5/30/23 New Lower Price! Large Denver High End Used Car Dealership, Great Location, Very Profitable, Loyal Employees

Financial & Assets Details

About the Business

Business Description

Large, Very Profitable, High End Used Car Sales Dealership
Denver Metro, Great Website, High Volume, and Great Employees

The trailing 12 months to March 31st had revenues of 17.8M with 442K in earnings. The 2022 gross revenues were 17.6M and the earnings were 1M. The 2021 full-year revenues were 22.7M dollars with 1.14M in earnings but new cars were hard to find from late 2020 to late 2021 which created a short-term boom in used car dealers. In 2022, the industry returned to normal because used car prices returning to normal but rising rates and tightening credit started to have a negative impact in the last 9 months. The used car market fluctuates up and down and it is in a downturn again which should change once interest rates start coming down again and the current unease with the banks starts going away.

The Seller’s family is moving which is why he was selling. He can and will transition the Buyer post-closing. The combination of his family moving and the temporary slowdown in the used car market, he has agreed to lower the price from 2.7M to 1.45M plus he will now allow the buyer to pick how much inventory they want to buy. This is an enormous drop in the sales price. He is a motivated Seller.

Auto dealers usually sell for 3 ½ to 4 times the earnings plus inventory but we have priced this at only 3 times the earnings because the business is temporarily slowing. He does not completely trust the 2021 and 2020’s financials because he had to fire his old CPA in late 2021 and the new CPA found 182,702 of income in 2022 that belonged in 2021 which I have properly adjusted for in the “Adjusted Earnings Excel Spreadsheet”.

The inventory is extra and is currently estimated to be 2.1M which is cost plus the expense to prepare for sale. The actual amount of inventory will fluctuate daily as inventory is sold and new inventory arrives and will be adjusted at the closing properly. He will let the buyer ask him to reduce that further to bring down the sales price if the buyer requests this.

Inventory should be thought of as more valuable than cash for the following reasons: The more and the more variety of cars that the business has in stock, the more cars you will sell and sell right after the closing. You will own the cars on the closing day at their cost and the Seller will have already paid the cost to acquire them. In addition, this allows you to finance the purchase of the inventory through a bank loan as part of the total purchase price. When you sell a car, you will recover the cost of the car PLUS a profit, which is the dealer's standard markup plus or minus negotiations and upsales. This will also reduce or eliminate the need for working capital as you will turn inventory into cash every day.

The business always grows over the long term based on their very high traffic location, quality inventory, experienced salespeople, repeat customers, referrals, and services they provide including accepting trade ins and offering financing choices. Although the owner has been involved in the business since its inception, he is not "the face of the business".

The buyer will also get 100K dollars in current value of equipment, tools, furniture, computers, surveillance system, phone system, etc.
This company has a very high Google Star Rating. They are also a member of the "Colorado Automotive Dealers Association". They have a great interactive website with all of their inventory posted on the website. This company has an excellent reputation in the industry. 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.

A bank will only require 10% to 15% down payment from a qualified buyer, depending on the buyers’ experience. This business should qualify for an SBA loan.

Details:

There is the proper number of employees plus the owner. 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 as needed. But the buyer must have the drive and aptitude or experience to run a busy retail business. He/she should have a strong sales mindset.

The business 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.

Awesome location: The property is in a great location with a very high traffic count location which all day and all weekend, not just commuter traffic. The property has been leased since 2005. It is set on 38000 sq ft plus the additional corner lot I rent that I think is 10,000 sf. The business is operating on 3 different properties. It has a 4,900 square feet of building space including a 600 square foot main building that is very functional for the business operations, a 1000 square foot maintenance building with 6 bays, and a 500 sq ft showroom. There is a total of 9 offices, a break room, and 6 bays for service/cleaning of new inventory. Security cameras are in place and there is plenty of parking. There is 5 year left on the lease and the landlord has expressed a desire for the business to continue as a tenant.

Growth and Expansion: A new owner, with the energy and experience to promote the business, will have many opportunities to grow this already solidly established business.

Thank you for your consideration,

Jeff C Eisnaugle
Business Broker Colorado, LLC

Growth & Expansion

A new owner, with the energy and experience to promote the business, will have many opportunities to grow this already solidly established business.

Market Competition:

The business continues to grow based on their very high traffic location, quality inventory, experienced salespeople, repeat customers, referrals, and services they provide including accepting trade ins and offering financing choices. Although the owner has been involved in the business since its inception, he is not "the face of the business".

Location Details:

Awesome location: The property is in a great location with a very high traffic count location which all day and all weekend, not just commuter traffic. The property has been leased since 2005. It is set on 38000 sq ft plus the additional corner lot I rent that I think is 10,000 sf. The business is operating on 3 different properties. It has a 4,900 square feet of building space including a 600 square foot main building that is very functional for the business operations, a 1000 square foot maintenance building with 6 bays, and a 500 sq ft showroom. There is a total of 9 offices, a break room, and 6 bays for service/cleaning of new inventory. Security cameras are in place and there is plenty of parking. There is 5 year left on the lease and the landlord has expressed a desire for the business to continue as a tenant.

Support & Training

Will support as long as needed

Reason for Selling:

Has moved out of state