Business Overview

This company has been in operation for over 50 years as a family-owned, union member, construction equipment sales and service business. The company offers equipment service and repairs (50% of Revenue) with 8 technicians on staff, machine sales (25% of Revenue), Equipment parts sales (20% of Revenue), and Machine Rentals (5% of Revenue). They primarily provide service & sales to customers in the following industries: demolition, excavating, scrap handling, recycling, construction and more. They operate with low customer concentration, with no customer representing over 10% of sales, and 90%+ repeat business from their loyal customer base.

The company has a management team in place and experienced employees, many of whom have been with the company for 15+ years. The business operates out of a company-owned 10-acre property that consists of 5 buildings for facilitating equipment service, sales and office duties totaling 20,000 Sqft of covered space. The Real Estate is available for purchase, separate from the purchase of the company. The Real Estate Asking Price is $810,000 as per an independent appraisal conducted by BBG in September 2021. The company is priced for the Net Book Value of Tangible Assets at Close ($9.96M as of 12/31/21).

Financial

  • Asking Price: N/A
  • Cash Flow: $2,691,332
  • Gross Revenue: $14,479,993
  • EBITDA: N/A
  • FF&E: $93,842
  • Inventory: $8,954,957
  • Inventory Included: Yes
  • Established: 1969

Detailed Information

  • Property Owned or Leased:Own
  • Property Included:N/A
  • Building Square Footage:20,000
  • Lot Size:N/A
  • Total Number of Employees:22
  • Furniture, Fixtures and Equipment:N/A
Purpose For Selling:

Retirement

Additional Info

The venture was started in 1969, making the business 53 years old.
The transaction will include inventory valued at $8,954,957, which is included in the asking price.

The company has 22 employees and is situated in a building with disclosed square footage of 20,000 sq ft.

Why is the Current Owner Selling The Business?

There are all kinds of reasons individuals decide to sell businesses. However, the genuine reason vs the one they say to you may be 2 entirely different things. As an example, they may say "I have way too many various responsibilities" or "I am retiring". For lots of sellers, these factors stand. But, for some, these might just be reasons to try to hide the reality of transforming demographics, increased competitors, recent decrease in profits, or a range of other factors. This is why it is very vital that you not count absolutely on a seller's word, yet rather, use the vendor's response in conjunction with your total due diligence. This will paint a much more realistic picture of the business's present circumstance.

Existing Debts and Future Obligations

If the existing company is in debt, which lots of businesses are, then you will have reason to consider this when valuating/preparing your offer. Numerous operating businesses take out loans with the purpose of covering points such as stock, payroll, accounts payable, etc. Bear in mind that in some cases this can indicate that earnings margins are too small. Numerous organisations come under a revolving door of taking on debt as a way to pay back other loans. Along with debts, there may likewise be future commitments to think about. There might be an outstanding lease on equipment or the building where the business resides. The business might have existing contracts with vendors that need to be met or might result in charges if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the location bring in new customers? Most times, operating businesses have repeat clients, which create the core of their everyday revenues. Specific factors such as new competition growing up around the area, roadway building and construction, and employee turn over can impact repeat clients and also adversely influence future earnings. One essential point to think about is the area of the business. Is it in a very trafficked shopping center, or is it hidden from the highway? Clearly, the more individuals that see the business regularly, the better the chance to develop a returning customer base. A final thought is the general location demographics. Is the business located in a densely populated city, or is it located on the outside border of town? Exactly how might the local average household income effect future earnings prospects?