Business Overview

This Company provides managed IT services to SMBs in the Los Angeles County area. Specializing in data and network security, the firm operates with a lean crew of three quality employees. The Seller works in the business, but is not the primary tech.
The vast majority of revenues come from industry diversified contracted clients. By revenue, manufacturing clients make up the largest segment at 27%.

The seller believes the market has been constrained all through the pandemic and there is pent up demand for MSP services.

The Company has prepped to go fully remote and is ready for a remote management team to take over.

This opportunity is well positioned for a strategic acquisition.

Business location and name will be shared once a qualified Buyer prospect is vetted.

NDA is required to secure comprehensive Confidential Information Memorandum (CIM) crafted by ProNova Partners.

Detailed Information

Facilities: N/A

Competition: Limited to client-side decision makers and small one-man operations in the local area.

Growth & Expansion: The business has strong local relationships and a great reputation, but has not aggressively pursued sales, instead growing mostly by referral. There exists an opportunity with the right positioning.

Financing: The Seller is willing to consider carrying a note for a well-qualified buyer.

Support & Training: Four weeks of twenty hours. The Seller wishes to facilitate a successful and smooth transfer of the Business.

Reason for Selling: The Seller has worked in the business for almost 25 years and is ready semi-retire and do something else.

Financial

  • Asking Price: $850,000
  • Cash Flow: $194,000
  • Gross Revenue: $595,000
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 1998

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:3
  • Furniture, Fixtures and Equipment:N/A
Is Support & Training Included:

Support & Training: Four weeks of twenty hours. The Seller wishes to facilitate a successful and smooth transfer of the Business.

Purpose For Selling:

The Seller has worked in the business for almost 25 years and is ready semi-reti

Pros and Cons:

Limited to client-side decision makers and small one-man operations in the local area.

Opportunities and Growth:

The business has strong local relationships and a great reputation, but has not aggressively pursued sales, instead growing mostly by referral. There exists an opportunity with the right positioning.

Additional Info

The business was founded in 1998, making the business 24 years old.

Why is the Current Owner Selling The Business?

There are all types of reasons people decide to sell operating businesses. Nevertheless, the genuine factor and the one they tell you might be 2 absolutely different things. For instance, they may claim "I have a lot of other responsibilities" or "I am retiring". For many sellers, these factors are valid. But also, for some, these may just be excuses to try to hide the reality of transforming demographics, increased competitors, recent reduction in revenues, or a range of various other factors. This is why it is really essential that you not count totally on a seller's word, but rather, utilize the seller's answer combined with your total due diligence. This will paint an extra reasonable image of the business's current circumstance.

Existing Debts and Future Obligations

If the existing company is in debt, which many businesses are, then you will have reason to consider this when valuating/preparing your deal. Many operating businesses finance loans so as to cover things like inventory, payroll, accounts payable, etc. Remember that sometimes this can imply that revenue margins are too thin. Lots of businesses come under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may also be future commitments 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 have to be satisfied or may result in fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the area attract brand-new consumers? Often times, operating businesses have repeat clients, which develop the core of their day-to-day earnings. Certain elements such as brand-new competition growing up around the location, road building and construction, and employee turn over can affect repeat consumers and also adversely influence future earnings. One essential thing to take into consideration is the placement of the business. Is it in a highly trafficked shopping mall, or is it concealed from the highway? Undoubtedly, the more individuals that see the business regularly, the better the possibility to construct a returning customer base. A last idea is the general area 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 family earnings impact future revenue prospects?