Successful Biz with Mfg, Dist, and Service Profit Centers
The owner of this excellent 35 year old business purchased it with a small down payment, an SBA loan and a seller note. Now, 11 years later he is debt free and boasts years of paying himself $100,000 annually. He plans to sell his business and rejoin industry in his dream part-time position. The seller’s life style change will give a new owner-operator the opportunity to repeat the seller’s successful business history.
The company is housed in an attractive, squeaky-clean, late model 13,500 square foot building located on a two acre parcel in a pleasant neighborhood of a very desirable West Michigan City. The real estate was purchased by the owner five years ago, and he will lease it to the buyer at a favorable triple net lease.
The company has three, valuable, loyal, full-time employees and three part-timers who are involved in one or more of the company’s four profit centers all of which are related to commercial floor care:
- Manufacturing, selling and servicing a branded line of propane powered commercial floor cleaning and waxing machines
- Producing, selling and distributing both branded and private label lines of commercial floor cleaning chemicals and disposable products
- Nightly floor care for 250,000 (+) square feet (and growing) of big box stores
- Operating as a warehouse (shipping/receiving) and back office for a major out-of-state service business which cleans and cares for the floors of 1000 (+) big box stores throughout the country.
This non-seasonal business has thrived throughout the entire Covid-19 pandemic as large retailers have ratcheted up the need for clean floors to a “no exceptions” level. And for a growth minded buyer, this business has opportunities galore especially in chemicals and floor care.
The business has average annual revenues of $1.1 million and records an average annual SDE (the historical, normalized cash flow available to pay an owner-operator and service debt) of $190,000. The business is being offered without real estate for $865,000 which is the sum of an attractive 2.95x multiple of SDE plus $310,000 of active, salable inventory. The sale price includes $275,000 (cost basis) of fixed assets, all inventory, and of course the goodwill of this established business.
The seller envisions an asset sale in which he retains cash and A/R while retiring all liabilities. The likely buyer would qualify for a low six figure seller note which when combined with a comparable amount of buyer cash would leave $645,000 for SBA financing. After servicing debt (SBA term loan + seller note), the buyer would have on average nearly $100,000 annually left for paying himself.
To learn more about this attractive, growing, affordable, cash-flowing niche manufacturing-distribution-service business, please contact Mike Greengard ([email protected]).