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A Specialty Auto, Light Truck, 46 Years Old, Very Profitable Repair Shop in North Denver Metro

AutomotiveFor Sale in CO

Listing ID: 33036 | Broker Listing ID: BLP985301

Financial & Assets Details

$968,000
$394,000
$80,000
$5,000
$640,000
1680+/-

About the Business

1976
4

Business Description

A Specialty Auto, Light Truck, 46 Year Old, Very Profitable Repair Shop
Great location for a location driven business in North Denver Metro

This company grew in adjusted earnings over the last 2 years. The trailing 12 months revenues to August 31st 2022 were 968K with adjusted earnings of 394K which is a 41% profit margin. Location driven business typically carry a high multiple because they don’t change the day after the closing but this one has absentee owners who don’t know the business and a 50% under-utilized shop which makes it even more attractive. The 690K sales price is only 1.75 times the adjusted earnings of 394K plus a small amount of inventory worth under 5K. Their revenues and profits are recession-proof because they perform necessary maintenance and repairs.

This is not a franchise. The business was started in 1976 by a father and his son. The son bought out the father’s interest in the 1990's and continued to work daily at the business until his death. The brother willed the business and the property to his 2 sisters. They had their own careers and have never worked actively in the business. One of them stops by weekly to check on the employees and the shop and approves payroll. Upon his death, their brother, out of loyalty, asked that his sisters allow the 2 long term employees to keep their jobs and long as they own the business. The manager has been with the company for 35 years and the assistant manager, 25. In recent years, most likely due to the lack of supervision, they have chosen to no longer work Saturdays, no longer take walk-ins(work by appointment only scheduled before 4PM), and have narrowed the services offered to only exhaust work including catalytic converters. They stopped doing brakes, shocks struts, and have pulled back on custom exhaust work.

The building sits on a .361-acre lot, has 3 large bays with lifts but limited storage. This property is also for sale contingent with the sale of the business. I have represented a lot of these types of businesses and there are several add on services that the new owner could provide beyond restoring the brake, shocks, and struts services, to include but not limited to oil changes, windshield wipers, filters/belts, headlight restoration/replacement, batteries, tires, and fluid checks/flushes.

The buyer will get at least 80K in current value of equipment, tools, lifts, pipe bender, etc. The shop is currently open M-F 8AM to 5PM but the manager usually closes and leaves early than 5PM by scheduling appointments earlier.

The business has a 4.2 Star Rating on Google with 188 reviews which is good for a car repair shop, and they also have an A+ rating by the BBB. The owners have never asked for reviews. The new owner should be able to improve upon this.

The sales price is 690K which is only 1.75 times the 394K in trailing 12 month earnings plus a small amount for inventory. This business will qualify for an SBA bank loan. A bank will only require 10% to 15% matching from a qualified buyer, meaning a buyer may qualify to buy this business with only 60K in liquidity. The real estate is being offered separately for 640K. The real estate and business are both contingent on each other on the same day(closing day). Banks prefer deals with real estate and the SBA has a program that allows both the business and real estate payments to go out 20 or more years which is a big advantage for the business which is typically pegged at 10 years.

Details:

They work on all types of automobiles, light trucks, and pickups up to two tons as well as RV's. There are two owners, who don't know the car business and 3 employees, two full time and 1 part time bookkeeper.
The manager is getting older but has a strong working knowledge of the business and has shown an interest in staying as the exhaust expert. He currently quotes prices, orders, installs, manages the shop as well as the property. While he makes a generous income based on both salary and sales commissions of 124,802 over the last year, the shop has grown and maintained a great profit margin under his care. The current owners think a perfect scenario would be to keep him post-closing to assess how they might want to use him in the future.

The 2nd employee is an excellent mechanic. He was hired in 1998 and has seldom taken time off. He is a strong work ethic. He does most of the work on the cars. His income last year was 82,117 which includes some commissions. The owners feel he is a great asset to the business because he knows the business so well and was able and willing to support the manager with the physical labor that is becoming more difficult for him to do alone. He also speaks fluent Spanish and is capable of estimating work.

