Business Overview

It has been a great 10 year run for the owner-operator of this venerable, profitable hardware store which offers product combinations not seen elsewhere in Michigan. Established over 50 years ago this store is a fixture in its desirable Southeast Michigan community offering both standard hardware fares while having two surprising additional profit centers.

Located in an 8,000 square foot building, the business uses nearly 6,000 square feet of floor space for retail sales with the remainder used for storage. The real estate (owned by the seller) includes an ample, adjacent parking lot and store entrances in front and back. The seller plans to lease the real estate and building to the new owner for a favorable lease of less than 4.0 % of revenues. The real estate may also be purchased in a separate transaction for the current market rate of approximately $330,000.

Over the past four year period, the business has had average annual sales of $720,000 with an annualized run rate of $800,000 over the past 20 months. Over the same 20 month period, the business has had an impressive annualized SDE of $170,000. (SDE = seller’s discretionary earnings: the historical, normalized cash flow available to pay the owner-operator and service debt.)

The business comes with $500,000 (cost basis) of inventory on which the seller plans to offer the buyer a very friendly 50% inventory adjustment (through discounts and consignment) of $250,000 (to a final inventory value of $250,000). The $250,000 of inventory plus an attractive 2.25x multiple of SDE results in a value price of $632,000 for the business (2.25 x $170,000 = $382,000 + $250,000 (inventory) = $632,000.

The Seller, who plans to carry a $100,000 seller note for a qualified buyer, will give the buyer extensive transition training before he relocates out-of-state to care for family members. The business boasts a long-time, very capable general manager who looks forward to staying aboard for the new owner-operator. The GM is assisted by a total of six full and part-time employees.

Approximately 60% of revenues are generated by the store’s hardware side. The business is affiliated with a desirable, well-known, highly reputable national buying group which offers its members a generous annual rebate program. The remaining 40% of revenues come from the two unrelated (to hardware) profit centers.

The seller envisions an asset sale in which he retains the cash and the minimal accounts receivable while retiring all liabilities. For more information on this well-established successful business, please contact Mike Greengard ( or 616-450-0707).


  • Asking Price: $632,000
  • Cash Flow: $170,000
  • Gross Revenue: $800,000
  • FF&E: N/A
  • Inventory: $250,000
  • Inventory Included: Yes
  • Established: 1970

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:6
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

8000 square foot building with an ample adjacent parking lot.

Is Support & Training Included:

Seller will provide extensive transition training.

Purpose For Selling:


Additional Info

The company was established in 1970, making the business 52 years old.
The sale shall include inventory valued at $250,000, which is included in the requested price.

Why is the Current Owner Selling The Business?

There are all sorts of reasons individuals resolve to sell operating businesses. However, the real reason and the one they tell you might be 2 totally different things. For instance, they may say "I have too many various obligations" or "I am retiring". For lots of sellers, these reasons are valid. But also, for some, these may simply be reasons to try to conceal the reality of transforming demographics, increased competition, recent decrease in profits, or a range of other reasons. This is why it is really crucial that you not rely totally on a vendor's word, yet instead, make use of the seller's response in conjunction with your general due diligence. This will repaint a much more reasonable picture of the business's current circumstance.

Existing Debts and Future Obligations

If the existing business is in debt, which lots of businesses are, then you will need to consider this when valuating/preparing your deal. Numerous companies take out loans in order to cover things such as inventory, payroll, accounts payable, and so on. Bear in mind that in some cases this can mean that earnings margins are too tight. Many businesses fall under a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may also be future obligations to think about. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing contracts with suppliers that need to be fulfilled or may result in fines if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do businesses in the location draw in new consumers? Most times, companies have repeat customers, which create the core of their daily revenues. Specific aspects such as brand-new competitors sprouting up around the location, road building, and staff turnover can impact repeat customers as well as adversely impact future incomes. One essential thing to take into consideration is the placement of the business. Is it in a very trafficked shopping mall, or is it hidden from the highway? Certainly, the more individuals that see the business often, the higher the opportunity to construct a returning consumer base. A final idea is the basic area demographics. Is the business situated in a densely inhabited city, or is it located on the outside border of town? How might the neighborhood typical household income influence future earnings prospects?