by Jill Kerr | Oct 20, 2022 | Blog, Buying A Business, SBA - Small Business Administration
BY:
Nimi Natan
Division President & CEO
Gulf Coast Small Business Lending
As a small business lender, I get many questions regarding the state of economy. In the past few months, the overarching theme has been: “should I buy or start a business now and if so, how?” Our economy is facing a near unprecedented number of stress points including persistent inflation; recessionary pressures; high interest rates; supply-chain interruptions; and labor shortages. For the foreseeable future, we will likely experience declining sales and profits. Fortunes are made in times like these so it is absolutely a great time to invest. Good businesses are available to purchase at reasonable prices, vendors are more interested in extending terms and opening new accounts, and while more difficult to find, financing is available.
My suggestions, featured below, are relevant for strong and weak economic conditions; however, the challenges today require a level of precision that is not as critical in a growing economy.
First, buy a good business. It seems obvious, but keep in mind that now is not the time to attempt a turnaround. A good business has decent margins, diverse customer base, tenured staff, and no extraordinary working capital, and/or capital expenditure needs. An established franchised restaurant, for example.
Second, don’t overpay. Small businesses with good margins and growth rates are worth up to 4-5X cash flow, based on average cash flow for the past four to five years. Businesses with proprietary technology or unique and recognized brands are worth 6-8X, with more commodity-type businesses worth 3-4X. Enlist the help of an accounting professional to go over the financials and scrutinize add backs.
Thirdly, finance conservatively. A strong balance sheet is critical for surviving the next few quarters. Use more equity even if it means bringing in partners. Rely on conventional and/or SBA financing, and DO NOT use hard-money and MCA lenders. If the seller offers financing, insist on conventional terms and be prepared to have it subordinated to conventional lenders. If you find that you must use aggressive financing, it is a sign you are overpaying or swallowing more than you can chew and you should consider walking away.
Next, don’t forget working capital. We see it again and again. Buyers think that income and EBITDA or broker’s SDI equate to free cash flow. For most businesses, that’s not even close and you must incorporate the working capital and capital expenditure needs into your projections and financing. If you are not sure what all this means, ask an accounting professional to help you project cash flow.
Lastly, pursue operational excellence. This one also might seem obvious; however, you should only invest in a business you fully understand and in line with your experience. This is critical for assessing the opportunity as well as running the business. If you find a business you think you love but lack the experience, consider bringing in an operational partner.
In conclusion, I’ll use an analogy: you are about to board a ship headed into a storm of unknown magnitude. Be sure that the boat is sound and gassed and that the captain (you!) is experienced. Doing so will give you the best possible opportunity to achieve entrepreneurial success.
For more information about Gulf Coast Small Business Lending, please contact:
Jim Frey, SVP – Business Development Officer
Gulf Coast Small Business Lending
Office: (724) 259-3182
Mobile: (724) 600-4409
by Jill Kerr | Oct 19, 2022 | Acquisition, Business for Sale, Buying A Business, Featured Business For Sale, Richard Stopa
This 30 year-old leading provider of workplace solutions offers conflict management, organizational development and diversity, equity and inclusion consulting, coaching, and training to clients nationwide from their headquarters in Washington DC. Clients include major government agencies, global corporations and non-profit organizations who want to support the health and well-being of their employees and the effectiveness of their organization. The owner wishes to retire.
Key features of the business:
- Solid staff in place and a large network of contractors around the U.S.
- Diverse and highly experienced employees with extensive experience and training
- The Diversity, Equity and Inclusion industry, of which this business is a part, is expected to grow to $15.4 billion by 2026
- Seller who is willing to train and assist the buyer with a smooth transition
Asking Price: $1,200,000
| Financial Summary |
| |
2022* |
2021 |
2020 |
2019 |
| Revenue |
$ 1,314,982.00 |
$982,236 |
$989,164 |
$1,047,812 |
| Cost of Goods Sold |
$388,000 |
$417,472 |
$398,024 |
$566,775 |
| Gross Profit |
$926,982 |
$564,764 |
$591,140 |
$481,037 |
| Gross Profit Percentage |
70% |
57.5% |
59.8% |
45.9% |
| Seller’s Discretionary Earnings |
TBD |
$161,000 |
$163,297 |
$159,323 |
*projections from owner include revenue from two new 5-year government contracts
Please Contact: Richard Stopa (RStopa@harvestbusiness.com or 703-307-1187) to discuss this business in more detail.
