Profitable Flower Shop in Great Location
It has been a great 42 year run for the owner-operator of this upscale, attractive profitable flower shop and retailer of home décor accessories. Located in a suburb adjacent to an important mid-Michigan city, the owner of this successful and large business is ready to transition the business to only its third owner. After an appropriate training period for the buyer, the seller plans to retire.
The business has been located for almost four decades in a wonderful, free-standing 1400 square foot building. The store offers a cozy environment in which it generates on average an impressive $600,000 of annual sales. The business is ideally located at an important, busy corner where two major surface streets intersect. There are curb cuts off both streets giving customers easy access to the dedicated parking spaces just a few feet from both entrances to the business. A favorable lease that has nominal rent of only 2.0% of revenues is currently in place.
10 loyal and talented employees (several of whom are trained floral designers) with help from a few seasonal workers, handle all sales, 50% of which are derived from business and organization clients, 20% from weddings and 30% from general retail including holidays, special days, graduations, parties, and the like.
The business, which records $130,000 of average, annual SDE (sellers discretionary earnings - the normalized, historical cash flow available to pay an owner-operator and service debt), is being offered for $275,000, an attractive 2.0x multiple of SDE. Approximately $35,000 (cost basis) of salable inventory is included in the sale price. The purchase price includes: (1) all furniture and fixtures; (2) a user friendly and very functional POS system; (3) all inventory; (4) an impressive and very active website; and (5) two delivery vehicles. In addition, to expedite a timely sale, a meaningful seller note will be available for a qualified buyer. Finally, this well-established business has solid, professionally prepared financial statements which should ease the due diligence process.
Meaningful internet sales generated through the company’s website exploded to nearly 90% of total revenues during the Covid-19 shutdown. In the aftermath, internet sales have stabilized at a very impressive 30% of total sales. As a result, the business, through eight months of 2021 is tracking a record year with respect to both sales and SDE. The seller feels there are tremendous growth opportunities by expanding online presence, increasing store hours, and possibly expanding the home decor lines (which currently account for only a modest 10% of sales).
A solid buyer with a 15% ($40,000) down payment should qualify for both $40,000 of seller paper and a $195,000 SBA bank loan. Debt service for the two loans combined would approximate $30,000 annually leaving $100,000 for the buyer to pay himself and/or for other discretionary uses of the $100,000 of free cash flow.
The seller contemplates an asset sale in which cash and A/R are retained by the seller while all other asset categories will be included in the sale price. Additionally, the seller will be responsible for retiring all liabilities at or before closing. For more information on this attractive, niche business opportunity, please contact Mike Greengard ([email protected] or 616-450-0707).