Business Overview

Nicely equipped machine shop that was established 1997, with the current owner for over 20 years. This shop is Precision CNC Turning and Vertical Milling for the OEM industry. The shop rate ranges from $95.00 to $98 per hour. The owner does the administrative work and the set-up work for the machining.

Equipment is valued at $200K and can do more than half million in sales. The Seller turns down work

Financial

  • Asking Price: $250,000
  • Cash Flow: $60,000
  • Gross Revenue: $161,623
  • EBITDA: N/A
  • FF&E: $200,000
  • Inventory: N/A
  • Inventory Included: Yes
  • Established: 1997

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:2
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

The business operates in about 4000 square feet of leased space. The gross rent is $2900.00 a month which includes real estate taxes, CAM. The current lease expires in 2023; but the lease has a 6 month out clause if the seller chooses to exercise it.

Purpose For Selling:

Retirement

Additional Info

The business was started in 1997, making the business 25 years old.

Why is the Current Owner Selling The Business?

There are all sorts of reasons why people choose to sell businesses. However, the real reason and the one they say to you may be 2 completely different things. For instance, they might state "I have too many various obligations" or "I am retiring". For numerous sellers, these factors are valid. However, for some, these may just be excuses to try to hide the reality of changing demographics, increased competitors, current decrease in earnings, or an array of other factors. This is why it is really essential that you not count totally on a seller's word, but rather, use the seller's solution together with your general due diligence. This will paint an extra reasonable picture of the business's existing scenario.

Existing Debts and Future Obligations

If the current business is in debt, which lots of companies are, then you will certainly have reason to consider this when valuating/preparing your offer. Numerous companies finance loans so as to cover points like stock, payroll, accounts payable, etc. Bear in mind that in some cases this can indicate that earnings margins are too small. Many companies fall into a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may likewise be future commitments to consider. There may be an outstanding lease on equipment or the building where the business resides. The business might have existing contracts with suppliers that need to be met or might cause penalties if canceled early.

Understanding the Customer Base, Competition and Area Demographics

Exactly how do businesses in the area bring in brand-new clients? Many times, businesses have repeat customers, which create the core of their day-to-day revenues. Certain factors such as brand-new competitors growing up around the location, road construction, and also personnel turn over can affect repeat customers as well as negatively influence future earnings. One essential thing to consider is the placement of the business. Is it in an extremely trafficked shopping mall, or is it concealed from the highway? Clearly, the more people that see the business regularly, the higher the opportunity to construct a returning customer base. A final thought is the basic location demographics. Is the business located in a densely populated city, or is it situated on the outskirts of town? Exactly how might the local average family income effect future revenue potential?