← Back to SearchBusinesses for Sale
PRINT
Verified Listing

Busy Full Service Denver Trailer Dealership, Up in Earnings and Revenues, Full Pipeline of Future Order and Sales

AutomotiveFor Sale in CO

Listing ID: 31019 | Broker Listing ID: BLP245193

Financial & Assets Details

$3,470,000
$320,000
$93,000
$526,000

About the Business

2003
8
$12,500
Yes

Business Description

Denver Metro Trailer Dealer
Great Location: Denver, CO

The result of the latest 12 months revenues and earnings to 4 30 2022 brought the revenues up to 3.47M, the earnings up to 320K which now makes this the lowest multiple of the 4 trailer companies that I have represented in the past. This company is being offered at 560K which is now only 1.75 times the earnings plus inventory. This is a very low multiple for a trailer dealer that is growing.

I also wanted to address a question that I get frequently: Isn’t the sales price actually going up instead of down with the rebuilding of the inventory? The answer is no. Inventory should be thought of as more valuable than cash being left in the business for the following reasons: The more variety of trailers you have in stock, the more trailers you will sell. You will own the trailers, post-closing, at their cost and the Seller will have paid the freight and the assembly for you. In addition, this allows you to finance the purchase of the inventory through an SBA bank loan or similar. When you sell a trailer, you will recover the cost of the trailer PLUS 25% profit, which is this dealer's standard markup for new trailer sales. In addition, you will recover the freight cost that the seller has already paid, which can be anywhere from 200 to over 2000 dollars per trailer.

If the inventory levels were low, you would sell fewer trailers and make less money. One reason the company is enjoying increased sales today is that the owner has done an excellent job of keeping a steady supply of new trailers on order. The owner has done a good job of anticipating future demand and ordering trailers 6 months in advance resulting in a great selection of trailers currently in stock which has been key to the increasing sales and record revenues.

This seller wants to retire. He has a very successful and solidly established business that is ready for a new owner to step in.

For Sale:

DENVER METRO FULL-SERVICE TRAILER DEALER

Over 15 years old, well-established full-service trailer dealership with 7 employees plus the owner. The company sells, repairs and services all types of trailers. They can perform any kind of repair or modification to almost any trailer.

The company has seen steady growth on both the top and bottom lines for many years. Their earnings during 2020-21 were temporarily affected by Covid’s impact on the supply chain, which led to longer lead times to get new trailer inventory from the manufacturers. Within six months of Covid, all dealers were almost completely out of new trailer inventory and lead times kept rising which peaked in early Sept 2021 when most of the new orders were taking over 6 months to be delivered. Now that the lot is full of inventory again, a much smaller percentage of new sales need to be “ordered” which has returned them to record profits. These record profits are happening while the lead times are still averaging 6 months for new trailer orders that are not in stock. The owner has very effectively continued to order trailers to ensure a steady flow of new units coming in each month. As of April 2022, the lot has gone from empty 9 months ago to having 365K in new trailer inventory and 149K in parts and accessories IN STOCK. Plus, the backlog from customers deposits on new trailers which peaked at just over 130K in deposits in early Sept 2021 is down to 39K with 35K being normal. In other words, things are slowly returning to normal because he has learned how to order in advance of sales, keeping in mind the 6 month lead times for delivery of most new trailers.

Today, the majority of new trailer sales are made from inventory on the lot. Except for custom trailer orders, which are a small part of the company's trailer sales, this has significantly negated the impact of the long lead times and supply chain issues of the past year. The new owner will benefit significantly going forward by being able to just take over those full pipelines of future orders and sales.
The trailing 12 months to March 31st has 3.275M in revenue with 274K in earnings with very little add backs for the supply chain. The 2021 full-year revenues were 3.04M dollars with 243K in properly adjusted earnings. 2020 revenue was 3M dollars with earnings of 236K. The Covid add back is footnoted in the “adjusted earnings spreadsheet”. Prior to Covid, the business consistently trended higher year-over-year because they enjoy a high percentage of recurring revenues from a large established customer base. The sales price of 560K dollars is priced at a little over 2 times the earnings, plus the cost of inventory, which is currently estimated to be 365K in new trailers, 12.5K in used inventory, and 149K in parts, accessories, and steel. The actual amount of inventory will fluctuate daily as inventory is sold and new inventory arrives.

The owner is retiring and is eager to transfer the reins to a new owner. Since the beginning of Covid, he has worked primarily from home. But his very competent staff has effectively managed the day-to-day affairs of the business in his absence. He works remotely from home most days.

They sell a wide range of trailers for construction, farming, motorsports, and recreation, plus most types of commercial and personal uses. They have a wide selection and variety of trailers and an extensive inventory of parts and accessories and, in addition to parts sold through the service department, they enjoy a substantial amount of over-the-counter trailer parts sales.
The business continues to grow and thrive on repeat and referral business. They have hundreds of commercial customers who regularly come in for parts and service, as well as to purchase new trailers. The owner estimates that at least 50% of their revenues come from current and past customers, along with referrals from their wide customer base. There are also thousands of trailers throughout Colorado with their decals on them. Although the owner has been intimately involved in the business since its inception, he is not "the face of the business". This solidly established customer base will insure that a change of ownership will have little impact on the business, as long as the new owner continues to provide the same quality of sales and service that their customers have come to expect.
The buyer will also get 93,650 in current value of equipment, tools, furniture, computers, surveillance system, phone system, forklift, box truck, etc.

