Opportunities
Commercial Concrete Repair & Maintenance
Sold
Specifications
This seasonal business grossing nearly $800,000 in sales during 9 months each year boasts a 90% recurrence in commercial clients. In operation since 1988, this company specializes in flat work, repairing curbs, driveways, sidewalks and parking lots. Jobs range from $5,000 to $100,000 in billing, with 7 workers able to complete 1 to 5 jobs per week. The season typically lasts from March through November, with workers on job sites from 7am to 3:30pm with occasional overtime as needed.
Located in a 4,000 sq. ft. building that is able to house all equipment and vehicles, and is leased at $2,000 per month. The office area is heated and covers 1,000 sq. ft. While the current owner does occasionally help out on job sites, most often he is in the office making bids and handling billing.
Included in the purchase is $150,000 worth of equipment and vehicles. Assets include 5 trucks, 4 trailers, power buggies, saws, drills and more. The current owner is looking to retire but will provide up to 90 days of transition and support.
Growth abounds in taking more bids, as the current owner has had to turn away jobs due to an inability to accommodate all the requests coming in. Simply hire more seasonal workers to handle the increase in demand, and explore doing new construction and more residential jobs.
Business Highlights
• Clientele: 20 recurring commercial clients (90% of business)– less than 10% are residential; jobs range from $5k to $100k; works 1 to 5 jobs per week
• Building: 4,000 sq. ft. with parking for trucks & equipment; roughly 1,000 sq. ft. is heated office area
• Lease: $2,000/month ($24,000/year)
• Employees: 6 FT from March – November, 1 FT foreman (repairs machinery during winter)
• Growth Opportunities: more bids, hire additional employees to take work currently turned away, new construction, more residential jobs
• Current Owner’s Responsibilities: bidding, billing, some site work
Financial Overview
Gross Sales
2016: $778,207
2015: $976,910
2014: $876,085
Owner Profit/Cash Flow
2016: $178,364
2015: $254,761
2014: $185,060
Assets Included in Purchase
Assets Included in Purchase: $150,000
Equipment: 4 trailers, 2 power buggies, 2 plate compactors, 2 skid loaders, air compressor, generator, 7 saws (concrete and general) & multiple drills
Vehicles: 1995 GMC Topkick, 1998 GMC Sierra, 2011 Chevy Silverado, 1995 Chevy C3500, 2002 Ford F350
Intangible Assets: loyal clientele
Recasted Cash Flow Analysis
| Description of Financial Statement | Tax Return | Tax Return | Tax Return | Tax Return | Notes |
| 2016 | 2015 | 2014 | 2013 | ||
| GROSS SALES | $778,207 | $976,910 | $876,085 | $664,873 | |
| % Change Over Prev. Year | -20.34 % | 11.51 % | 31.77 % | ||
| Net Income Shown on Financial Statement | $80,858 | $158,116 | $110,688 | $35,461 | |
| ADDBACKS | |||||
| Compensation to Owner | $54,000 | $72,155 | $56,400 | $58,900 | |
| Other unrelated Salaries | $18,400 | $23,355 | $18,000 | $17,500 | Spouse |
| 11% Tax on total W2 Salaries | $7,964 | $10,506 | $8,184 | $8,404 | |
| Depreciation | $15,681 | $1,424 | $1,453 | $2,294 | Non-cash item |
| Meals & Entertainment | $0 | $0 | $1,130 | $0 | Meals unrelated to business |
| Retirement Plan | $6,587 | $0 | $0 | $0 | Non-onward going expense |
| Rent Adjustment | $-10,795 | $-8,593 | $-10,795 | $-10,795 | Ongoing rent of $24,000/years ($2,000/mo) |
| Health Insurance | $13,285 | $0 | $0 | $0 | |
| Sale of Assets | $-7,616 | $0 | $0 | $0 | One time income |
| TOTAL ADDBACKS | $97,506 | $98,847 | $74,372 | $76,303 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $178,364 | $256,963 | $185,060 | $111,764 | |
| Profit Margin | 22.92 % | 26.30 % | 21.12 % | 16.81 % |
- 2015 was best year yet due to very little snow, allowing them to get more jobs done
- 2013 represents a year with heavy snow
- 2014 and 2016 are typical years, with both producing over a 20% profit margin
