19 y/o Architecture & Interior Design Practice

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Enter the Elite NYC Architecture Market
Asking Price:

Gross Revenue:
Cash Flow:
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included in asking price

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Business Description

**Architecture license NOT required. Ask about how the business would need to be restructured for a buyer without an architecture license.

**Pre-qualified for Small Business Administration loan with possibility of 10% down payment.

OVERVIEW - The firm represents a unique opportunity to merge with or acquire an established architectural practice in the heart of New York City. The firm's portfolio includes residential, commercial, and retail, with a focus on residential projects. Founded in 2000, the Company achieved total revenue of $1,783,452 in 2018, with owner’s discretionary earnings of $488,373 for the year.

TRACK RECORD OF SUCCESS - The firm had a 16% cumulative annual growth rate (CAGR) in gross revenue from 2010 through 2018. The Company’s designs have featured in publications such as Architectural Digest, Bathroom Trends, Kitchen Trends and New York Magazine. Since 2000, the Company has completed over 450 projects.

POSSIBLE $7.5M FEE 5-YEAR PROJECT - The firm recently received a LOI for a partially state-funded project with a budget of $900 million. The project is expected to generate revenues in excess of $7.5 million for the firm. The project was recently opened up to a request for proposal (RFP).

LOW MARKETING COSTS - The firm has achieved its growth with relatively low marketing costs. There would seem to be significant potential to increase the profile, and thus growth, of the Company through increasing the marketing spend. In the last year, its marketing spend was $9,000, representing 0.5% of gross revenue. For most small US firms, marketing expenditure as a component of gross revenue is approximately 4%.

CLIENT SOURCES - Approximately 37% of the Company’s clients are repeat clients, while 48% are referrals, indicating reliable sources of revenue

SYNERGIES - There are a number of potential synergies that could emerge from acquiring the firm: Access to a new geographical market, relative stability of revenues when compared to other locations in the US, exposure to clients in a higher income bracket as well as benefits of scale and scope.

STRONG TEAM - The founder is committed to a smooth transition of of the business to the buyer and is willing to work with the acquirer for 30 hours per week for at least 3-4 years to facilitate this. He established the business in 2000 and has put together a strong team of architects, technicians and interior designers. The company currently has 14 employees in total, excluding the founder.

DIVERSE DESIGN PORTFOLIO - The firm has completed over 450 projects since 2000. The annual quantity of projects has grown by approximately 40% in the past five years. In terms of revenue, most of its projects are residential.

DEAL STRUCTURE - Seller is open to retaining up to 49% ownership in his business. For a full-company acquisition, in addition to the $1.05m listed asking price, the seller will require an earn-out (based on a percentage of revenue) for about 4 years.

The firm is free of debt.

In addition to the above Asking Price, which can be paid partly with a seller note, a four-year earnout based on revenue growth will be required. For example, 10% of revenue exceeding $1.5m each year.

About the Business

Manhattan, New York
Year Established:
Number of Employees:
Real Estate:
Building Sq. Ft.:
$10,829.00 Per Month
Lease Expiration:
The firm has two leases for two separate floors. Both leases are five-year leases with a six-month termination clause. The lease for the 1st floor architecture department space runs through May 31, 2022. The lease for the 2nd floor interior design space runs through February 13, 2022.

All of the furniture, hardware, software licenses, and other equipment used in the operation of the business will be included.
Market Outlook/
The firm has carved somewhat of a niche for itself in its particular neighborhood, earning itself some local name recognition. This recognition is partially due to the firm's street-level visibility.
Growth & Expansion:
Being part of a larger firm will allow the seller's firm to win larger projects. Also, additional marketing investment will allow the firm to expand its residential practice.
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About the Sale

Reason For Selling:
Owner wants to reduce his hours to 30/wk to focus on real estate investing.
The owner is willing to continue working with the firm for up to 4 years.
Seller Financing:
Pre-qualified for an SBA loan with possibility of 10% down payment

Listing Info

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  Confidentiality Agreement (32 KB)

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Business Listed by
Ashish Bhatt

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