North of Denver Mostly Commercial Electrical Contractor, 32 Percent Profit Margin, Well Established

Financial & Assets Details

About the Business

Business Description

13-Year-Old Electrical Contractor comprised of 65% Commercial, 10% Residential, and 25% Service

Updates: This includes the 1st Quarter update for 2023 which had higher revenues and earnings than in 2022 and has brought down the multiple to 2.17 from 2.35 times the earnings. In my experience, this business should get under contract soon with their steady growth and low multiple.

New option to get financing potentially avoiding the bank: They have a 500K Government EIDL loan which is managed by the SBA with a 3 3/4% interest rate over a 30-year term with the first payment due in December 2023. This loan can be transferred to a buyer who fills out the application to transfer this to the buyer potentially sparing them from a more expensive source of a partial down payment. The estimated balance July 1st should be around 538K. You can’t combine this with a business SBA loan since you can only have one or the other. They are asking 945K and will carry 10% leaving 850.5K minus 538K leaves 312.5K which can come from cash, a Robb, friends, family, investor(s), etc but not the SBA. If this is feasible, it should shorten your time to close and save you money. We can discuss. If you don’t use this, they will pay it off at the closing.

The trailing 12 months earnings to March 31st were 435K from 1.34M in revenues which is a 32% profit margin. The 2022 earnings were 402K from 1.28M in revenue which is a 31% profit margin. A great reputation in combination with a long-standing and recurring customer base will undoubtedly continue to provide the revenue necessary to thrive.

The company provides a full range of electrical services from a new big box commercial electrical installs to installing electric vehicle home chargers. They work on new construction, remodels, & tenant finishes of all types and sizes. They have a high percentage of recurring work because they are a preferred electrical company for (Disclosed after NDA above) which contracts directly with electric vehicle companies and dealers. These types of home installs often result in the residents calling them for their future electrical needs. They also have relationships with other companies for referrals. Many of their customers become repeat clients and they continue to add to their customer base.

Growth Opportunities: They are getting a reputation locally for electric vehicle charging experts and are starting to get an increasing amount of work for both residential installs but also install for commercial building and parking lots that want to add chargers.

Electricians are in high demand in North of Denver based on the quantity and size of the many commercial and residential developments that will be taking place for the next 25 years. They have started doing more service work based on the high profit margins ,increased cash flow, and greater exposure to more customers. Northern Colorado lacks an electrical contractor that really stands out as a service contractor. There is potential to utilize this space. The new owner can expand this dramatically based on both the current and anticipated future demand. They also bid and got their first big commercial job in 2022 and it went very well. They have 4 large, signed contracts for 2023 totaling over 480K dollars and at least one other large bid that is outstanding as of mid-May. They’ve been working with an estimator for most of 2022 and will continue to use him moving forward. He provides a fast turnaround with extremely accurate take offs that can be customized to the job’s specific needs. This helps to eliminate the biggest risk inexperienced buyers face when buying these types of businesses.

They have a great reputation based on their 4.8 star Google rating. They have hired a local marketing professional which includes 2,200 dollars per month in search engine optimization, Facebook updates/postings, website management, and are considering paying for the new Google guaranteed pay per click program which is a trust-based referral website like Angi’s where they do a background check on all companies that are allowed to participate.

The owners: He is a master electrician and spends most of his time in the office, but also does both field work including estimating new jobs consisting of smaller residential remodels, basement finishes, etc. The larger jobs are sent to the estimator. He works approximately 30 hours a week with 12 of those in the field. He uses an industry standard estimating job/customer tracking program, SimPro software, which was created by electricians, and have automated many of their bids, material purchases, and work performed for common installs and services. Simpro is used to track all job costing & profit, invoicing, job history, etc. It can also be used for inventory. All of the techs use the Simpro mobile app for time tracking, materials & job notes. This can be taught to the new owner relatively quickly by the owner or by one of their training videos. The company has 9 employees including 6 electricians.

The master electrician will lease his license for 2 to 3 years to the new if he/she needs it upon the ability to comply with Colorado regulations. The owners believe all employees are happily employed and will remain with the company after the sale. The employees are all very loyal and hardworking individuals who get along and will continue to be assets for the new owner. A few of them have learned their craft working alongside the owner - meaning they are highly skilled, fast paced and are capable of multitasking a variety of electrical jobs.

The buyer will get approximately 160K in current value assets made up of 3 vans, 2 pickup trucks, 1 trailer, 1 trencher, 1 scissor lift, small equipment, and tools. They also have approximately 30K in inventory.

Location: North front range Colorado using a virtual office that has access to a conference room they use for employee meetings, rare customer meetings, and the commercial location helps with their domain name Google positioning. The owners work out of their house with a small storage area for staging jobs from.

The sales price is 945K plus inventory which is estimated to be 30K. This is only 2.17 times the earnings. The seller will be keeping their cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free. This is an LLC so this will most likely be an asset sale. This will qualify for an SBA loan for a qualified buyer with an anticipated down payment of 85K for the bank and proof of some working capital.

Brief Overview and Deal Points:

They specialize in high end electrical contracting of all types. The company has grown historically based on their reputation through a steady long term increase in referrals along with steady reputation building in their market. They have a normal internet presence with some SEO and a website but advertising expenses are low. They have built relationships with developers, builders, contractors, business owners, and homeowners and are continuing to work current relationships and build new ones.

The owners are proud of the success and reputation, but they have decided to sell for quality-of-life reasons which may or may not turn into a move in 2024 closer to family and/or to follow other passions. They will help the new owner transition the business for as long as the new owner needs and is confident that it will be a smooth transition. The new owner will also have a team of loyal, trustworthy, competent, and reliable employees to help them learn and grow the business.

The broker is available at any time to discuss your interest in this offering.

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

They are getting a reputation locally for electric vehicle charging experts and are starting to get an increasing amount of work for both residential installs but also install for commercial building and parking lots that want to add chargers.

Market Competition:

Electricians are in high demand in North of Denver based on the quantity and size of the many commercial and residential developments that will be taking place for the next 25 years. They have started doing more service work based on the high profit margins,increased cash flow, and greater exposure to more customers. Northern Colorado lacks an electrical contractor that really stands out as a service contractor. There is potential to utilize this space. The new owner can expand this dramatically based on both the current and anticipated future demand. They also bid and got their first big commercial job in 2022 and it went very well. They have 4 large, signed contracts for 2023 totaling over 480K dollars and at least one other large bid that is outstanding as of mid-May. They’ve been working with an estimator for most of 2022 and will continue to use him moving forward. He provides a fast turnaround with extremely accurate take offs that can be customized to the job’s specific needs. This helps to eliminate the biggest risk inexperienced buyers face when buying these types of businesses.

Location Details:

North of Denver Front Range which is a virtual office that has access to a conference room they use for employee meetings, rare customer meetings, and the commercial location helps with their domain name Google positioning. The owners work out of their house with a small storage area for staging jobs from.

Support & Training

Will stay as long as needed

Reason for Selling:

Wants to spend more time with family