The owners state, "Our brother's wish was to keep the shop open and to provide employment for his two long term employees who had become his friends. He asked for 5 years and it's been over 7 years. We feel it is time to sell because the manager is no longer running the business as it was previously run with a variety of services. The shop is very profitable, but the bays are underutilized, should be growing, and expanding faster. We feel that it is time to sell and allow someone else to come in and take the shop to the next level."

Growth and Expansion: A new owner should increase the hours for the shop by opening on Saturday again which was always their best day. The perfect scenario goes beyond just adding back what they used to do and adding Saturdays again. A shop with 3 bays and a lot the size of theirs should consider adding struts, tires, and/or brakes, and/or everything which means oil and filters by adding a checklist like the “total car care” shops have. The business is on 2 heavy traffic 4 lane roads which with the proper signage would feed this shop all the business it could handle. The shop should also be open until 6:00 which is always a higher traffic busier time of day. A digital sign would also be important since it can advertise specials and be updated as often as wanted very easily. They have the room for tires and the room to accommodate an alignment machine. Tires can be very profitable and by having several racks visible to drivers, it can 2nd as a great way to advertise. Their location is on a busy corner and their building should be painted with brighter colors and draped with advertising as well. Adding walk ins again will increase profits. Ideally, an employee would greet the customer in front of a bay with an iPad and the checklist and options to choose from with prices. Then guide the customer to the waiting room.

They have a clean and professional shop. The new owner will probably look into adding to the building for additional storage. It is not necessary since many shops have agreements with auto parts stores where they can grab whatever they need quickly. They are in an area with several close by.

The seller will agree to full Reps and Warrantees to a solid legal and business standing, no “ghosts in the closet”. They have a great record for safety (OSHA) and no legal battles. If the client has a problem with their work, they fix it.

Awesome Location: The property is on .316 acres, or 13765 square feet, with a 1680 square foot rectangular building with a waiting room, bathroom, storage and 3 bays with 3 lifts. Additionally. there is a restroom on the west side of the building that is accessed from the outside and a storage unit on the east side of the building which is attached to the building, measuring, 15' L, 8'H, 3'D.

Thank you for your consideration,

Jeff C Eisnaugle
Business Broker Colorado, LLC
Direct 303-905-7607
Fax 720-524-6482
jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado LLC with information provided by the Seller. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections. The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction.

Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Business Broker Colorado, LLC and Jeff Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Growth & Expansion

A new owner should increase the hours for the shop by opening on Saturday again which was always their best day. The perfect scenario goes beyond just adding back what they used to do and adding Saturdays again. A shop with 3 bays and a lot the size of theirs should consider adding struts, tires, and/or brakes, and/or everything which means oil and filters by adding a checklist like the “total car care” shops have. The business is on 2 heavy traffic 4 lane roads which with the proper signage would feed this shop all the business it could handle. The shop should also be open until 6:00 which is always a higher traffic busier time of day. A digital sign would also be important since it can advertise specials and be updated as often as wanted very easily. They have the room for tires and the room to accommodate an alignment machine. Tires can be very profitable and by having several racks visible to drivers, it can 2nd as a great way to advertise. Their location is on a busy corner and their building should be painted with brighter colors and draped with advertising as well. Adding walk ins again will increase profits. Ideally, an employee would greet the customer in front of a bay with an iPad and the checklist and options to choose from with prices. Then guide the customer to the waiting room.

Location Details:

The property is on .316 acres, or 13765 square feet, with a 1680 square foot rectangular building with a waiting room, bathroom, storage and 3 bays with 3 lifts. Additionally. there is a restroom on the west side of the building that is accessed from the outside and a storage unit on the east side of the building which is attached to the building, measuring, 15' L, 8'H, 3'D.

Support & Training

They will help in a smooth transition

Reason for Selling:

Retiring

Listing ID: 33036

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