East Denver Residential Restoration and Remodeling Company, Skilled and Loyal Employees, Great Reputation

Financial & Assets Details

About the Business

Business Description

Residential Restoration and Remodeling Co

The trailing 12 months of revenues to March 31st were 2.8M with 259K in earnings. The company has been growing for many years. 2022 had 2.55M in revenues and 261K in earnings. The sales price is only 465K which is less than 1.8 times their earnings.

The company has had steady growth and expects that to continue with several ways for the new owner to increase the growth rate. They do 40% restoration and 60% remodeling work and interior and exterior work all through non-employee workers who are part of independent crews often referred to as “subs”. The 40% restoration is driven by insurance agents they’ve developed relationships with as well as some insurance claims that come from their print advertising. They are not part of any TPA’s (Third Party Administrators) The insurance restoration work is year-round with frozen pipes in the winter, hail in the spring/summer, fire all year round, sewage backups and the like. Getting 40% of their revenues from insurance companies diversifies their revenue stream and makes the company somewhat recession proof.

They do basement finishing, bathroom remodels, kitchen remodels, to name just a few of the types of projects for interiors. For exteriors they do windows, doors, roofing, gutters, siding, woodworking, finishing work, painting, decks, and flatwork. The company as of 4 19 23 has 459K in contracted work and 1.4M in leads and outstanding bids. This is above the same time last year.

The owners spend 35 to 40 hours a week working for the business. He specializes in the exterior projects and she the interior projects, but each is capable of doing the others job. Along with the two owners there is a staff of five full time employees and one part-time employee which makes eight for the entire team. The full-time staff consists of a salesperson who gets a 70K salary and 15% of the gross profit. The other employees are a production manager, two project managers, and an office manager. There is also a part-time office assistant who works approximately 25 hours/week. The owners are a husband and wife team. Neither does any of the actual work themselves.

The business owns two vehicles that are used for the business by the owners. They also have office equipment and supplies and some small equipment. The total of this is estimated to be over 40K. This is partially because their “subs” carry their own insurance and use their own equipment.

The Sales Price is currently only 465K with the Seller willing to carry up to 20% of it for a qualified buyer. This is only 1.8 times the earnings and this business will qualify for an SBA loan for a qualified buyer. This means that if the buyer carries 20%, that leaves 372K which a bank will provide, with the buyer matching 10% of the 372K. Working Capital is estimated to be less than 75K which means the 10% down payment of 37,200 plus 75K in working capital is less than 115K which is all that it will take to buy this business. The sales price includes all assets.

Growth Potential: The company only uses 2% of their revenues for advertising which is very low and should be increased. The sellers believe that there are many ways to grow this company including doing not just restoration but also large loss catastrophe work which often has higher profit margins. Another way is to develop more relationships with key referral partners such as insurance agents and/or Realtors. They also can add search engine optimization to their website. Add a website for just insurance work. They currently get referrals from 2 insurance agents, and they could prospect real estate agents for more referrals. They also have little social media marketing.

No construction experience is necessary but would be extremely helpful. The class “C” GC license is carried by the other original founding partner who is no longer vested or has any controlling interest in the company (He was bought out in 2018). This other individual is willing to allow the use of his construction license which is mostly for permitting and licensure and with certain parameters being met the new owner can use his license for 2 or 3 years post-closing with compensation and insurance. They will both offer a full transition including training up to 60 days. He is willing to stay on for up to 6 months post-closing to assist with the transition/sales and to help hire a replacement for his wife’s work with an agreed amount of compensation.

A buyer will get a business that has work in progress, contracted work, and work being in various stages of bidding and approval. In other words, this business will not change the day of the closing, with work being done consistently through the closing date.

Location: East Denver Metro Area

Other Information:

They have had a great reputation with top notch customer service as proven by their 4.7 Star Google Rating including a negative review from a person, they have never done work for. They also have a stellar worker’s safety history without anything but small claims and enjoy a low workman’s comp rate due to their safety record. The sellers will agree to full Reps and Warrantees to a solid legal and business standing. This is an "LLC" which means that it will most likely be an asset sale and has been priced that way.

The company is in a 1,000 square foot 2nd floor office with a lease that expires at the end of September 2023. The lease is only 1,200.00 dollars per month but there is no room for additional employees in their current space. This will give the new owner the opportunity to move the business into a larger space. It can be located anywhere on the East side of Denver. The property is not owned by the company or its owners.

Colorado is the 2nd sunniest state making this one of the best places to own a business like this. Plus, Colorado is one of the fastest growing and strongest recession proof economies in the United States.

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 only uses 2% of their revenues for advertising which is very low and should be increased. The sellers believe that there are many ways to grow this company including doing not just restoration but also large loss catastrophe work which often has higher profit margins. Another way is to develop more relationships with key referral partners such as insurance agents and/or Realtors. They also can add search engine optimization to their website. Add a website for just insurance work. They currently get referrals from 2 insurance agents, and they could prospect real estate agents for more referrals. They also have little social media marketing.

Market Competition:

The company has had steady growth and expects that to continue with several ways for the new owner to increase the growth rate. They do 40% restoration and 60% remodeling work and interior and exterior work all through non-employee workers who are part of independent crews often referred to as “subs”. The 40% restoration is driven by insurance agents they’ve developed relationships with as well as some insurance claims that come from their print advertising. They are not part of any TPA’s (Third Party Administrators) The insurance restoration work is year-round with frozen pipes in the winter, hail in the spring/summer, fire all year round, sewage backups and the like. Getting 40% of their revenues from insurance companies diversifies their revenue stream and makes the company somewhat recession proof.

Location Details:

The company is in a 1,000 square foot 2nd floor office with a lease that expires at the end of September 2023. The lease is only 1,200.00 dollars per month but there is no room for additional employees in their current space. This will give the new owner the opportunity to move the business into a larger space. It can be located anywhere on the East side of Denver. The property is not owned by the company or its owners.

Support & Training

Will stay as long as needed

Reason for Selling:

Personal Reasons