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Commercial Insulation Co. w/ $621K Annual Cash Flow ๐ŸŒก๏ธ

Under the Radar Weekly Deals

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๐Ÿ‘‹ Hey folks,

Welcome to issue #17 of Under the Radar!

Before we start, I want to highlight The SMB Center, an invaluable resource for SMB searchers and operators. Whether you're exploring business opportunities or looking to optimize your current operations, The SMB Center offers expert advice, networking opportunities, and the latest industry trends. Check them out to elevate your SMB journey!

Now, letโ€™s get right into it.

This weekโ€™s issue features:

  • ๐Ÿ—‘๏ธ Construction roll-off biz w/ $1.3M annual revenue

  • ๐ŸŒก๏ธ Commercial insulation co. w/ $621K annual cash flow

  • ๐Ÿ‘จ๐Ÿฝโ€๐Ÿ”ง Auto repair shop w/ $1.68M real estate included

Hot Deals ๐Ÿ”ฅ

Analyses of the best deals we found across top marketplaces and brokerages.

#1. Construction roll-off biz w/ $1.3M annual revenue

๐Ÿท๏ธ Asking Price: $1,900,000

๐Ÿ“ Location: Lee County, FL

Overview: Established in 2021, this construction roll-off business offers services such as lot clearing, demolition, concrete removal, construction site clean-ups, and remodeling clean-ups. The business is home-based and utilizes subcontractors for all work. The new owner can capitalize on a strong, referral-based client base, with services provided to home builders, developers, and general contractors.

Key Highlights โœ…

  • ~$1.3M annual revenue

  • ~$595K annual cash flow

  • $1.14M FF&E included

  • SBA pre-approved

  • 2 weeks of training included

Growth Avenues ๐Ÿš€

  • Introduce additional services such as recycling, specialized waste management, and hazardous material removal. Offering a broader range of services can attract a more diverse client base.

  • Secure multi-year contracts with large construction firms, real estate developers, and municipal projects. Long-term agreements can provide consistent revenue streams and reduce the impact of seasonal fluctuations.

Potential Risks ๐Ÿšฉ

  • Dependence on subcontractors can lead to issues with availability, quality control, and cost management. Building strong relationships with reliable subcontractors and having a backup plan is crucial.

  • Being a relatively new business (established in 2021), it lacks historical performance data which could impact financing options and buyer confidence.

Questionsโ“

  • Are there any existing long-term contracts or agreements with key clients? What is the renewal rate for these contracts?

  • What percentage of revenue comes from repeat customers versus new clients?

  • What specific equipment and vehicles are included in the sale? Can details on their condition and any maintenance history be provided?

#2. Commercial insulation co. w/ $621K annual cash flow

๐Ÿท๏ธ Asking Price: $1,495,000

๐Ÿ“ Location: Washington - Baltimore area 

Overview: Operating for 25 years, this commercial insulation business has built a strong reputation for exceptional service and high-quality metal fabrication and insulation work. The company has established operational procedures and a solid customer base with great relationships and a high number of repeat customers. The business operates out of a leased 4,800 square foot facility, which provides ample space for its operations. The seller is willing to provide training and support for a smooth transition.

Key Highlights โœ…

  • ~$3.03M annual revenue

  • ~$621K annual cash flow

  • ~$2.36M backlog

  • Avg. gross margin = 46.6%

  • 24 employees

Growth Avenues ๐Ÿš€

  • Implement advanced project management and scheduling software to streamline operations. This can improve efficiency, reduce costs, and enhance customer satisfaction by ensuring timely project completion.

  • Form strategic alliances with construction companies, architects, and engineering firms to become the preferred subcontractor for insulation and HVAC projects. This can lead to a steady stream of referral business.

Potential Risks ๐Ÿšฉ

  • Managing complex projects involving fabrication, insulation, and HVAC systems can be challenging. Ensuring robust operational processes and maintaining high standards of quality control is critical for success.

Questionsโ“

  • Are there any existing long-term contracts or agreements with key clients? What are the terms and conditions, and are they transferable to a new owner?

  • What specific equipment and vehicles are included in the sale, if any?

  • What are the roles of the 24 employees, and are they full-time, part-time, or subcontractors?

#3. Auto repair shop w/ $1.68M real estate included

๐Ÿท๏ธ Asking Price: $2,425,000

๐Ÿ“ Location: Lee County, FL

Overview: Established in 2003, this independent auto repair shop has been a staple in the community for over two decades. It has a loyal customer base and a welcoming family atmosphere for both employees and customers. The business operates from a well-maintained facility with three buildings on five parcels of land. The shop is strategically located near major roads and parts suppliers, ensuring efficient operations. The current owner is planning to retire but will stay in the area and assist the new owner during a 15-day transition period at no cost.

Key Highlights โœ…

  • ~$1.49M annual revenue

  • ~$405K annual SDE

  • $113K FF&E included

  • $30K inventory included

  • $1.68M real estate included

  • 6 employees

  • SBA pre-approved

Growth Avenues ๐Ÿš€

  • Implement a comprehensive marketing strategy, including digital marketing, social media campaigns, and local advertising. This can significantly increase visibility and attract new customers.

  • Develop customer loyalty programs and referral incentives to encourage repeat business and attract new clients through word-of-mouth.

Potential Risks ๐Ÿšฉ

  • Managing a high-traffic repair shop while maintaining quality control and customer satisfaction can be challenging. Ensuring a robust operational framework is key to success.

Questionsโ“

  • What percentage of the customer base is repeat business versus new clients? Are there any major clients or fleet accounts that represent a significant portion of revenue?

  • What are the most profitable services offered? Are there any underperforming services that could be improved or discontinued?

  • What are the specific roles and responsibilities of the six employees? Are they full-time, part-time, or subcontractors? Are any employees critical to the business's operations?

Radar Picks ๐Ÿ“ก

Bit-sized reads featuring insights and fresh perspectives

Tweet of the Week ๐Ÿฆ

This week's featured tweet comes from Brian Beers. He highlights some excellent "boring" businesses to buy and explains why these often-overlooked opportunities can be gold mines. Check it out for some inspiration๐Ÿ‘‡

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DISCLAIMER: This newsletter is for informational purposes only and should not be considered financial advice. It offers analyses of businesses without endorsing any specific financial actions. Readers are advised to do their own research and consult a professional before making investment decisions.