Very Profitable Specialty Niche Service Business

Highlights of Business
• Business is well established (25 years) and is a market leader
• Substantial repeat business
• Sales through April of 2023 are up 25% over the same period of 2021, the company’s previous biggest year
• Few employees, low turnover
• Seller works 30-35 hours per week and only rarely on nights or weekends
• Clean books and records
• Seller will train
• Business qualifies for SBA financing, which means lower down payment and longer terms
• Seller will sign a non-compete agreement
• No inventory required in this business
• Immediate profitability – take over one day, be profitable the next

The seller is representing that the Discretionary Earnings for the business are $308,684 and that they can prove it to a buyer and their accountant.

This business qualifies for SBA financing, since it has good books and records, and is priced attractively for its Discretionary Earnings.

The seller estimates that $30,000 would be needed for working capital. Buyers should consult their accountant if necessary, to determine if that is an appropriate amount of working capital for this business. Most lenders would be happy to loan that much or more in working capital for this business, as the cash flow from the business would fully support it.

Down payment for the business would be approximately $91,550, assuming an SBA loan, sales price of the business of $859,000, $30,000 borrowed for working capital, and loan expenses added to the SBA loan of $26,500.

The advantages of a business being able to be financed with an SBA-guaranteed loan are:

1) A lower down payment than a seller would require were they providing financing (typically only 10% of the Project Cost is required by SBA rules);
2) A much longer term than a seller would offer (typically 10 years per SBA rules); and
3) A lower interest rate than a seller would typically offer (currently around 10.0%).

Often a conventional loan is not a possibility in financing the purchase of a business, because the cash flow of most successful businesses is worth more than the value of the business’ assets, so there is insufficient collateral to secure a conventional loan. SBA loans are based on the cash flow of the business and are less dependent on the amount of collateral available.

This is a professionally managed business with substantial repeat business and which provides a service which is in constant demand and which is priced attractively for its Discretionary Earnings. Interested parties should not delay in requesting additional information on the business.

Down Payment: $91,550

Total Sales: $870,772

Cash Flow: $308,684

EBIT: N/A

EBITDA: N/A

Accounts Receivable: N/A

Accounts Receivable Included: No

FFE: $150,000

FFE Included: Yes

Inventory: N/A

Year Established: 1998

Days & Hours of Operation: Mon-Fri, with occasional evenings or weekends

Owner Hours Per Week: 30-35

Lender Pre-Qualified: Yes

Non-Owner Payroll: N/A

Employees: 7 FT including seller and 1 PT

Managers: One manager besides the owner

Absentee Owner: No

Lease Option: The seller will rent the real estate to the purchaser for $3500 per month gross lease

Real Estate: N/A

Real Estate Included: No

Monthly Rent: $3,500

Type of Location: office/warehouse

Square Footage: 6,000

Franchise: No

Relocatable: No

Reason For Sale:

Retirement

Training & Support:

The seller will provide 4 weeks of dedicated training at no additional cost.

Competition:

The business has only one comparable competitor in the area. One of the attractive features of this business is its low level of competition.

Potential Growth:

According to the seller, there are several ways this business could be grown, including more participation in area networking groups.

Financing/Terms:

This business qualifies for SBA financing, since it has good books and records, and is priced attractively for its Discretionary Earnings.

The seller estimates that $30,000 would be needed for working capital. Buyers should consult their accountant if necessary, to determine if that is an appropriate amount of working capital for this business. Most lenders would be happy to loan that much or more in working capital for this business, as the cash flow from the business would fully support it.

Down payment for the business would be approximately $91,550, assuming an SBA loan, sales price of the business of $859,000, $30,000 borrowed for working capital, and loan expenses added to the SBA loan of $26,500.

The advantages of a business being able to be financed with an SBA-guaranteed loan are:

1) A lower down payment than a seller would require were they providing financing (typically only 10% of the Project Cost is required by SBA rules);
2) A much longer term than a seller would offer (typically 10 years per SBA rules); and
3) A lower interest rate than a seller would typically offer (currently around 10.0%).

Often a conventional loan is not a possibility in financing the purchase of a business, because the cash flow of most successful businesses is worth more than the value of the business’ assets, so there is insufficient collateral to secure a conventional loan. SBA loans are based on the cash flow of the business and are less dependent on the amount of collateral available.