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Stone Restoration & Tile Care for Businesses and Hotels

Over 1,600 active clients in Phoenix Metro and low overhead that produces a 44% profit!

CASH FLOW
$184,595

Specifications

  • Price
    $640,000

  • Revenue
    $404,026

  • Cash Flow
    $184,595

  • Location
    Phoenix Metro Area

  • Service Area
    Phoenix Metro Area

  • Employees
    5: 2 Technicians, 1 manager, 1 administrative/sales, 1 financial oversight

  • Profit Margin
    44%

  • Intangible Assets
    Superior social media reviews, excellent reputation, high quality services, well-trained team, excellent profit margins

  • Reason for Sale
    Retirement

This business over 1,600 active clients in Phoenix Metro and low overhead costs that produce a 44% profit! Established in 2013, this full-service stone cleaning, honing, polishing, and repair company that also provides full-service carpet and tile care operates in the Phoenix Metro area.  Two efficient technicians manage the entire on-site workload which involves cleaning, sealing, polishing, honing, stripping, repair, and treatment for all-natural stones as well as tile and carpet cleaning. The staff also includes a manager, an administrator/salesperson, and an overseer of the financials. Two vans are included in the sale and contain hot water extraction machines, high-speed weighted buffers, tools, and cleaning supplies. All work is done for high-end homeowners, commercial businesses, hotels, banks, condominiums, or anyone with natural stone surfaces within the Phoenix Metro area.

The business operates from one warehouse that is not open to the public.  They do utilize a virtual office when it is needed, but operations can be run remotely with ease. The team may be lean but is incredibly effective in running the business day-to-day. The owner currently handles scheduling and operations.

This business has superior social media reviews, an excellent reputation, high quality services, and a well-trained team in place. Revenue growth would certainly be obtained by advertising, infusing capital into an additional van to increase capacity, or maximizing current assets with extended hours to generate additional income.

 

Business Highlights

  • Year Established in Arizona: 2013
  • Location and Service Area: Phoenix Metro Area
  • Clients: Businesses, hotels, high end homes and anyone with natural stone surfaces
  • Active Clients: 1,605 current active clients
  • Services: Full-service stone restoration including cleaning, honing, polishing, and repair, as well as full-service carpet and tile care 
  • Lease: 1,000: Warehouse, inside parking, virtual administrative office
  • Reason for Selling: Retirement 
  • Employees: 5: 2 Technicians, 1 manager, 1 administrative/sales, 1 financial oversight
  • Seller Training Period: 3 months
  • Growth Opportunities: Advertise, expand the current business model, infuse capital to add another can to increase capacity, maximize current assets with extended hours 
  • Current Owner’s Responsibilities: Scheduling and operations 

Financial Highlights

  • List Price: $640,000
  • Gross Sales:
    • 2019: $404,026
    • 2018: $370,485
    • 2017: $236,573
  • Cash Flow:
    • 2019: $179,203
    • 2018: $232,288
  • Assets Included in Purchase*
    • Equipment: $115,000: 2 vans equipped with truck-mounted hot water extraction equipment, high-speed weighted buffers, tools, and supplies
    • Intangible Assets: Superior social media reviews, excellent reputation, high quality services, well-trained team, excellent profit margins

*amounts may vary

Cash Flow Analysis

Description of Financial StatementP&L Statement
Cash
P&L StatementP&L StatementNotes
201920182017
GROSS SALES$404,026$370,485$236,573
Net Income Shown on Financial Statement$36,771$154,080$62,350
ADDBACKS
Compensation to Owner$114,000$50,000$25,000
11% Tax on total W2 Salaries$12,540$5,500$2,750
Depreciation$0$0$35,749
Interest$2,225$6,871$2,431
Meals & Entertainment$390$253$627Personal expense
Cell Phone$1,080$1,080$1,080$90/month for personal cell phone
Insurance $10,780$10,780$10,780$898.36/month for personal insurance
One Degree Insurance$564$564$0Non-onward going expense
Travel$853$1,660$1,476Personal expense
Donations$0$1,500$50
TOTAL ADDBACKS$142,432$78,208$79,943
Seller's Cash Flow = Total Addbacks + Net Income$179,203$232,288$142,293
Profit Margin44.35 %62.70 %60.15 %
.
  • Profit Margin 2019: 91%

Typical Clients

  • High-end homeowners
  • Businesses
  • Hotels
  • Anyone with natural stone surfaces

Specific information regarding clients is available upon the receipt of a signed Non-Disclosure Agreement.

Services

Full-service stone maintenance including:

  • Cleaning
  • Sealing
  • Polishing
  • Honing
  • Stripping
  • Repair
  • Treatment

Full-service carpet cleaning

Tile & grout cleaning

Employees

Total Employees: 5

  • 2 Technicians
  • 1 Manager
  • 1 Administrative
  • 1 Financial oversight

Growth Opportunities

  • Advertise
  • Expand the current business model
  • Infuse capital to add another van to increase capacity
  • Maximize current assets with extended hours

Valuation Details

The Firm 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.

For this business, a 3 Year Average Cash Flow was used with a prescribed multiple of 3.45.  With this information, the computation is as follows:

$184,595         x          3.45       =          $636,853

The fair market value found above positions the business list price at $640,000

 

Funding Example

 

Purchase Price:                             $640,000

10%Buyer Down Payment:        $64,000

10% Seller Financing:                 $64,000     

80%Bank Loan:                         $512,000

Seller Financing 5-year term at a rate of 4.50% equals a monthly loan payment of $1,193.

Bank loan 10-year term at a rate of 6% equals a monthly loan payment of $5,684.

After business expenses and loan payments, a buyer with a 10% down payment of $64,000 would retain a profit of $102,066 which results in a 159.5% return on investment in the first year.

A lender is required to have a minimum 1.25 coverage ratio for any business loans extended. At a proposed purchase price of $640,000 with the terms listed above, the coverage ratio is 2.24.

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 Business Brokerage is not a real estate brokerage and therefore the staff will not handle any aspect of the lease, sale or purchase of real estate.

Purchase Price:

$640,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

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:
3 year average cash flow
$
Annual Debt Service: $
RATIO:

Buyer's Net Operating Income (NOI)

The amount of money the Buyer will retain as profit.

Cash Flow:
3 year average 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: %

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210 N 78th St. 2nd Floor
Omaha, NE 68114

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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.