Business Overview

This Farm Supply business has grown by 10% per year over the last several years and has ample opportunity to grow further given the regional demand. The business is located in rural Alabama.

The major product mix categories include Farm Seed, General Hardware, Fertilizer, Feed Sales, and Lawncare Equipment.

The business owner is willing to stay on through the transition. Current staff members will remain in the business.

Financial

  • Asking Price: $415,000
  • Cash Flow: $137,000
  • Gross Revenue: $840,000
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: N/A

Why is the Current Owner Selling The Business?

There are all kinds of reasons people choose to sell operating businesses. Nonetheless, the real factor and the one they say to you may be 2 totally different things. As an example, they may say "I have a lot of various responsibilities" or "I am retiring". For many sellers, these factors are valid. But, for some, these might just be reasons to try to hide the reality of changing demographics, increased competition, current reduction in profits, or an array of various other reasons. This is why it is very essential that you not count completely on a seller's word, yet rather, utilize the seller's answer combined with your general due diligence. This will repaint an extra practical picture of the business's existing circumstance.

Existing Debts and Future Obligations

If the current business is in debt, which lots of companies are, then you will need to consider this when valuating/preparing your offer. Many businesses borrow money in order to cover points such as inventory, payroll, accounts payable, etc. Keep in mind that sometimes this can imply that revenue margins are too tight. Many companies come under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may additionally 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 have to be met or might lead to penalties if terminated early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do companies in the area draw in brand-new consumers? Most times, operating businesses have repeat customers, which create the core of their everyday earnings. Certain elements such as new competitors growing up around the location, roadway construction, as well as staff turn over can affect repeat clients and also negatively impact future incomes. One essential point to think about is the area of the business. Is it in an extremely trafficked shopping center, or is it concealed from the highway? Obviously, the more individuals that see the business often, the greater the chance to build a returning customer base. A last thought is the basic location demographics. Is the business located in a largely inhabited city, or is it located on the outside border of town? How might the neighborhood typical household earnings impact future income potential?