Services
- Flat work – all concrete work on a horizontal plane
- Concrete is precisely mixed with the right aggregates and delivered in a timely manner to the jobsite for proper curing
- Includes crack repair, chipping repair, settling issues and subgrade corrections for:
- Curb repair
- Driveways
- Sidewalks
- Patios
- Parking lots
- Gutters
- Pool decks and stairs
Equipment & Vehicles
• Thox 90-lob Paving Breaker
• Morrisor Power Buggy
• Dupaco Concrete Grinder
• Steel Concrete Forms
• Target Concrete Saw
• Boech Hammer Drill
• Paving Breaker 180
• Dynapac Power Float
• Honda Generator
• STIHL Cut Off Saw
• Honda Power Washer
• F8 Concrete Saw
• Laser Level
• Generator TPG 4300 HDX
• Makita Hammer Drill HR 400
• Makita Hammer Drill HR 100
• Soft Cut Saw
• Bobcat Breaker
• Sullivan Air Compressor
• STIHL 14’ Cut Off Saw
• Bobcat S185 Skidloader
• Bobcat S205 Skidloader
• Plate Compactor
• STIHL 14” Cutquick Saw
• Labounty Breaker
• Steel Skill Saw
• Canyon Power Buggy
• 1995 GMC Topkick
• 1998 GMC Sierra
• 2011 Chevy Silverado
• 1995 Chevy C3500
• 2002 Ford F350
Employees
- 1 FT foreman - $24/hour (16 years of experience)
- Guaranteed 40 hours plus overtime during busy season
- During the off season received $24/hour if he works repairing/maintaining equipment
- 6 FT seasonal workers including driver (5+ years of experience)
- 3 finishers are paid $20/hour
- 1 earns $15/hour
- 1 earns $18/hour
- 1 earns $22/hour
- All employees are given the option of a 3% Simple IRA match, paid holidays and 1 weeks’ vacation
- Bonuses are provided at the end of the year ($1/hour)
Growth Opportunities
• Hire more seasonal employees to tackle more jobs
• Work in new construction
• Increase residential work
Valuation Details
The Firm Business Brokerage used a Cash Flow Valuation methodology to determine the Purchase Price of the business.
The formula used is as follows:
Cash Flow x Prescribed Multiple = Fair Market Value
Cash Flow is the sum of business net income plus any owner perks and any non-onward going expenses.
A multiple is prescribed by a 20 question, 100-point parameter ranking system that is used to analyze the current business health. Each question is based on a scale from 1 to 5: 1 being low, 2 below average, 3 average, 4 above average, 5 high. The average of the responses sum is the business’ prescribed multiple.
With this information, the computation is as follows:
$178,364 x 2.9 = $517,255
The Fair Market Value found above positions the business List Price at $510,000
Funding Example
Purchase Price: $510,000
10% Buyer Down Payment: $51,000
20% Seller Financing: $102,000
70% Bank Loan: $357,000
Seller Financing 5-year term at a rate of 4.5% equals a monthly loan payment of $1,902.
Bank Loan 7-year term at a rate of 5.25% equals a monthly loan payment of $5,088.
After business expenses and annual loan payments of $83,873, a buyer would retain a profit of $94,491. A 10% down payment of $51,000 results in a 185% return on investment in the first year!
A lender is required to have a minimum 1.5 coverage ratio for any business loans extended. At a proposed Purchase Price of $510,000 with the terms listed above, the coverage ratio is 2.13. Please note that the decision of whether to extend a loan on any particular sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
Attached you will find the following:
- Business Summary
- Identifies important business information in an organized quick-reference format
- Equipment List
- Itemized list of equipment & vehicles included in the sale
- Contains pricing information
- Cash Flow Analysis
- Cash Flow is the owner profit, which is the sum of business net income plus any owner perks and any non-onward going expenses
- Cash Flow is the owner profit, which is the sum of business net income plus any owner perks and any non-onward going expenses
Print, sign and send to:
210 N 78th St. 2nd FloorOmaha, NE 68114
Or fax to:
f 402.939.0857