Listing ID: 82861
This is a well-established 50-year-old home-based electrical contractor business. The company is on all the local companies’ vendor lists which does not guarantee work but gives them the opportunity to bid the jobs. The company does commercial and residential work, though 80 to 90 percent is commercial. Depending on the job they have had as many as eight employees consisting of the normal staff of 4 and staffing from the collaboration with other firms in town and independent contractors. Inventory levels are minimal because they don’t carry a lot of inventory on hand, they order the supplies as needed for the specific job.
- Asking Price: $400,000
- Cash Flow: $162,845
- Gross Revenue: $659,979
- EBITDA: N/A
- FF&E: $105,900
- Inventory: $5,000
- Inventory Included: Yes
- Established: 1963
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:N/A
- Lot Size:N/A
- Total Number of Employees:4
- Furniture, Fixtures and Equipment:N/A
Owner is committed to a smooth ownership transition.
Other business interests
The business was founded in 1963, making the business 59 years old.
The transaction will include inventory valued at $5,000, which is included in the asking price.
Why is the Current Owner Selling The Business?
There are all sorts of reasons people choose to sell operating businesses. However, the true factor and the one they say to you may be 2 entirely different things. For instance, they may say "I have way too many various responsibilities" or "I am retiring". For many sellers, these reasons stand. However, for some, these may simply be justifications to attempt to conceal the reality of altering demographics, increased competitors, current reduction in revenues, or a range of various other reasons. This is why it is extremely essential that you not depend entirely on a seller's word, yet instead, use the seller's solution together with your general due diligence. This will paint a more reasonable image of the business's present circumstance.
Existing Debts and Future Obligations
If the existing company is in debt, which many businesses are, then you will certainly have reason to consider this when valuating/preparing your deal. Numerous businesses borrow money in order to cover items like stock, payroll, accounts payable, etc. Remember that occasionally this can suggest that profit margins are too thin. Many businesses fall under a revolving door of taking on debt as a way to pay back other loans. In addition to debts, there may also be future obligations to consider. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing agreements with vendors that have to be satisfied or may cause fines if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do companies in the location attract new clients? Many times, companies have repeat clients, which form the core of their day-to-day profits. Specific aspects such as new competitors sprouting up around the area, roadway building and construction, as well as staff turn over can impact repeat clients as well as adversely impact future incomes. One essential point to consider 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 regularly, the greater the opportunity to develop a returning customer base. A final thought is the basic location demographics. Is the business placed in a largely inhabited city, or is it located on the outskirts of town? How might the neighborhood typical household earnings influence future revenue prospects?