Profitable Septic Service and Related Services Company
Dominant and Profitable; Check it Out!
included in asking price
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What is it that a buyer most wants in an established business?
Here are some of the main factors that buyers look for, and this business has them all:
• Longevity, with a track record spanning decades.
• Excellent profit margins, a proven cash flow producer.
• Great reputation, constant flow of new customers.
• Strong Seller transition support.
• Dominant market position, with a broad array of septic and plumbing services
When you find a business that has these features, it follows that it will impress a lender as well. I’m pleased to report that it already has. We have an SBA lender’s proposal with a 76% loan-to value ratio.
That means a qualified buyer can acquire this stellar opportunity with a down payment of only 24%. Then the business cash flow makes the payments for you, and you end up owning it free and clear.
Often, a business operates in leased premises. There’s nothing wrong with that, but it means the business is buying the real estate for someone else via the lease payments.
Wouldn’t it be better if the business bought the real estate for you? That’s possible in this case, and lenders are much more accommodating when real estate is involved.
That is, 25-year financing and the low monthly payments that go along with it. Plus, you not only end up owning the business free and clear, but the real estate as well! That’s how the lender proposal is framed.
In this case, there are two properties. The commercial headquarters, and also a dual-purpose DEQ-licensed land-application site. This property provides not only the necessary location to complete the septic services cycle, but also a classic Oregon ranch with all the rare amenities one would expect in the way of scenic beauty and wildlife. Not to mention, a well-thought-out tax strategy.
What about the price?
How was it calculated? Buyers want to know—was it calculated based on objective criteria?
A proper price calculation is pretty straightforward; it’s based on cash flow and risk analysis. In this business, cash flow is strong and risk factors are low. The business is priced around a historical rate of return of more than 20% per year (even higher if the buyer uses loan leverage.) Try to get that down at your local bank!
Another area of buyer concern is “Is this a business or just someone’s occupation?”
When you buy a business, you want your money to earn money; you don’t want to pay for a job. In those cases where an owner works in the business, there must be a replacement allowance (either in the form of wages or salary, or via an adjustment in the valuation.) Not all alleged business opportunities are priced in this way. But this one is.
Buyers want to know if the business can be expanded, and how that would be done.
Often, an owner/seller has spent years building the business up to a certain point, and just decided to stop growing it. Nothing wrong with that, and it happens frequently as the owner nears retirement.
But where does it go from there? The buyer will certainly want to know how that might work, and what it would take to do it.
Interestingly, this company is already providing related plumbing services, and that contributes to its competitive advantage vs. the small single-service competitors. But it is referring them out to qualified companies rather than expand into that area directly.
In fact, it is keeping two plumbing companies busy with this work; work that it could be doing at a profit! For a plumbing company this is a strategic acquisition waiting to happen. For other buyers, it is a natural growth and expansion track.
So, there you have it—the “executive summary.”
If you would like to see how very real this company is, and determine whether it would be a good fit, please request more information on the adjacent form. You will get an NDA for your r
About the Business
Contact the Seller
- Year Established:
- Number of Employees:
- Real Estate:
The business operates out of a 2400 SF shop owned by the business owner. In addition, there is an operating process connected to another property that is owned by the business owner. The buyer will have flexibility. They can lease, buy, or move.
Yes, there is some normal competition, because the market demand is legitimate. However, this company is head and shoulders above the local competition, and this is well-known.
Growth & Expansion:
The company is primarily a septic service company. However, there is always related plumbing work involved. The owner has purposely referred this work out (to 2 plumbing companies) because he didn't want to expand that much. But all it would take is hiring plumbers and performing the work that is requested virtually every day.
About the Sale
- Reason For Selling:
Retirement after 20 years plus
The owner will provide on-site, hands-on support for the first month, and telephone / e-mail support for 3 months, all at no charge. After that, additional support under contract if the buyer wishes.
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