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Ski, Snowboard, and Bike Rental/Retail Shop w/ a 42% Margin ⛷️
Under the Radar Weekly Deals
The #1 Boring Biz Newsletter
👋 Hey folks,
Welcome to issue #13 of Under the Radar! 🇺🇸
As we honor Memorial Day, let's take a moment to remember and appreciate those who have served.
Now, let’s get right into it!
This week’s issue features:
🪵 Lumber & building materials store w/ $4.5M revenue
⛷️ Ski, snowboard, and bike rental/retail shop w/ a 42% margin
💩 Septic pump & tank instillation biz w/ $560K cash flow
Hot Deals 🔥
Analyses of the best deals we found across top marketplaces and brokerages.
#1. Lumber & building materials store w/ $4.5M revenue
🏷️ Asking Price: $1,050,000
📍 Location: La Crosse County, WI
Overview: This well-established lumber and building materials retail store has been serving its community for over 13 years. It caters to a diverse customer base, with 65% of sales to contractors, 25% to homeowners, and 10% to DIY enthusiasts. The store offers a wide range of products, including lumber, decking, cabinetry, windows, doors, millwork, roofing, and tools available for both sale and rent. Additionally, they provide professional design and drafting services. The business operates from a 3,360 sq. ft. showroom and office and an 11,928 sq. ft. warehouse built in 2016. The current owner is willing to stay on during the transition to ensure a smooth handover.
Key Highlights ✅
~$4.5M annual revenue
~$421K annual cash flow
$320K FF&E included
$300K inventory (not included)
9 FTEs (including store manager)
$1.45M real estate (4 acres, not included)
Growth Avenues 🚀
Boost marketing and outreach to attract more DIY customers, leveraging social media and community workshops
Establish an online store to reach a broader audience and facilitate convenient purchasing options
Potential Risks 🚩
The business is susceptible to changes in the construction industry, which can impact sales and revenue
Reliance on a set number of key vendors could pose risks if relationships change or supply issues arise
Questions❓
What specific strategies are currently in place to mitigate the impact of market fluctuations on revenue?
How strong and reliable are the existing vendor relationships, and are there contingency plans for potential disruptions?
What has been the owner's day-to-day involvement in the business, and how will their departure impact operations?
#2. Ski, snowboard, and bike rental/retail shop w/ a 42% margin
🏷️ Asking Price: $2,100,000
📍 Location: Frisco, CO
Overview: This business has been a staple in the community for over 15 years, offering high-quality snowboard, ski, and bike rental and repair services. Known for its excellent customer care and diverse selection of outdoor gear, the business attracts both locals and tourists. It operates from a 6,270 sq. ft. leased space with an additional 720 sq. ft. heated storage. The company’s inventory includes high-quality equipment and a wide range of outdoor gear to meet the needs of winter sports enthusiasts and summer adventurers.
With 12 employees during peak seasons (15 in winter and 7 in summer), the business is well-staffed to handle varying customer demands throughout the year. The company maintains excellent customer satisfaction ratings, with a 4.6-star rating on Google and Facebook. The retiring owner will provide training and support for a smooth transition.
Key Highlights ✅
~$2.07M annual revenue
~$871K annual cash flow
42% profit margin
$500K of assets included
$5K/month NNN lease
$350K inventory (not included)
Growth Avenues 🚀
Introduce new sporting goods such as electric bikes, fishing equipment, and camping gear to diversify offerings
Enhance marketing and services to attract more business during the summer months, potentially including guided tours and events
Potential Risks 🚩
Revenue is heavily influenced by seasonal demand for winter and summer sports, requiring careful management of cash flow and inventory
The current lease expires in 2027 with no auto-extensions, requiring negotiation for stability and potential expansion
Questions❓
What strategies are in place to mitigate the impact of seasonal fluctuations on revenue, and how effective have they been historically?
How strong are the relationships with suppliers, and are there any long-term agreements in place to ensure consistent supply?
How will the lease negotiations be handled to ensure stability for the new owner, and what are the prospects for securing a larger or more advantageous space?
#3. Septic pump & tank instillation biz w/ $560K cash flow
🏷️ Asking Price: $1,960,540
📍 Location: Texas
Overview: This well-established septic pump and tank installation company has been operating successfully with a home-based office setup. The business handles both residential and commercial installations and boasts a fleet of pump trucks and necessary equipment. The current owner, who is selling due to other business interests, is willing to assist in acquiring necessary permits and provide training for a smooth transition.
Key Highlights ✅
~$1.32M annual revenue
~$560K annual cash flow
4 FTEs
$408K of FF&E included
$6K inventory included
Growth Avenues 🚀
Extend services to neighboring regions and counties to tap into new markets and increase revenue. This can be achieved by setting up satellite offices or partnering with local contractors.
Actively pursue long-term contracts with local municipalities, large commercial clients, and property management companies. This will provide steady and predictable income streams and reduce reliance on one-time residential jobs.
Potential Risks 🚩
The business could be impacted by changes in environmental regulations and septic system standards. Staying informed and compliant with regulations will require continuous monitoring and potential adjustments in operations.
Questions❓
What specific knowledge and skills does the current owner contribute, and how will these be transferred to ensure a smooth transition?
Is there a dedicated facility for storing trucks and inventory, and what are the conditions and terms of this space?
What are the specific roles and responsibilities of the full-time employees, and how critical are they to daily operations?
Radar Picks 📡
Bit-sized reads featuring insights and fresh perspectives
Tweet of the Week 🐦
This week's Tweet of the Week comes from Chris Williams, an individual who became an entrepreneur through acquiring a company. Check out his post below for some valuable insights on SMB acquisitions 👇
When you buy small (<$2M EBITDA) there are risks. Key person, less $ to reinvest, etc
But there are also pros. Everything is changeable, fast. You can GSD and earn trust faster
So much is on your plate, if you want to work more, the biz will move ahead faster
Input = Output
I… x.com/i/web/status/1…
— Chris Williams (@CTW_SMB)
2:47 PM • May 19, 2024
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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.