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Exterior Remodeling Biz w/ $1.3M Annual SDE ๐Ÿ”จ

Under the Radar Weekly Deals

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๐Ÿ‘‹ Hey fellow searchers,

Hope you had a great weekend and welcome back to Under the Radar!

Letโ€™s get right into it.

This weekโ€™s issue features:

  •  ๐Ÿ› Playground equipment co. w/ $2.6M annual revenue

  •  ๐Ÿ”จ Exterior remodeling biz w/ $1.3M annual SDE

  • ๐Ÿ‘” Dry cleaning co. w/ $513K annual SDE

Hot Deals ๐Ÿ”ฅ

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

#1. Playground equipment co. w/ $2.6M annual revenue

๐Ÿท๏ธ Asking Price: $1.20M

๐Ÿ“Location: Pinellas County, FL

Overview: This commercial playground equipment and safety flooring business has been serving parks, HOAs, churches, and nationwide fast-food chains across Florida for 30 years. Generating ~$2.58M in annual revenue and ~$485K in SDE (2.5x), the company specializes in selling and installing playground structures, AstroTurf safety flooring, and site amenities for public spaces. The business operates from a 2,000 sqft. warehouse with a month-to-month lease, employs a team of 21, and has secured SBA pre-approval, allowing a qualified buyer to acquire it with as little as 10% down.

What I Like ๐Ÿ‘

  • Established Market Presence โ€“ With 30 years in business, the company has built a strong reputation, repeat clientele, and a trusted network of suppliers and contractors.

  • Diverse Revenue Streams โ€“ Customers range from municipalities and HOAs to corporate clients like fast-food chains, reducing reliance on any single market segment.

  • SBA Pre-Approved โ€“ Multiple financing options are available, with a qualified buyer able to leverage SBA funding to minimize upfront capital requirements.

  • Recurring Demand & Long Sales Lifecycle โ€“ Playgrounds and safety flooring require maintenance, upgrades, and replacements over time, ensuring steady long-term demand.

  • Scalability Potential โ€“ The company currently services all of Florida, but expansion into neighboring states could provide additional growth opportunities.

What to Look Out For ๐Ÿ‘€

  • Project-Based Revenue โ€“ Sales cycles may be inconsistent depending on contract timing, municipal funding, and corporate budgeting.

  • No Seller Financing โ€“ Buyers must secure outside funding, though SBA financing is an option.

  • Leased Warehouse on Month-to-Month Terms โ€“ No long-term lease commitment could provide flexibility but also introduces uncertainty if the landlord changes terms or if relocation is required.

  • Competitive Bidding Environment โ€“ Public sector and corporate contracts often involve a bidding process that could impact pricing and margins.

  • Seasonality & Economic Sensitivity โ€“ Budget constraints in certain economic conditions could impact discretionary spending on playground installations.

Key Questionsโ“

  • How strong are the relationships with key customers like municipalities, HOAs, and national chains?

  • What are the terms of supplier agreements, and is there any dependency on a single manufacturer for playground equipment?

  • What warranties, service agreements, or maintenance contracts are tied to past installations?

#2. Exterior remodeling biz w/ $1.3M annual SDE

๐Ÿท๏ธ Asking Price: $3.20M

๐Ÿ“Location: Salt Lake City, UT

Overview: This profitable exterior remodeling business specializes in siding, roofing, and decking, generating ~$5.98M in annual revenue and ~$1.27M in SDE (2.5x). Established in 2019, it has quickly gained a dominant market position in Salt Lake City, with revenue growing 92% between 2022 and 2023, followed by another 32% increase in 2024. The business operates with a team of 20 employees, including three in-house installation crews, and holds an exclusive partnership with a leading siding distributor. With minimal reliance on subcontractors, strong customer satisfaction, and a 4.7-star Google rating, this business is well-positioned for further expansion.

What I Like ๐Ÿ‘

  • Rapid Growth & Strong Margins โ€“ Revenue has nearly doubled over the past two years, and the focus on residential remodels allows for higher profit margins than new construction.

  • Exclusive Supplier Partnership โ€“ The companyโ€™s unique agreement with a major siding distributor provides a competitive advantage in pricing and availability.

