Business Overview

Thanks for checking out this ad. For sale are two branded postal stores. The seller owns these while keeping his full time job. In 2019 his sales were a combined $377k, in 2020 they were $391k and for 2021 his sales were 486k. Good growth on the top line showing this business model is not struggling even through Covid. And 2022 is tracking even better than 2021.

When looking at businesses on bizbuysell you should do a trial P&L in your head and see if the numbers can hold water, do they even make sense? For example on this listing:

Rent for both locations is a combined $10,211/month NNN (all in). Fair rent for two busy retail shops in excellent locations. Renewals are available. You want rent to be below 20% of sales. With $40.5k a month in sales, rent on this business is at 25%, a little high.

Labor ran an actual $9,180k a month for both locations including managers in 2021, 22%. That’s great when most business run 30%, but maybe it’s a little low. You’ll want to make sure the employees are being paid fairly and not overworked. But for such a low labor, service based product it’s reasonable.

COGS were actual $148k on $486k in sales or 30.5% in 2021. Dead center for industry norm. He has done a good job raising prices as cost have increased and customers continue to demonstrate their willingness to pay those higher prices.

Example Close:

Top Line $486,062 – Rent 122,532 – Labor 110,160 – COGS 147,813 – 5% for Misc @ $24k = $81,557. Of course other things come up and this owner is saying he makes $70k a year, so this passes a smell test and is worth looking into a little more.

Financial

  • Asking Price: $210,000
  • Cash Flow: $70,000
  • Gross Revenue: $486,000
  • EBITDA: N/A
  • FF&E: $20,000
  • Inventory: $1,000
  • Inventory Included: Yes
  • Established: 2010

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:3,000
  • Lot Size:N/A
  • Total Number of Employees:5
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

2 retail location located in busy shopping centers.

Is Support & Training Included:

The seller will spend 2 weeks training you in person, by phone and with the help of the current staff.

Purpose For Selling:

Focus on career and family

Pros and Cons:

This particular store has the corner on the market for a few local carriers and people drive over an hour to use this drop off location.

Opportunities and Growth:

With more employees working from home and more businesses giving up their office address, professional mailboxes are often the only alternative to using your home address for business. In addition to having room for expansion in this area they have also recently added digital mail which is where you scan people's mail and email it to them for a fee. It could be reasonable to rent out all of the mailboxes and pay the rent for these business just on those.

Established Franchise:

This Business Is An Established Franchise

Additional Info

The business was established in 2010, making the business 12 years old.
The transaction will include inventory valued at $1,000, which is included in the requested price.

The company has 5 employees and resides in a building with approx. square footage of 3,000 sq ft.
The real estate is leased by the company for $10,211 per Month

Why is the Current Owner Selling The Business?

There are all types of reasons why individuals choose to sell companies. Nevertheless, the true factor and the one they say to you may be 2 completely different things. As an example, they might claim "I have too many other obligations" or "I am retiring". For many sellers, these reasons are valid. But also, for some, these may simply be reasons to attempt to conceal the reality of altering demographics, increased competitors, recent decrease in revenues, or a range of various other reasons. This is why it is extremely vital that you not rely absolutely on a seller's word, however instead, utilize the seller's answer together with your general due diligence. This will repaint a much more reasonable image of the business's present circumstance.

Existing Debts and Future Obligations

If the existing entity is in debt, which lots of companies are, then you will certainly have reason to consider this when valuating/preparing your deal. Numerous businesses take out loans in order to cover items like inventory, payroll, accounts payable, so on and so forth. Remember that sometimes this can suggest that earnings margins are too tight. Many companies come under a revolving door of taking loans as a way to pay back other loans. In addition to debts, there may likewise be future obligations to think about. There may be an outstanding lease on tools or the structure where the business resides. The business might have existing agreements with vendors that should be satisfied or might lead to penalties if canceled early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the location bring in brand-new clients? Most times, businesses have repeat consumers, which create the core of their day-to-day profits. Certain aspects such as new competition growing up around the location, road building and construction, as well as staff turnover can impact repeat clients and also adversely impact future earnings. One important thing to take into consideration is the location 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 on a regular basis, the higher the possibility to construct a returning customer base. A last thought is the general location demographics. Is the business located in a largely populated city, or is it situated on the outside border of town? Just how might the regional typical household income influence future earnings potential?