Specialized HOA Landscaping Business: $735,000 Sales; $237,000 SDE
Commercial Accounts Only with 42 Years of History.
Specifications
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Price: $550,000 |
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Revenue: $735,769 (3 Year Avg.) |
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Cash Flow: $237,463 (3 Year Avg.) |
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Location: Santa Clara County, CA |
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Service Area: San Francisco Bay Area |
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Profit Margin: 32% (3 Year Avg.) |
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Employees: 6 Full Time Employees |
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Reason for Sale: The Sellers are Retiring |
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Goodwill: 38 Yr Reputation 42 Year Reputation |
| Year Established: | 1979 |
| Services: | 42 years of landscape design, installation and maintenance service provider with focus on multi-family HOA properties across the San Francisco Bay Area. |
| Clients: | 100% HOA Properties |
| Lease: | Home Based (new owner may need to lease a storage space for equipment) |
| Personnel: | 6 FT employees, 1 FT owner and 1 PT owner (admin) |
This business acquisition opportunity is for a 40+ year old landscaping company with a stable and pandemic-proof book of HOA clients. 70% of the revenue is generated from recurring maintenance work and 30% from design and installation services. All accounts are currently commercial-only; no residential clients. Maintenance service is conducted for each client account on a weekly basis, four times a month. Design and installation services are provided to clients on as-needed basis.
Both of the current owners work in the company with one providing the design services and management to the service team and the other managing administrative duties and bookkeeping.
This business is run from the owners’ home. There are 4 vehicles and 3 trailers included in the sale, and in addition, another $23,000 worth of tools and equipment are included within the asking price.
Value Proposition
- 42 years of history and reputation
- HOA commercial accounts only
- Long-term customers
- No customer concentration
- 70% recurring revenue from HOA maintenance
- Highly reputable
- “Opportunity to add more HOA & residential clients
Revenue Breakdown
Financial Highlights
- Listing Price $550,000
- Full return of 20% down payment in 8 months
- Stable Cash Flow (SDE) ranging 30-34% of Revenue
- 6/30/2021 Revenue and SDE in line with historical historical
- Accounts billed on net 30-day term
- COVID and recession resistant
Cashflow Analysis
Asking Price
The asking price is determined using a cash flow methodology. Cash flow is the sum of net income from the business plus any non-cash expenses, non-recurring items and any seller’s personal expenses. A multi-factor multiplier is applied to the cash flow based on the condition of the business.
For this business, a three-year average cash flow is applied making the business price more favorable to the buyer. The multiplier applied in this case is 2.32x, below the market in favor of the buyer.
Funding Example
Purchase Price: $550,000
20% Buyer Down Payment
$110,000
Buyer’s Equity
80% Bank Loan
$440,000
10-Yearterm at a rate of 5.50% = Monthly loan payment of $4,775
- Cash Flow (3-Year Average SDE): $237,463
- Annual Payment to Bank: $57,302
- Net Profit (After Expenses and loan payment): $180,161
* Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.
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