This company has a 4.7 Star Rating on Google, with more than 150 reviews, which is excellent. It is rated A+ by the BBB. They are also a member of the "North America Trailer Dealers Association" (NATDA). They have a great website which is hosted by a company that specializes in serving trailer dealers. The company has an excellent reputation in the marketplace which is very valuable to the new owner.

A bank will only require 10% to 20% matching from a qualified buyer, depending on the buyers’ experience. This means that a buyer may qualify with no more than 125K in liquidity. Also, a qualified buyer should be able to floor a substantial amount of the trailer inventory through several flooring companies. Any existing floor plan will be paid off at the closing so the SBA will have the ability to lien 100% of the revenue-generating inventory as they require.

The buyer will be required to obtain a Colorado "Franchised New Car Dealer" license to operate the business. This is obtained through the Colorado Motor Vehicle Dealer board.

Details:

This company sells, customizes, repairs, and performs regular maintenance on all types of cargo and utility trailers. They are a dealership offering top-quality trailers from some of the best trailer manufacturers in the country. And they have developed a niche' market for some trailers that are custom built. They are also happy to work with customers who need custom or special order trailers.
There are 7 employees plus the owner: 3 trained and skilled Technicians/Mechanics, a Service Manager, a General Manager who has been there since the business opened, a highly efficient Bookkeeper/Office Manager, and a very efficient and experienced Parts Manager. If a new owner wants to grow and add employees, they have a great location, plenty of parking, and steady growth to build on. The current employees have all proven their loyalty to the company and they work well together as a team. The Seller is willing to train a new buyer with little or no experience for a limited time as needed. But the buyer must have the drive and aptitude or experience to run a busy retail business. He/she should also have a strong sales mindset.

This business has many long-standing relationships, throughout Colorado, with businesses that use all types of trailers. It took many years to establish these highly-profitable relationships. This will be very valuable to the new owner going forward and means that the new owner will step into a steady stream of work at the closing. They always have a backlog of service businesses waiting. The owner believes there will be no issues in the transition as long as the quality of work that they do, and the way they treat their customers, do not change.

The business is 19 years old. It has a solid name and a highly respected reputation for fair dealings. The seller will agree to full Reps and Warranties to a solid legal and business standing. There are no “ghosts in the closet”. They have a great record for safety and no legal issues of any kind. They have never left a job incomplete. If the client has a problem with their work, they fix it.

Awesome location: The property is in a great location. The building and 1 acre of property has been leased since 2010. It has a 9,200 square foot building that is very functional for the business operations, with a 1,500 sq ft showroom, plenty of storage, 3 large offices, a break room, and a very large shop for service and repair of trailers. Security cameras are in place and there is plenty of parking. It can easily accommodate more employees and future growth. There is approximately 1 year left on the lease and the landlord has expressed a desire for the business to continue as a tenant. He will be willing to work with a new owner to provide a suitable new lease because the current lease doesn’t have an extension. The buyer can also assume the current below-market lease and either move the business or renegotiate a new lease in 2022 before the February 2023 expiration date.

Growth and Expansion: The current owner has done very little advertising/promotion for the past several years, relying almost solely on website-generated traffic, plus the steady flow of repeat and referral business. A new owner, with the energy and experience to promote the business, will have many opportunities to grow this already solidly established business. The owner believes one immediate expansion opportunity is to add trailer rentals.

The business is mostly recession-proof because they sell necessary trailers, make necessary repairs, and can sell all types of trailers.

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 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. If you have received this e-mail message in error, please reply to the sender and delete it from your computer.
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 Chapman Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Growth & Expansion

The current owner has done very little advertising/promotion for the past several years, relying almost solely on website-generated traffic, plus the steady flow of repeat and referral business. A new owner, with the energy and experience to promote the business, will have many opportunities to grow this already solidly established business. The owner believes one immediate expansion opportunity is to add trailer rentals.

Seller Financing

5%

Market Competition:

This company sells, customizes, repairs, and performs regular maintenance on all types of trailers. They are a dealership offering top quality trailers from some of the best trailer manufacturers in the country.

Location Details:

Awesome location: The property is in a great location. The building and 1 acre of property has been leased since 2010. It has a 9,200 square foot building that is very functional for the business operations, with a 1,500 sq ft showroom, plenty of storage, 3 large offices, a break room, and a very large shop for service and repair of trailers. Security cameras are in place and there is plenty of parking. It can easily accommodate more employees and future growth. There is approximately 1 year left on the lease and the landlord has expressed a desire for the business to continue as a tenant. He will be willing to work with a new owner to provide a suitable new lease because the current lease doesn’t have an extension. The buyer can also assume the current below-market lease and either move the business or renegotiate a new lease in 2022 before the February 2023 expiration date.

Support & Training

Will stay up to 4 months with compensation

Reason for Selling:

Retiring

Listing ID: 31019

Contact Broker

  • In order for our sellers and brokers to track interested parties, the seller/broker contact information we have will be immediately displayed once you click request.

    Please send me more information about this listing. My contact information is as follows:
  • This field is for validation purposes and should be left unchanged.