Low Competition General Auto Service with Specialty.
8 Lifts. Gated Lot. Inventory included. SBA Lender Pre-Approved.
Specifications
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Price: $375,000 |
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Revenue: $1,112,991 |
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2022 Adj. Cash Flow: $202,840 |
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Location: Santa Clara County |
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Service Area: South Bay Area |
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Adjusted Profit Margin: 18.22% |
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Employees: 2 FT Techs, 1 FT Writer Seller is 3rd tech |
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Reason for Sale: The Seller is Retiring |
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Goodwill: 36 Yr. Reputation, 4.7 Star Google reviews |
| Year Established: | 1987 |
| Services: | Auto & Truck general Repair – Including foreign and domestic brands. No Tire Sales. Specializes in Transmission rebuilds. |
| Furniture, Fixtures & Equipment: |
8 lifts (2 Heavy Duty), Overhead oil pump system, new AC machine, separate transmission build area with press and parts cleaner, full office and reception area, gated parking lot. |
| Services: | 70% transmission (of that 90% rebuild and 10% box) 30% comprises of breaks, electrical and AC |
| Clients: | 90% Retail; 10% Fleet. Repairs per week, 20-25 |
| Facility & Lease: | 5000 sq. ft. Shop, seller owns building, pays himself fair market rent at $1.63psf, will write favorable terms for qualified buyer |
| Personnel: | 2 FT Technicians, 1 FT Owner/transmission builder and 1 FT Service writer |
| Software Used: | All-Data, web site can be added |
| SBA Approval: | SBA Lender has approved this business for a *qualified buyer |
For sale now is a very well established, highly trusted, and exceptionally rated transmission and general auto repair shop. This well-established shop has been a beloved member of the South Bay Area community for over 36 years, known for their exceptional work and trusted service. Customers repeatedly choose this shop and confidently refer their loved ones due to their proven track record of quality and reliability.
The current owner is happy to provide thorough training to the buyer, ensuring a smooth transition and continued success for the business. The seller will also provide specialized training in the specifics of transmission re-builds and troubleshooting.
The decline in the number of auto repair shops specializing in transmission rebuilds has led to reduced competition. As more shops transition to using pre-assembled units, clients seeking rebuild services now face a limited range of choices.
One of the most significant advantages of this business is its reasonable hourly rate, which is below market value. Not only does this make it an affordable option for customers, but also increases the competitive edge and profitability.
The shop boasts a large inventory of parts, which is a significant strength. Without these parts readily available, quick turnarounds for repairs wouldn’t be possible. The current business entity is a C-Corp, providing a solid foundation for future growth and success.
The gated parking lot provides ample parking for up to 18 vehicles inside, and 20 outside, making it easy for customers to drop off and pick up their cars with ease.
Don’t miss out on the chance to own and operate a trusted and reliable auto repair shop. With the seller’s training, a large inventory of parts, and an established reputation, it’s a true opportunity not to be missed.
Value Proposition
- 38 years of established reputation
- Exceptional customer reviews of 4.7 stars
- < 15% Profit margin, $202,000 adjusted earnings 2022
- Price includes inventory valued at $70,000
- Hourly rate currently charged 20% below market rates
- 2022 sales recovered better than 2019 sales
- Experienced team of technicians and writer
- Market projection sees increased demand as customers keep their cars longer
- Located with other repair shops making synergy
Revenue Breakdown
Financial Highlights
- Listing Price: $375,000 including Inventory
- 2022 Cashflow (SDE): $202,840
- 2022 Average repairs per week 20 to 25
- 2022 Average R/O $933
- Parts cost listed in Operating Expenses
- 2022 Parts Expense was $619,246
- Inventory value estimated at $70,000
- Recommended working capital $50,000
- All equipment necessary to operate included in the sale
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 2.26x, including inventory valued at over $70,000.
Funding Example
Purchase Price: $375,000
10% Buyer Down Payment
$41,350
Buyer’s Equity
90% Bank Loan
$342,500
10-Yearterm at a rate of 11.5% Fixed = Monthly loan payment of $4,815 including estimated closing costs
- Cash Flow (SDE in 2022): $202,840
- Annual Payment to Bank: $57,780
- Net Profit (After Expenses and loan payment): $144,060
- SBA made their calculations and pre-approval based on 3-year average ($165,573) which is lower than 2022 SDE of $202,840
* 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.