San Mateo County Sheriff and the California Highway Patrol, providing both towing and impound services. They also do some towing and roadside assistance for the general public. A new owner may want to pursue highly-lucrative motor club (e.g., AAA) and insurance company contracts as well.

The business is housed in leased premises at rent of about $2,800 per month, month-to-month following a long-term lease. The landlord will be open to a new long-term lease with a new owner. There are 100 square feet of inside space and 9,500 square feet of usable outside space.

Financial Data:
Sales in 2019 were $471,000 with SDE of $241,000, and 2020 sales were $384,000 with SDE of $93,000. Sales from January through August 2021 were $360,561. It is expected that sales for all of 2021 will be $535,000 or more, with SDE of approximately $255,000.

The sale price includes two vehicles (with estimated replacement value of about $200,000):
2017 Ram 4500/Century 412 Wrecker ($65,000+)
2021 International MV602/Century Flatbed ($130,000+)
These vehicles will be transferred clear of any liens.
(There is a third vehicle, a 2007 International 4300/Century 612 Diesel Wrecker, that will need to be retired at the end of 2021. The Seller does not include it in the sale and will arrange for its disposition prior to or following the Closing.)

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 $549,900.00 (subject to negotiation, terms, and timing). This price is about 2.2x the expected 2021 annual SDE, and 1.25x gross annual (2021) 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 being held for resale is subject to negotiation. The seller will be responsible for all accounts payable through the date of closing. The current owner would be open to a training & transition phase to facilitate a smooth transfer to new ownership.

Exclusive Broker: Tim Cunha DRE#01919755

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: $549,900
  • Cash Flow: $255,000
  • Gross Revenue: $535,000
  • EBITDA: $255,000
  • FF&E: $200,000
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 1993

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:N/A
  • Furniture, Fixtures and Equipment:N/A
Is Support & Training Included:

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.

Additional Info

The venture was founded in 1993, making the business 29 years old.

The building is leased by the business for $2,800 per Month

Why is the Current Owner Selling The Business?

There are all kinds of reasons individuals resolve to sell companies. However, the real factor vs the one they tell you may be 2 totally different things. As an example, they may claim "I have a lot of other obligations" or "I am retiring". For many sellers, these reasons stand. But also, for some, these might just be excuses to try to conceal the reality of transforming demographics, increased competitors, current reduction in earnings, or a range of other reasons. This is why it is very essential that you not rely absolutely on a seller's word, yet instead, use the seller's answer together with your total due diligence. This will paint a much more reasonable image of the business's present circumstance.

Existing Debts and Future Obligations

If the existing entity is in debt, which numerous companies are, then you will certainly have reason to consider this when valuating/preparing your offer. Numerous operating businesses finance loans with the purpose of covering things such as supplies, payroll, accounts payable, etc. Keep in mind that sometimes this can imply that revenue margins are too thin. Lots of organisations fall into a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may likewise be future commitments to think about. There may be an outstanding lease on tools or the building where the business resides. The business may have existing agreements with vendors that must be fulfilled or might cause fines if canceled early.

Understanding the Customer Base, Competition and Area Demographics

Just how do businesses in the area bring in brand-new consumers? Many times, operating businesses have repeat clients, which create the core of their day-to-day profits. Particular variables such as brand-new competition sprouting up around the area, road construction, and personnel turnover can affect repeat clients and also negatively influence future incomes. One essential point to consider is the location of the business. Is it in an extremely trafficked shopping mall, or is it concealed from the main road? Clearly, the more people that see the business on a regular basis, the greater the opportunity to build a returning client base. A final thought is the basic area demographics. Is the business placed in a largely populated city, or is it situated on the outskirts of town? Exactly how might the regional typical family earnings influence future income potential?