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@harvestbusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
by Jill Kerr | Oct 5, 2022 | Business for Sale, Eddie Davis, Featured Business For Sale, Maryland, Uncategorized
COMPANY PROFILE
– In business for 28+ years
– Job sites in the DC metro and throughout Maryland
– Multiple revenue streams (structural construction, fabrication, welding)
– Key management team
– Established relationships with supplier and customers
– Multiple growth opportunities
– Average SDE (sellers discretionary earnings, 2018-2020) $615k
BENEFITS TO BUYER
– Consistent financial results
– Long-term staff
– Owners understand the need for a smooth transition and will support buyer as needed
– Turnkey business processes
– Value of hard assets $1.0mm
BUYER PROFILE
– An owner/operator looking to acquire an established, well know business
– A strategic buyer searching for growth / diversification opportunities
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com
by Jill Kerr | Sep 15, 2022 | Business for Sale, Featured Business For Sale, Maryland, Richard Stopa, Uncategorized
This well-established 10 year old healthcare company devises and implements cost-effective solutions to help healthcare systems, organizations and providers increase revenue and ensure the most successful medical operations possible. The business is located in Maryland and the owner wishes to retire.
Core competencies include:
- Managed Care Contracting
- Contract Review and Fee Negotiation
- Coding, Compliance & Education
- Risk Adjustment Reviews
- Coding support
- Compliance Reviews & education
- Healthcare Management Consulting
- Practice Assessments
- Due Diligence Reviews
Key features of the business:
- A $1.3 M sales pipeline
- Solid staff in place and a high number of repeat customers
- Proprietary software that can be developed into new profit center
- Growth industry in a fast-growing geographic region
- Seller who is willing to train and assist the buyer with a smooth transition
|
Financial Summary
|
|
|
2022 (Projected) |
2021 |
2020 |
2019 |
| Net Income |
$ 1,912,962 |
$ 1,633,438 |
$ 1,280,819 |
$ 911,326 |
| Net Profit (Loss) Before Taxes |
$ 464,000 |
$ 62,111 |
$ 92,094 |
$ (16,601) |
| ADJUSTED NET INCOME |
$ 544,160 |
$ 277,271 |
$ 269,585 |
$ (29,261) |
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@harvestbusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
by Jill Kerr | Apr 6, 2022 | Baltimore MD, Business for Sale, Eddie Davis, Featured Business For Sale, Maryland
A unique, 45+ year old company that specializes in the sale and installation of products designed for promotional purposes, advertising campaigns, sporting events and a variety of recreational activities. The company has developed a diverse, loyal customer base that includes government and commercial customers and sales to individuals and organizations. Customers are located in the Baltimore / DC metro. Buyer will benefit from experienced and processes developed by the operational and sales teams.
Company Profile:
- 45+ years, Baltimore MD based multi-generational family owned business
- Job sites from Baltimore to N VA Multiple revenue streams (installation and product sales)
- Key management team
- Established relationships with supplier and customers
- Multiple growth opportunities
- Average revenue $1.6m
- Average SDE (sellers discretionary earnings) $180K
Benefits to Buyer:
- Consistent financial results
- Long-term staff
- Owners understand the need for a smooth transition and will support buyer as needed
- Turnkey business processes
Buyer Profile:
- An owner/operator looking to acquire an established, successful business family business
- A strategic buyer searching for growth / diversification opportunities
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com
by Jill Kerr | Mar 22, 2022 | Baltimore MD, Business for Sale, Construction, Eddie Davis, Featured Business For Sale, Uncategorized
Company Profile: Deck and fence contractor, 15+ years, multiple revenue streams, key sales and management team, proven lead generation systems providing high quality leads, reliable/dependable construction crews. Customers ask for additional services. A great expansion opportunity for someone offering home repair work and looking for growth strategies. Real estate owned by seller, not included in sale.
Real Estate: Owned
Employees: 10
Furniture, Fixtures, & Equipment (FF&E): Included in asking price
Facilities: owned by seller, not included in sale
Growth & Expansion: customers ask for other home repair services; good opportunity for someone now providing home repair services
Support & Training: seller will provide reasonable transition period
Reason for Selling: retiring
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com
by Jill Kerr | Feb 28, 2022 | Business for Sale, Featured Business For Sale, Richard Stopa, Uncategorized, Virginia
For sale is a highly regarded 40 year-old commercial cleaning company in the booming Northern Virginia market. The business has highly satisfied customers, experienced and loyal employees, and tremendous growth potential.
All processes are in place for a new owner to come in and grow the business. This opportunity is especially-well suited for someone who wishes to expand their cleaning operation with a turn-key business.
The company provides the following services to churches and private schools:
- Regular ongoing contract cleaning including weekend work when requested
- General cleaning tasks: vacuuming, sweeping and mopping, dusting, glass, restrooms
- Floor maintenance: stripping/scrubbing and waxing, buffing
- Small carpet cleaning jobs for current clients
- Set-up services as requested
- Cleaning after special events (weddings, receptions, etc.)