  • In-House Installation Crews โ€“ Reduces dependency on subcontractors, ensuring better quality control and operational efficiency.

  • Strong Market Demand โ€“ The Salt Lake City area is experiencing significant housing and remodeling growth, driving continued demand for exterior upgrades.

  • Turnkey Operation โ€“ Comes with essential equipment, inventory, and established vendor relationships, allowing for a smooth transition.

What to Look Out For ๐Ÿ‘€

  •  Recent Growth Rate โ€“ The business has expanded quickly; a buyer should assess whether growth is sustainable or if recent revenue spikes were due to short-term market conditions.

  • Customer Financing Risks โ€“ The company offers in-house financing options, which can be a growth driver but also introduces potential cash flow risks if customers default.

  • Reliance on Residential Market โ€“ While remodeling demand is strong, economic downturns could slow homeowner spending on non-essential upgrades.

  • Lease Terms Not Specified โ€“ The real estate situation should be reviewed to ensure long-term stability at the current location.

  • Owner Transition โ€“ Understanding the ownerโ€™s role and how responsibilities will be transferred is key, especially given the companyโ€™s rapid expansion.

Key Questionsโ“

  • What are the specific terms of the exclusive siding supplier partnership, and is it transferable to the new owner?

  • How is customer financing structured, and what percentage of sales depend on these arrangements?

  • What is the breakdown of revenue across services (siding, roofing, decking, etc.), and which areas show the most profitability?

#3. Dry cleaning co. w/ $513K annual SDE

๐Ÿท๏ธ Asking Price: $1.45M

๐Ÿ“Location: Chester County, PA

Overview: This organic dry cleaning business and drop store generates ~$1.03M in annual revenue and ~$514K in SDE (2.8x). The plant is fully equipped with state-of-the-art machines, including an IQ500 50lb hydrocarbon dry-cleaning system, a Fulton 20hp boiler, and multiple pressing stations, making it capable of handling high volumes. Located in a growing residential and commercial area with high-income neighborhoods, the business has built a strong reputation for quality and service. The facility has room to scale, and additional revenue streams such as delivery services and commercial accounts remain untapped.

What I Like ๐Ÿ‘

  • Modern Equipment & Scalable Capacity โ€“ The plant is fully outfitted with high-end machinery and can handle increased volume without major upgrades.

  • Established Reputation โ€“ The business is the go-to dry cleaner for local residents due to its quality and reliability.

  • Drop Store for Additional Income โ€“ Provides a secondary revenue stream without additional overhead.

  • High-Margin Industry โ€“ Dry cleaning services typically yield strong margins, and organic solvent use can be a competitive advantage.

  • Growth Potential โ€“ No advertising or delivery services currently in place, leaving clear paths to expansion.

What to Look Out For ๐Ÿ‘€

  • Customer Concentration โ€“ If a significant portion of revenue comes from a small group of high-value customers, losing them could have a major impact.

  • Competition & Market Saturation โ€“ Other organic dry cleaners in the area could limit pricing flexibility and customer acquisition.

  • Equipment Maintenance Costs โ€“ High-end dry-cleaning machines require ongoing upkeep, and unexpected repairs could be costly.

  • Employee Dependence โ€“ If the business relies on key employees for daily operations, turnover could disrupt efficiency and service quality.

  • Lease Terms & Real Estate Considerations โ€“ If the business is leasing, unfavorable terms or rising rent costs could affect long-term profitability.

Key Questionsโ“

  • Are there any pending equipment repairs or necessary upgrades in the near future?

  • What percentage of revenue comes from the drop store versus the main plant?

  • How much would it cost to implement a delivery service, and what demand exists for it?

Other Hot Deals ๐Ÿ”ฅ

Radar Picks ๐Ÿ“ก

Bit-sized reads featuring insights and fresh perspectives

Tweet of the Week ๐Ÿฆ

Pricing a business for sale is more art than science, and this weekโ€™s featured tweet from Clint Fiore dives into the tricky balance between setting an asking price that attracts buyers without leaving money on the table. He also introduces an alternative approachโ€”ditching the traditional asking price altogether. If youโ€™ve ever questioned how a business should be priced to maximize both interest and value, this thread is worth a read. ๐Ÿ‘‡

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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.