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Specialized HOA Landscaping Business in Silicon Valley

$690,663 Revenue with $198,180 SDE

Specifications

 Price:
$550,000
Revenue:
$690,663 (3 Year Avg.)
Cash Flow:
$198,180 (3 Year Avg.)
Location:
Santa Clara County, CA
Service Area:
San Francisco Bay Area
 Profit Margin:
29% (3 Year Avg.)
 Employees:
6 Full Time Employees
Reason for Sale:
The Sellers are Retiring
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 is a total value of $73,608 worth of FF&E included in the sale, including 4 vehicles and 3 trailers and other small tools and equipment.

The business is pre-approved for SBA loan with 10% down payment for qualified buyers.

Value Proposition

  • 43 years of history and reputation
  • HOA commercial accounts only
  • Long-term customers
  • No customer concentration
  • 60%-70% recurring revenue from HOA maintenance
  • 30-40% revenue from add-on works for HOAs
  • “Opportunity to add more HOA & residential clients

Revenue Breakdown

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sunbeltbayarea

Financial Highlights

  • Listing Price $550,000
  • Pre-approved for SBA loan with 10% down payment
  • Consistent Revenue Averaged $690K with SDE $198K
  • Stable Profit (SDE) averaged 29%
  • Accounts billed on net 30-day term
  • COVID and recession resistant
  • Operated from Home with Many Addback Items

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 with a multiple of 2.77x. The resulting value is $550,000.

sunbeltbayarea

Funding Example

Purchase Price: $550,000

10% Buyer Down Payment

$55,000

Buyer’s Equity

90% Bank Loan

$495,000

10-Yearterm at a rate of 6.0% = Monthly loan payment of $5,494

  • Cash Flow (3-Year Average SDE): $198,180
  • Annual Payment to Bank: $65,946
  • Buyer’s Cost of Living: $50,000
  • Net Profit (After Expenses and loan payment): $82,233
sunbeltbayarea
sunbeltbayarea

* 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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