Listing ID: 83946

Business Overview

It has been a great ten year run for the owner operator of this unique and profitable restoration business which offers specialized technology for salvaging a variety of damaged electronic equipment and fine artwork. The owner of this unparalleled operation is now debt free and ready to spend more time with his grandchildren.

Operating out of a 15,000 square foot updated warehouse in a desirable suburb of a major West Michigan city, the company has a favorable lease cost of only 6 % of revenues. The buyer can continue with the current lease or move to a location of his choice.

The business has a niche all its own. Using state of the art technology, this franchise resale has become a leader in the industry and is backed by a franchisor with 70 successful sites across the United States. The business has a large, protected territory and prior to Covid experienced regular annual double digit growth rates. In 2021, the business had already recovered 90 % of its pre Covid revenue. In addition, sales are forecasted to increase significantly in 2022 as insurance adjusters and contractors start catching up on their existing Covid related backlogs.

In the past decade a large number of solid and loyal relationships have been developed with insurance adjusters, contractors, universities, municipalities and the like. This has resulted in a steady flow of business coming into the company throughout the year. Demand is non seasonal and the existing customer payments generally come from insurance companies so receivables are not an issue. The small number of consumer projects are paid upon delivery of the restored product.

The current owner spends less than 40 hours per week managing the operation while enjoying more time on the running trail and with his grandchildren. In his absence, the existing management team successfully runs the operation with little oversight. The nine full time employees are long term, loyal and non-union. A new owner committed to growth could pursue opportunities like textile restoration and adjuster education on how to salvage more damaged items.

Over the past three years the business has averaged revenues of over $ 860,000 which resulted in an average annual SDE (SDE = Sellers Discretionary Earnings is the normalized, historical cash flow available to pay an owner-operator and service debt) of $ 180,000 over the same 3 year period. In 2021 SDE hit a high water mark of $ 250,000.

With a favorable SDE multiple of 2.50x the business is priced aggressively at $ 449,000. The seller envisions an asset sale in which he retains cash and A/R while retiring all liabilities. The buyer, in addition to receiving the good will of the business, receives all fixed assets with a cost basis value of $ 146,000. For a qualified buyer, the seller will carry a mid – five figure note.

If you are searching for a profitable business priced less than $ 500,000 with significant barriers to entry, this is the company for you. For more information on this fantastic opportunity please contact Steve Huntley at 616 902 0898 or shuntley@praxisbusinessbrokers.com

Financial

  • Asking Price: $449,000
  • Cash Flow: $180,000
  • Gross Revenue: $860,000
  • EBITDA: N/A
  • FF&E: $146,000
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 2011

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:15,000
  • Lot Size:N/A
  • Total Number of Employees:9
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

Operating out of a 15,000 square foot updated warehouse in a desirable suburb of a major West Michigan city.

Purpose For Selling:

Retirement

Additional Info

The company was founded in 2011, making the business 11 years old.

The business has 9 employees and is located in a building with approx. square footage of 15,000 sq ft.
The real estate is leased by the business for $0.00

Why is the Current Owner Selling The Business?

There are all sorts of reasons why individuals decide to sell companies. However, the genuine reason vs the one they tell you might be 2 entirely different things. For instance, they may state "I have too many various responsibilities" or "I am retiring". For lots of sellers, these factors are valid. But also, for some, these may simply be reasons to try to conceal the reality of changing demographics, increased competition, current decrease in incomes, or a range of other reasons. This is why it is extremely essential that you not depend entirely on a seller's word, but rather, use the seller's solution combined with your overall due diligence. This will repaint a more realistic image of the business's present circumstance.

Existing Debts and Future Obligations

If the existing business is in debt, which lots of businesses are, then you will have reason to consider this when valuating/preparing your deal. Numerous operating businesses finance loans so as to cover things such as inventory, payroll, accounts payable, and so on. Bear in mind that in some cases this can indicate that profit margins are too tight. Lots of organisations fall under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may likewise be future commitments to take into consideration. There might be an outstanding lease on tools or the building where the business resides. The business may have existing contracts with vendors that need to be satisfied or may lead to charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the area draw in new clients? Often times, businesses have repeat consumers, which develop the core of their daily profits. Certain elements such as new competitors sprouting up around the location, road building and construction, and staff turnover can affect repeat customers and also adversely affect future revenues. One essential thing to take into consideration is the location of the business. Is it in a highly trafficked shopping mall, or is it hidden from the highway? Obviously, the more people that see the business regularly, the higher the chance to construct a returning client base. A last thought is the general location demographics. Is the business placed in a largely populated city, or is it located on the outskirts of town? Exactly how might the neighborhood typical home income influence future revenue potential?