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Busy Tool and Small Parts Distributor and Dealer, 24% Profit Margin, 85% Recurring Revenue, Great Reputation

Wholesale/DistributionFor Sale in CO

Listing ID: 32927 | Broker Listing ID: BLP762594

Financial & Assets Details

$892,000
$217,000
$30,000
$115,000
4374+/-

About the Business

1981
4
$2,825
Yes

Business Description

41-Year-Old Growing Small Parts and Tools Distributor and Dealer in El Paso County Colorado

The trailing 12 months to July 31st, 2022 revenues were 892K with 217K in earnings. He must sell based on a worsening health issue. The company has strong 28 % revenue growth over the last 3 years with 80% growth in earnings. This business has grown both in revenues and in earnings regardless of Covid, inflation, and supply chain issues. One of the reasons their profits have been so consistent is that they bought an expensive industry software called the business edge which specializes in the fastener business and automatically adjusts their prices in real time as their cost of goods goes up or down.
The company distributes specialty and industrial fasteners. The company is a leader in servicing their customers’ needs for specialty and industrial fasteners. They sell quality brand products, maintains shelf stock for immediate delivery, inventory both domestic and imported products, have experienced staff, offers same day shipping for orders received by 2:00pm MST, and keeps loyalty by allowing a low minimum order. 75% of their sales are in El Paso County.

Most of their customers are long term customers which means that more than 85% of their revenues are recurring. Their profit margin averages 24% which is very good for a distributor. The company serves commercial clients in various custom ways: They either deliver in person or by parcel, they can customize and package almost any combination of assembly parts and include the tool(s) needed for the assembly for all types of products. As more items are ordered online the demand for custom assembly kits is growing. Plus, more and more products are requiring assembly upon delivery.

This company has a great reputation as proven by a 5 star Google Rating. The owner states, “We rely on great customer service to grow” which is proven by the advertising expense for the trailing 12 months being only 787 dollars. In addition, the business is located in a great location where they have offices, a warehouse, storage, loading dock, parts counter, etc. Their parts “counter” is busy based on their large and diversified inventory and location. The warehouse is only about 60% utilized which allows for growth in stocking more fasteners or expanding into an add on industry. The building is underutilized as you can see in the video interview and walkthrough in the data room in the sales package which will be sent once you submit the NDA. The company also has no workman’s comp claims which means they have been a very safe business. This company’s ratings are very valuable to the new owner for future marketing .

The owner maintains a 50-hour work week over 5-days. The new owner will need to hire an admin who will answer the phone and do the bookkeeping which will include his 10 hours a week of inputting the daily invoices. I have footnoted this adjustment on the adjusted earnings spreadsheet that is in the data room.

The 490K sales price includes approximately 30K in current value assets made up of shelving, filing cabinets, office equipment, a Chevy 2,500, a forklift, office supplies, and small tools/equipment. The inventory varies and is currently 115K. The sales price does not include the inventory. The Sales Price is only 2.25 times the trailing 12 months earnings of 217,544. This is a great opportunity not only because of the low price to earnings, 24% profit margin, 85% recurring revenues, 5-star Google Rating, quality and loyalty of employees, long-term customers, underutilized location, and the fact that this is a “Fun” business to own.

The buyer can anticipate a very smooth transition with the owner, employees, and customers who depend on this company. The business should be the same the day after the sale as the day before since this business services a need. He spends 30 hours a week out visiting customers and delivering products. He will offer a full transition for as long as the new buyer wants him to.

This is an LLC and is an asset purchase. It is priced as an Asset Sale, which means the business will be offered with the Seller keeping his cash, AR, and AP and transferring the business debt-free. He will leave any unused customer deposits.

Location: El Paso County, CO

Details:

The buyer will also step into a solid business that has a lot of room to grow. The company has 2 trustworthy, competent, and reliable employees and his part time parents. The Seller believes all employees are loyal, love their jobs, and will all stay after the transition. The Seller will sign a non-compete.

The current owner has focused on ensuring that there are good internal processes in place. They have a great reputation for the quality of their work, dependability, and for fair dealings. The seller will agree to full Reps and Warranties to a solid legal and business standing. They have a great record for safety (OSHA) and no legal issues. The seller will offer “to off-set” against the sales price for any liabilities originating before the closing and indemnify the financials.

Growth & Marketing Opportunities: The company does virtually no advertising. The on-location warehouse is only 60% utilized. There is room for at least another 3 employees with the space that he has. The business has 450+ verified emails from past business contacts and customers. He has done no SEO or other website marketing. There are many ways to increase sales.

Their location is leased with a 4374 square foot building with 4 3/4 years left on a great lease and a landlord who will be happy to negotiate a longer lease. The lease is only 2,825 dollars per month plus triple net. The business is in a safe location with zero break ins or theft. There are 2 offices, a large bathroom, high ceilings, a parts counter with POS equipment, packaging area, shipping area, receiving loading dock, storage room, and plenty of parking.

The broker is available at any time to discuss your interest in this offering and can set up a meeting either in person or by phone with the owner(s).

Thank you for your interest,

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

Growth & Expansion

The company does virtually no advertising. The on-location warehouse is only 60% utilized. There is room for at least another 3 employees with the space that he has. The business has 450+ verified emails from past business contacts and customers. He has done no SEO or other website marketing. There are many ways to increase sales.

Market Competition:

This company has a great reputation as proven by a 5 star Google Rating. The owner states, “We rely on great customer service to grow” which is proven by the advertising expense for the trailing 12 months being only 787 dollars. In addition, the business is located in a great location where they have offices, a warehouse, storage, loading dock, parts counter, etc. Their parts “counter” is busy based on their large and diversified inventory and location. The warehouse is only about 60% utilized which allows for growth in stocking more fasteners or expanding into an add on industry. The building is underutilized as you can see in the video interview and walkthrough in the data room in the sales package which will be sent once you submit the NDA. The company also has no workman’s comp claims which means they have been a very safe business. This company’s ratings are very valuable to the new owner for future marketing .

Location Details:

Their location is leased with a 4374 square foot building with 4 3/4 years left on a great lease and a landlord who will be happy to negotiate a longer lease. The lease is only 2,825 dollars per month plus triple net. The business is in a safe location with zero break ins or theft. There are 2 offices, a large bathroom, high ceilings, a parts counter with POS equipment, packaging area, shipping area, receiving loading dock, storage room, and plenty of parking.

Support & Training

Will stay as long as needed

Reason for Selling:

Health reasons

Listing ID: 32927

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