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Electrical Contractor – $750,000 Sales, $325,000 Earnings (SDE)

40% Margin, Strong Year over Year Growth, 2 Crew plus Seller

Specifications

 Price:
$395,000
Revenue:
$613,890
Cash Flow:
$252,978
Location:
Santa Cruz County
2021 Revenue (Est.):
$750,000
 2021 Cash Flow (Est.):
$325,000
 Employees:
3 FTE (Includes Owner)
Reason for Sale:
The Sellers are Retiring
Goodwill:
Good Reputation
Year Established: 2014
Services: Electrical Contractor
Equipment: 2 Equipped Work Trucks, Various trade tools
Clients: 60% Commercial, 40% Residential
Lease: No lease, operates out of home
Personnel: 2 FT Technicians and Owner
License Required: California Contractor License Required, C-10 [Electrical] or Other

This 7-year old electrical contracting company provides 40% margin of earnings (SDE) to the owner. There is strong year over year sales growth and high demand for their services. Quality service and their strong reputation continues to drive increases in their business.

A buyer for this business should have appropriate state contractor licenses (C-10 or other).

The relocating owner will offer training and transitional support to facilitate buyer’s success in the 100% acquisition of this business. Terms to be mutually agreed to.

Value Proposition

  • Stable Year over Year Margins
  • 3 FTE (including Owner)
  • Strong Revenue Growth
  • Desirable Location – Santa Cruz County

Revenue Breakdown

Financial Highlights

  • Listing Price: $395,000
  • $325,000 Projected 2021 Earnings (SDE)
  • 2021 Projected Revenue $750,000
  • $487,671 Revenue for 2021 (YTD thru July 28)
  • $252,978 SDE 2020 Earnings
  • More than 40% Margin to Seller Earnings
  • Strong Year over Year Growth

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 four-year average cash flow is applied making the business price more favorable to the buyer. The multiplier applied in this case is 2.49x, below the market in favor of the buyer.

Funding Example

Purchase Price: $395,000

20% Buyer Down Payment

$79,000

Buyer’s Equity

80% Bank Loan

$316,000

10-Yearterm at a rate of 5.50% = Monthly loan payment of $3,430

  • Cash Flow (SDE in 2020): $252,978
  • Annual Payment to Bank: $41,160
  • Net (After Expenses and loan payment): $211,818

* 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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