Asking Price: $475,000
| Fiscal Year |
2021 |
2020 |
2019 |
2018 |
| Revenue Accrual Basis |
$900,345 |
$953,665 |
$1,074,126 |
$1,110,487 |
| Seller’s Discretionary Earnings (SDE) |
$162,265 |
$171,314 |
$190,760 |
$222,074 |
Ideally Suited for A Buyer Who:
- Has a business outside the area and is looking to expand to the DC market
- Has another location in the DC market and wishes to expand its presence
- Wishes to add on to an existing commercial services business
The buyer should have business experience. Cleaning service business experience is a plus.
Click here for a Non-Disclosure Agreement and Finance Document.
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@HarvestBusiness.com We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed.
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
by Jill Kerr | Dec 16, 2021 | Business for Sale, Featured Business For Sale, Uncategorized
Outstanding acquisition opportunity! This firmly established business is highly profitable and well-suited for growth and expansion. The company has designed and built custom cabinetry and delivered kitchen and bath remodels for nearly 30 years.
This reputable operation services homeowners, architects, builders, contractors and design professionals and provides free estimates, competitive pricing, top quality craftsmanship, stellar customer service and on time professional installation.
Key features of the business:
• Solid sales pipeline with order commitments totaling $1.6M through May of 2022
• 8,300 square foot office and warehouse space perfect for expansion
• Strong gross profit margin averaging 36 percent
• All business is from customer referrals; business could be grown with marketing investment
• Growth industry in a wealthy and fast-growing geographic region
• Seller who is willing to train and assist the buyer with a smooth transition
• Well suited for a contractor, woodcrafter or design professional
ASKING PRICE: $1 Million
________________________________________________________________________________________________________________
REVENUE
2021* — $1,928,428 *for 10 months ending 10/31/21
2020 — $1,694,425
2019 — $2,189,694
2018 — $1,862,539
ADJUSTED CASH FLOW
2021* — $443,057 *for 10 months ending 10/31/21
2020 — $190,753
2019 — $215,071
2018 — $197,480
________________________________________________________________________________________________________________
Ideally Suited for A Buyer Who:
• Has business experience and love woodworking and home improvements
• Has a kitchen/bath business outside the area and is looking to expand to the DC market
• Has another location in Northern Virginia and wishes to expand its presence
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@harvestbusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
by Jill Kerr | Jun 3, 2021 | Business for Sale, Featured Business For Sale, Richard Stopa, Uncategorized, Virginia
This company in Winchester, VA has been providing plumbing, piping and gas services to industrial, commercial and residential customers for over 25 years. They are known for their quality work, their reliability, and their outstanding customer service.
Investment Considerations for a Buyer
- The company has a solid customer base with almost all business coming from existing customers.
- The company possesses excellent relationships with general contractors.
- The owners are willing to stay on for a defined period of time as needed.
- This is a perfect opportunity for someone with plumbing experience to own their own business.
- Owners’ compensation for last five years averaged $165K
- Inventory, FFE and six vehicles are included in the asking price.
Asking Price: $449,000
|
Financial Metrics
|
2020 |
2019 |
2018 |
2017 |
2016 |
| Revenue |
$841,179 |
$661,739 |
$736,505 |
$623,587 |
$1,138,288 |
This acquisition is an extremely desirable opportunity for a general contractor or other mechanical contractor to add on to their business or for a piping/plumbing company in a nearby county wishing to expand their territory. Experience in construction, plumbing/piping or a related business is preferred.
Click here for a Non-Disclosure Agreement and Finance Document.
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to RStopa@HarvestBusiness.com We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed.
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
by Jill Kerr | Jun 1, 2021 | Business for Sale, Business Sold, Eddie Davis
This business has sold. Harvest Business Advisors congratulates the new owners and wishes the sellers much happiness in their future endeavors.
A highly regarded, comprehensive it solution provider and communications developer servicing select government agencies in a “niche” market. Fully operational since 2000. Long-term client relationship with the agencies they support.
Benefits of Acquisition:
- Experienced, long-term key management team with expertise in developing specialized enterprise software
- Trained staff who provide day-to-day “managed services” support
- Long-term federal contract
- Multiple trademarked IP software platforms
- Recurring annual revenue
- Average annual revenue $800,000
- Average historic annual SDE $365,000
Ideal Buyer:
- An industry buyer seeking growth / diversification opportunities
- An individual with an IT or general business/marketing background
Open with Adobe Reader, use their Fill and Sign Feature to complete and electronically sign the document, then return to EDavis@HarvestBusiness.com.
We will then be able to discuss financial details and other confidential information about the business with you.
Disclosure: We have relied on information provided and approved by seller and make no additional representations or warranties. Buyers should review with their advisors as needed
Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction. Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services.
We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.
