*Special Note: In a victory for small business buyers, the recent $900BB stimulus bill directs the SBA to pay the first 6 months of new SBA 7(a) loans approved between February 1 and September 30, 2021 (up to $9,000/month). Our advice: Don’t wait. Find a quality business and get moving quickly. Banks will be busy this year and buyers that wait until July/August will likely lose out.
This well-established and profitable company designs, installs, and delivers residential home cabinets and countertops for builders and homeowners. They also provide remodeling and plumbing services through subcontracting agreements. The Company serves builders in both new construction and remodeling, as well as selling directly to homeowners. The Company offers premium custom cabinet solutions and recently rolled out two entry-level cabinet lines (one import and one manufactured domestically) that they expect could add approximately $1 million in sales in 2021.
The Company designs mostly kitchens, baths, laundries, bars, and provide cabinets based on design. The Company also offers countertops: laminate, quartz, granite, and wood. They frequently sell cabinets and countertops as a combination, but a significant portion of the countertop business is countertop-only. The Company is intentional about its provided product lines and suppliers, keeping quality as the utmost priority.
The Company features a showroom with over 25 inspiring kitchen displays and 6 major cabinetry lines. Customers can come in and experience the showroom’s warm and hospitable environment while they collaborate with skilled designers towards building their dream kitchen. The Company also has a warehouse that has not yet met its capacity, leaving plenty of room for increased product line offerings. The two facilities are leased from an unrelated third-party.
While there was a decline in operations and product demand at the beginning of the COVID-19 pandemic, the Company is already recovering quickly. There is much reason to expect demand to continue rising.
The Owner is in his 60s and is selling to transition into retirement. He loves the Business but feels he will best serve the Company by stepping aside and transitioning it to a new owner with more energy. He is happy to assist in a reasonable transition period.
Buyers will be required to have a minimum of $100,000, solid credit, and preferably industry experience to qualify for SBA 7a financing.
TTM Nov. 30, 2020 EBITDA: $317,007
Nov. 30, 2020 Inventory: $367,103
Real Estate: Leased from an unrelated third party.
Total Building Size: 6,000 square foot showroom (2,500 square foot display space and 3,500 square feet of offices/bathrooms/breakroom/conference rooms/storage); 30,000 square foot warehouse (including 1,500 square feet of office space)
Seller Financing Available: Yes
Seller Note: Limited Seller-Financing Available for Qualified Buyers
Number of Employees: 29 (16 salaried, 11 hourly, and two 1099s)
Year Established: 2000
Facilities: The Company leases two facilities. One is a 6,000 square foot showroom, and the other is a 30,000 square foot warehouse.
Support/Training: Ownership is willing to provide reasonable and customary transition assistance.
Reasons for Selling: Transition into retirement.
(1) Multi-Step Design and Installation Process: The Company follows a multi-step process to fulfill each customer’s needs. The Company’s professionals first seek to understand the customer and their lifestyle and then determine what design and selection will work best for their space. The Company slows down the process to a comfortable pace to make designing each kitchen and home space a pleasurable experience. They account for the customer’s budget and other needs and assist the customer through design, delivery, and installation. Additionally, the Company follows up with the customer after the project is complete to ensure the customer’s kitchen or home space is everything they wanted.
(2) Longstanding Customer and Supplier Relationships: The Company forges longstanding relationships with its suppliers. Their loyalty extends beyond these relationships and into the Michigan community, as the Company keeps much of its primary business local. While the Company is loyal to its suppliers, it is even more loyal to its customers and the commitment to quality. They have been known to switch suppliers when suppliers’ products have consistently diminished in quality.
(3) Passionate Company Culture: The Company’s passionate family culture has set it apart from other industry companies. Opening their doors as a family-owned business, their main focus from the start has been service-based.
(4) Diverse, Motivated, and Young Team: The key ingredient to the Company’s success is its team of 29 excellent team members who strive daily to uphold the Company’s values. Each team member has a unique skill set they bring to the table.
(1) Exploit New Cabinet Lines: The Company is currently working to bring in two economy-lines of cabinetry to accommodate a broader range of customers’ needs and budgets. This new entry-level grade cabinetry program will begin in January 2021 and will potentially add $1 million to the Company’s top-line.
(2) Remodeling Division: While the Company works with many builders and contractors, they also offer remodeling through subcontracting agreements. Ownership has considered making a remodeling division into its own separate entity to remove any conflict of interest with their building partners and grow the Company’s remodeling business to increase profitability.
(3) Excess Warehouse Capacity: The Company currently only uses 60% of its warehouse space. Some of this excess space will be used when the Company brings in its new economy-line, but there will still be plenty of excess space. The Company could bring in other product lines and market larger or bulk orders for new construction, thereby utilizing both the extra warehouse space and increasing revenue.
(4) Additional Showroom Location: The Company boasts a complete kitchen and bath showroom with 8 skilled designers where customers can come in and get a detailed design with quality products priced competitively. The addition of a second showroom could allow the Company to reach an entirely new market and spread the Company’s brand.
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