Opportunities
Improvement Projects Management – 272% Return on Investment
40% commercial and 60% residential and 2 territories in Greater Seattle!
Specifications
A 12.5% down payment of $362,500 returns $985,849 in the first year after debt payments, which is a 272% return on investment! Established in 2004, this business services Seattle, Washington and surrounding areas. Outsourcing all facility improvements, this business offers one-stop project management services for commercial businesses (40%) and homeowners (60%) alike! The current team includes one sales representative, two project managers, and one administrative personnel. Little equipment is needed to operate this successful business. They are boasting a 35% profit margin regularly.
With a well-established clientele, the company specializes in the management of construction projects which includes roofing, concrete or asphalt, turf installation, landscape construction, and snow removal. Aside from snow removal, most services are large ticket construction services such as outdoor living spaces, concrete projects, repaving parking lots, or landscape construction.
All hands-on work is completed by subcontractors, reducing the need for large equipment investments, inventory storage, or a large team. The current owner does some project management, along with oversight of operations. Great growth is possible through networking and building the customer base, targeted advertising, or expanding the territory as allowed. All territories can be managed with a team of four or less, and with minimal office space per territory.
Business Highlights
- Year Established: 2004
- Location: Seattle, Washington
- Service Area: Seattle and the surrounding areas
- Services: Management of facility and home improvement projects for residential (60%) and commercial clients (40%) such as roofing, concrete or asphalt, turf installation, landscape construction, snow removal
- Clients: Property managers and home owners
- Employees: One sales representative and one project manager
- Seller Training Period: 6 months
- Franchisee Support: Expert training and support for all operational aspects of the business
- Growth Opportunities: Build territory customers
- Owner’s Desired Qualifications: Enterprise builders who would love to manage a small team
- Owner’s Projected Responsibilities: Project management, oversight of operations
- Equipment: Little equipment is needed
- Inventory: Inventory is ordered by project and is drop-shipped or delivered to the subcontractor
Financial Highlights
- List Price: $2,900,000
- Gross Sales:
- 2020: $6,821,262 Annualized
- 2019: $3,853,417
- 2018: $3,328,519
- Cash Flow:
- 2020: $2,756,298 Annualized
- 2019: $1,356,710
Cash Flow Analysis
| Description of Financial Statement | P&L Statement January-June 2020 | P&L Statement | P&L Statement | Notes |
| 2020 | 2019 | 2018 | ||
| GROSS SALES | $3,410,631 | $3,853,417 | $3,328,519 | |
| Annualized | $6,821,262 | |||
| Net Income Shown on Financial Statement | $1,671,997 | $1,356,710 | $873,546 | |
| ADDBACKS | ||||
| Ad Fee | $-21,410 | $0 | $0 | |
| Tech Fee | $-7,800 | $0 | $0 | |
| 6% Franchise Royalty | $-204,638 | $0 | $0 | |
| Replacement Fee | $-65,000 | $0 | $0 | |
| TOTAL ADDBACKS | $-298,848 | $0 | $0 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $1,373,149 | $1,356,710 | $873,546 | |
| Annualized | ||||
| Profit Margin | 40.26 % | 35.21 % | 26.23 % |
- Profit margin 2019: 35%
| Royalty | 6% on total revenue derived during each respective month, with a minimum monthly Royalty of $1,750 | Each calendar month due not later than the 5th day following the end of the prior month. | Paid to us for our ongoing support and your use of the Marks & System. |
| Technology Fee | $650 currently, subject to period increases | Monthly, when the Royalty is paid. | Paid to us for use of the company website and related electronic media. |
| Advertising Fund Fee | 1% of Gross Revenue for the initial 6 months and then $1,500 per month. | Monthly, when the Royalty is paid. | Paid to us to promote the Marks and the System regionally or nationally. |
Services
- Management of facility improvement projects for:
- Residential customers (60%)
- Commercial customers (40%)
- Property managers
- Property owners
- Home owners
- Projects such as:
- Roofing
- Concrete
- Asphalt
- Turf installation
- Landscape construction
- Snow removal
- Other large construction projects
Employees
- If desired, one sales representative and one project manager could transition to the new team
- At maximum, a very small team would be necessary for full operations. It is suggested by the owner that at most, four individuals may be needed per territory. This includes a project manager, a sales representative, or an administrative support team member.
Growth Opportunities
- Build territory customers
- Add maintenance check contracts that may catch needed projects as they become necessary
- Expand territory as allowed
- Advertise to promote services to new potential customers
Funding Example
Purchase Price: $2,900,000
12.5%Buyer Down Payment: $362,500
12.5%Seller Financing: $362,500
75%Bank Loan: $2,175,000
Seller financing 5-year term at a rate of 4.50% equals a monthly loan payment of $6,758.
Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $24,147.
After business expenses and loan payments, a buyer with a 12.5% down payment of $362,500 would retain a profit of $985,849, which results in a 272% 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 $2,900,000 with the terms listed above, the coverage ratio is 3.66.
Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
*The Firm is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 2019 Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2019 Cash Flow |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
| Document Title / Description |
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